History won't judge Turnbull's governance-free NBN kindly

History won't judge Turnbull's governance-free NBN kindly

Summary: The cost-benefit analysis is incomplete, Ziggy Switkowski has gone rogue and there's still no clarity around how or even if the government will access Telstra's copper – yet Malcolm Turnbull happily marked NBN Co's fifth birthday with a new Statement of Expectations putting the NBN on a road to nowhere. How will future Australia judge this day?

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Some day, a decade or more from now, some future government – hopefully one with more insight than the current one – will be agitating for plans to upgrade Australia’s broadband infrastructure to the fibre to the premises (FTTP) network it will require through the rest of the 21st century.

Begging for another $30 to $40 billion to be carved out of the budget to upgrade the aging infrastructure that the one-term Abbott administration systematically hobbled in opposition and then short-changed in government, some aspiring prime minister will lament the short-sighted policy put in place back in 2014, arguing that better communications will be essential to helping Australia catch up with our Asian neighbours.

NBN-SoE-Ziggy
Dear Ziggy: They may be besties but Turnbull