Turnbull recommits to NBN cost-benefit analysis

Turnbull recommits to NBN cost-benefit analysis

Summary: Communications Minister Malcolm Turnbull has rejected the suggestion of his former foe Stephen Conroy that the Coalition has abandoned plans for a cost-benefit analysis into the National Broadband Network.


Claims from former Communications Minister Stephen Conroy that the Coalition has abandoned plans to do a cost-benefit analysis into the economic and social costs and benefits of the National Broadband Network (NBN) are false, according to Communications Minister Malcolm Turnbull.

On Friday, in his first speech since stepping down as communications minister in June, Conroy said that the attacks Turnbull made against the former government for not doing a cost-benefit analysis were "complete bull****" because the Coalition had abandoned plans for the Productivity Commission to do a cost-benefit analysis.

The commission is seen to have close ties to the Department of Communications, then called the Department of Broadband, Communications and the Digital Economy (DBCDE), because its new chair is the former head of DBCDE Peter Harris.

In a blog post this afternoon, Turnbull indicated that the review would still go ahead, but would now be undertaken by a "review panel", members of which will be announced shortly.

As was outlined in the Coalition's National Broadband Network (NBN) policy, the panel will be tasked to analyse the social costs and direct and indirect benefits of the availability of broadband delivered via various technologies. The panel will have six months to report back to the government the value of increased broadband speeds, and how much this should be supported by government, the ownership situation for NBN Co, and the pricing, capital investment, competition, and product environment for the NBN.

It comes as Conroy was today appointed deputy Labor leader in the Senate under Senate Labor leader Penny Wong. New Labor leader Bill Shorten is expected to announce his new shadow ministry on Friday. Hopefuls for the Communications portfolio Kate Lundy and Ed Husic were left out of the running when the full list of the Shadow Cabinet was released on Monday.

At a press conference in Canberra today, Conroy criticised the government for not holding Senate Estimates hearings in 2013, stating that the government is "running and hiding already" from scrutiny over its handling of operations such as the NBN. He specifically called out reports that new NBN Co executive chairman Ziggy Switkowski has met with regulatory economist and long-time NBN critic Henry Ergas.

NBN Co is currently undertaking a 60-day review of the management of the project and the company, and is due to report back to government in early December.

Topic: NBN


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • Everyone should focus on upload speeds

    Any technology should be judged on its upload speed and its ability to be upgraded in future.

    Upload speed doesn't matter to home users doing basic web surfing, but upload speed is critical for business use. Yet some of these politicians seem to want to brush the upload speed under the carpet.

    They would be better to do nothing, rather than install a Fiber-to-the-Node system that relies on tarnished twisted copper pairs. The reason is that they would have to pay again to upgrade it or replace that copper in the not-too-distant future. There is just no point to it.

    Either go 100% glass fiber to the home, or do nothing at all. The half-way fiber-to-the-node is just not worth doing, and will only serve to delay future Fiber-to-the-home.

    Make sure FttN is not installed anywhere near your home, for this reason.
    • Well said

      What I like about the FttH model is that it resets everything. Every time there is a new technology, there is a legacy issue with whats still there. People still use dialup for example, so that technology needs to be maintained until they are no longer using it. As a result, there are unnecessary maintenence costs that just waste billions a year.

      Reset the playing field to FttH, and you remove the need to maintain all of that, provide the same tier of technology to 93% of the population, and can get to work on that remaining 7%. FttN does nothing to achieve that, only delaying the chance to do such a cleanup for decades.

      You put FttN in now, it only becomes the equivalent of dialup, and will need to be maintained for a smaller and smaller minority in the future. That includes needing to maintain and repair the nodes that are part of the technology.

      Going 100% fiber is the most practical solution at a hardware level, the most practical solution at an economic level, and the most practical solution at a retail level. Yet people still want the short term option and refuse to see that it costs everyone in the long run. They dont want to wait 2 extra years for the option that will serve us for 50 or more.

      Would FttN work? Definitely, and its a clear step forwards from where we are today. But when there is a clearly superior option available, and the effective cost to the government is the same, why is it being considered?
  • They need to take into account

    the fact that if they go with copper, they're just going to need to upgrade to fiber in 10 years anyway, so by 10 years from now just putting in fiber from the start will be far cheaper.
    • Not so cheap

      The cost of fibre and hardware is already very cheap compared to the cost of labour - waiting 10 years is not going to make things any cheaper, and is more likely to be more expensive even accounting for inflation due to the limited supply of technicians entering the profession.
    • Consider this

      I know you havent made this claim, but its one of the many things the anti-Labor group throw out as a justification.

      Consider that when Labor first floated the idea of a NBN, it was planned to cost around $4.7b for a FttN rollout at the time - it was labelled by the Liberals as Fraudband, hence the term being thrown back at them today. The negative thrown around with this is that the plan changed to be some 10 times more expensive.

      But that $4.7b plan isnt all that different to what the Liberals have proposed, yet its costing nearly $30b now. So whats changed to increase the cost 628% in just 6 years?

      If the cost was getting cheaper, that $4.7b number should be lower. Shouldnt it?
  • I expect

    I expect that Peter Costello will have something to do with the panel, he always gives the answers they want to hear...
  • Costello

    He also recommends what suits the interests of his clients—privatisation!
  • Will the NBN be abandonded

    Should we assume that since Ziggy has turned to Ergas for his advice on the NBN cost review and that Ergas is already on record as saying that his own CBA says that the NBN should not be built if it costs more than $17 billion, well under the coalition's estimate of the cost even for FTTN, that the plan now is to abandon the idea entirely, wind up NBNco and flog off it's assets in a firesale?
  • Ah the Guru will advise Ziggy.

    The man that warned us all of the impending GFC to allow us the opportunity to restructure our investments, businesses's and financial affairs - that's right he was that smart he had no idea and yet can do a valid CBA.
    However Peter Costello did warn us, even as he and Howard started a scheme were the Government matched Super Extra Contributions up to $1Mill, handy injection into the sharemarket as those in the Know sold their Vulnerable Holdings and rearranged their affairs without spooking the horses due to the Super investment keeping the market bouyant
    Abel Adamski