FttP or FttN, the NBN is already slipping from Turnbull's grasp

FttP or FttN, the NBN is already slipping from Turnbull's grasp

Summary: As if a slowdown in the NBN rollout weren't problem enough, Communications Minister Malcolm Turnbull's NBN Co has been hit by lawsuits, subcontractor chest beating, and protracted timeframes for its Telstra renegotiations. Has he already lost his grip on the NBN?

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Surely, despite all of its rhetoric and vitriol over the years, this is not how the Coalition wanted the National Broadband Network (NBN) to become.

Two months into Malcolm Turnbull's watch as communications minister, the NBN — which he promised to deliver "sooner, cheaper, and more affordably" — is in truth slowing down dramatically.

According to NBN Co's latest rollout figures, some 6,685 premises were connected in October, compared with 39,115 in September, 33,185 in August, and 18,072 in July. Just 3,082 additional connections were installed in the last week of October; compare this to 8,957 connections installed in the week ending July 14, when the rollout was (by comparison) humming along.

Cliffhanger
Is Turnbull already losing his grip on the NBN?
(Image: Screenshot by David Braue/ZDNet)

At the current rollout rate, NBN Co will have connected less than 500,000 new properties by the 2016 deadline, when Turnbull has promised to complete the first stage of his NBN.

And that's assuming things don't slow down further. But they may: Contractors would all be watching closely as Visionstream — which recently denied claims that it had stopped work in Tasmaniademands more money to finish the job it was contracted for and Turnbull insists the company's contracts will only be honoured if it holds up its side of the deal.

Meanwhile, NBN Co has been sued by Telstra for a significant sum over the calculation of instalment payments (payments, by the way, for something that's not actually happening as was expected). Then there's the renegotiation of the deal with Telstra, for which the government has advertised for someone to help it renegotiate its deal with Telstra — and listed a rather optimistic timeframe for delivery of June 30, 2014.

And that's just for the negotiations, mind you: Implementation of any changes would take months after that, potentially requiring confirmation by Telstra shareholders at the company's AGM next October. That would push the commencement of Turnbull's alternative NBN policy to the beginning of 2015 at the earliest — at which point he will have less than two years to roll out the new topography to millions of homes across the whole of Australia.

The government has advertised for someone to help it renegotiate its deal with Telstra — and listed a rather optimistic timeframe for delivery of June 30, 2014... That would push the commencement of Turnbull's alternative NBN policy to the beginning of 2015 at the earliest, at which point he will have less than two years to roll out the new topography to millions of homes across the whole of Australia.

It's an impossibly tight timeframe, made even more problematic by the fact that the NBN under Turnbull's watch is so far going nowhere, and fast. This sort of hiccup might be expected during such a major transition — except for the fact that one of Turnbull's first moves as communications minister was to order that existing FttP rollouts were to continue as usual.

That proclamation would have been an effort to prove that he was not going to "demolish" the NBN — as Tony Abbott so famously tasked him to do three years ago — but that he was going to conserve its momentum in an outward show of progress while he figured out what, exactly, he is going to do to the rollout.

The industry, however, has been covering its own backside and, judging by the precipitous drop in rollout figures, seems to have become disinterested in continuing the rollout apace.

Visionstream's intransigence reflects a groundswell of private-sector self-interest that is likely to spill over as the new government is hit with union negotiations, work stoppages, contract renegotiations, and other obstacles as the industry attempts to reset the terms of its NBN engagements.

Interestingly, NBN Co says the network rollout has stalled because of the asbestos-in-pits issue, and not anything Turnbull has done. Yet here, again, is a side effect of Telstra's fundamental apathy towards the NBN: If it were truly interested in helping the rollout proceed, it would have dealt with the asbestos issue a long, long time ago. Telstra has a financial interest in dragging out the NBN deployment as long as possible — so how can Turnbull believe it will do otherwise?

After years of professing his faith in the private sector's ability to improve broadband, Turnbull is already coming face to face with the challenges his predecessor faced every day: A fierce and difficult Telstra that has defied Turnbull by suddenly deciding that its ageing and decrepit copper has value after all; a private sector largely unprepared to contribute the kind of capital needed to compete with the incumbent; and a discordant construction sector that has shown that it truly does not care whether the NBN lives or dies.

Many took it as a noteworthy mea culpa when Stephen Conroy recently admitted that he had overestimated the industry's ability to execute on his NBN design. What Turnbull is now, painfully, learning is that the problem was not necessarily all about Labor's vision — but rather the inability of the telecoms and construction sectors to help realise it.

Those issues have outlasted the Labor government. And while Turnbull may have surrounded himself with ex-Telstra cronies with whom he feels an ideological sameness, successful execution of a project like this takes a lot more than committee meetings and mutual pats on the back.

Turnbull needs to grasp the nettle and figure out a way to at least keep the existing rollout moving at its current speed, or his capability as a guide for the telecoms industry will be rightly questioned — and his ability to actually deliver any kind of NBN, FttP or FttN, in real jeopardy.

Without even grudging support for the status quo from Turnbull, the project will simply collapse under its own weight; in such an eventuality, he would surely struggle to restart the rollout on the backs of a disaffected construction sector and a reluctant Telstra that was never supposed to be relied upon to such a degree to complete either model of NBN.

Turnbull needs to grasp the nettle and figure out a way to at least keep the existing rollout moving at its current speed, or his capability as a guide for the telecoms industry will be rightly questioned — and his ability to actually deliver any kind of NBN, FttP or FttN, in real jeopardy.

Like a duck swimming on the water, there is likely more going on under the surface of Turnbull's quiet determination. But his only real deliverables so far are the cleansing of old rollout plans and the publication of weekly updates on the rollout's progress — much-vaunted transparency that provides unprecedented ammunition with which to track his progress in meeting what are extremely ambitious rollout targets.

Indeed, with every new pronouncement, those rollout targets seem ever more elusive. Barring a miracle, Turnbull will next week likely blow past the very first deadline he so emphatically set for himself — the 60-day review of the NBN's operations, which before the election he had promised would be completed by November 11 (although to be fair, I gave him until November 17, counting from the day the government took office).

Missing his own deadlines — including Tony Abbott's promise of an updated NBN Co business play by December 27 — will do little to reinforce the authority of the new government as one that gets the job done.

Turnbull's very authority as communications minister is being put to the test here, and he will need to be unafraid to put his foot down — whether by pursuing go-slow contractors for breaches of contract, or by more aggressively pursuing a contract renegotiation with Telstra. If anaemic industry engagement means he simply cannot muster the might to keep the industry to his own timelines, Turnbull may find the entire NBN effort is slowly slipping away from him.

What do you think? Is Turnbull delivering on his promises? Does he have a larger plan? And does he have the political and market will to help the NBN regain its momentum?

Topics: NBN, Broadband, Government AU, Telcos, Telstra

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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Talkback

17 comments
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  • Easily fixed.

    On Oct 30 2013 ".... the Hon Malcolm Turnbull MP, made a formal determination to designate 29 networks, operated by OptiComm Co Pty Ltd and Pivit Pty Ltd, as Adequately Served."
    http://www.communications.gov.au/broadband/national_broadband_network/adequately_served

    That's local 29 networks. Let's wait and see if these new areas are included as 'progress' for the Liberal's broadband policy. (Except the process was initiated by the previous govt in Sept 2012.)

    The temptation must be killing him. ;-)
    Tailgator
  • Dead, buried Cremated

    Abbott's first instruction was to bury the NBN.
    Seems that has always been the intent.
    Goresh
  • Plan for the future, stall.

    The real problem with the NBN has and will always be the Contractors and Telstra itself. Do we see any sign of Turnbull trying to force Telstra to knuckle down and get to work ? What about working with the contractors to get them to work more efficiently and pay their workers properly ? Nope to both, The Liberal ethos of leave everything to private enterprise prevents them from even seeing the problem, much less tackling it.

    So indecisive, the best way to kill any project is to throw all the plans out and start again with you've done 10% of it. Replacing the entire board is suicide, especially when refusing to even sit down with the previous board to find out what the real problems are.

    You'd think the Liberals would be capable of at least keeping the slow FTTH roll out going, nope. Absolutely pathetic, Turnbull is is on a one way trip to retirement after this, you can't blow billions on a deeply flawed plan and not end up being forced to resign from politics
    haseo20
  • Plan is to kill NBN and give the remains to Telstra

    Conservative parties in this world have always been employer and private sector centric. A government owned NBN goes against that. So what do you expect from our Libs?

    Thanks to public resistance - 250'000 signatures on NBN petition http://goo.gl/w528yD - Turnbull cannot just stop the NBN quietly. Otherwise he will get the blame.

    So Turnbull is now setting up Labour to take the blame for this failure, by indicating them as the core reason with badly negotiated contracts, that give room for re-negotiation.

    What next? Is Telstra going to ask NBN Co to pay for Asbestos and deteriorated pits and ducts remediation?

    My prediction is, that Turnbull/Abbott/Libs will make it so difficult to continue with the NBN in any form, that it will naturally die. The remains will go to Telstra and the subject will be dead forever.

    That would be a great shame. The single biggest infrastructure project, which all of Australia would get a great benefit from for a life span of 50+ years.

    Even if the build would cost all-up $100B that would only be $2B per year of life and the NBN will actually earn money and the NBN plan also sees NBN to pay back the build cost over the years with 7% of ROI.

    So in reality all we need is somebody, who is will to lend the money. And "we the people" are the only ones, who have that sort of money. Fair enough too. We are going to get the benefit.

    Leaving this investment to the private sector will get us no further than the feeble attempts made by Telstra and Optus in the decades pre-NBN. This has left Australia - an innovative and progressive country - behind the rest of the world and worse behind our neighbours in Asia.

    I won't even get into the merits of FttP vs FttN. Just the one thing. FttN will cost more in the long run and give us (the people) much less. I say:

    Do it once and do right. Even if it takes longer to do.
    beau parisi
  • NBN for Sale?

    Bottom line, the liberal gov likes selling infrastructure, not building it. So how long will it take? What shape will it be in? Do they even care if it works or not, or what effect the lack of a decent broadband infrastructure causes? Does any care?
    tonye56
    • Selling Infrastruture

      Isn't selling property without the permission of the owner an offence called theft by conversion, if I sold a piece of equipment from my workplace because it did not get a lot of use and used the proceeds to fund my own projects I would be very swiftly shafted and very lucky not to be charged with stealing from my employer, why should what Liberals do be regarded as anything different or legitimate.
      BoomerMMW
  • Playing exactly to form

    I entirely agree with Beau Parisi (above). It is just not in the DNA of right wing, conservative, political parties to encourage State owned monopolies. For example, it is likely we will soon see the sale of both Australia Post and Medibank Private. In the case of the NBN, the situation, as seen by a conservative government, is even worse. They deduce it as reinstating the very communications monopoly that they so pathetically attempted to destroy some years ago (and hopelessly failed - but that's another story!). I have long since considered that this is playing exactly to form. Despite all the rhetoric, the end-game is to allow the NBN as a GBE to slowly and painfully die through inaction. Oh yes, things will appear to be achieved. Gabfests. Jobs for the boys. A few token connections. But underlying all this faux activity, the real issue - the building of a communications network for the 21st century - will die the death of a thousand cuts. Ultimately, the skeleton of what could have been will be sold in a fire-sale to the highest bidder - who, we can be assured will be Telstra. Back handers and corrupt politicians, who own shares in Telstra in their wives' names, will make sure of that. The LNP can wash its hands of the whole sorry mess, all the time blaming the opposition for every possible (and many impossible) failure, and totally refusing to take any of the blame.

    And as a country, we will be royally stuffed.......
    Mikeinnc-d63ee
  • What's new Malcolm

    SierraMan
  • Kickstart it.

    Let's put the NBN up on Kickstarter.

    *cough*
    colonel.mattyman
  • The LNP's NBN Version

    All is revealed by this Pic!

    http://www.mediafire.com/?aj3j65j7l7tl6lr
    grump-a1eeb
  • NBN the final solution!

    If Abbott and Turnbull don't keep their NBN promises hang em from telegraph poles.
    Then make sure the next government understands what they have to do!
    Kevin Cobley
    • Hanging

      A very good point just make sure the piano wire use to hang them is made from copper.
      BoomerMMW
    • Hang em High

      "If Abbott and Turnbull don't keep their NBN promises hang em from telegraph poles."

      Not a good idea. We will be getting our data delivered via those telegraph poles by then, most likely via a manual operator flicking a key to make the ones and zeros.
      Goresh
  • KHARMA

    Australia was foolish enough to blindly believe the Murdoch propaganda and misinformation campaign and the LNP campaign of deceit and the right wing Media pathetics.
    Rural Oz screwed over again, in fact Oz screwed over again.
    I will fight to keep the LNP in power for the next decade and watch them reprise the Fraser Howard brilliance.
    When the angry lynch mobs look for someone to blame we will have the articles and commentaries to educate them
    Abel Adamski
    • WTF Abel

      A bit of a contradiction there old boy!
      BoomerMMW
      • Not Really

        Did you not note Alby making overtures to News Ltd and subsequently being praised and promoted by News Ltd whilst Shorten was being denigrated prior to the election of the Lab Leader.
        What has happened before in Oz is that when the storm clouds are on the horizon, media (read News Ltd and right wing conservative) turn on Coalition and promote Labor who then cop the Economic Storm and have to take drastic action. Howard Fraser the Oil Cartel raising prices that dramatically was completely unexpected and they trashed the economy and nearly trashed the nation, fortunately for them Hawke started sorting out to be then hit with the world wide credit crunch which lasted to 1994 , as a very big Govt debt was run up to keep us going whilst restructuring and repairing Fraser/Howards damage.
        Fraser inherited a surplus from Whitlam and left a $8Bill deficit to Hawke

        So successfully divert attention from Conservative inability to handle real difficulties by blaming Labor wastefulness, the debt truck etc.

        Difficulties Murdoch, Abbot and Co won't be able to handle will be upon us within 5 years, News Ltd and the Right wing media will try to have us vote out the conservatives to protect the illusion of better managers. Don't fall for it, nothing positive or good will come of it, leave the Prince of liars and the Great Deceiver running the show and be accountable
        Abel Adamski
  • Not holding my breath

    Having been employed in the IT sector for 40 years I was looking forward to sampling the new hi-speed technology that is the NBN, in my retirement years. Not any more I'm afraid, I am content to enjoy the rest of my days using the current antiquated technology. NBN has, for me, become a pipedream which, with all the current shenanigans, I may never live to enjoy.
    tyronekay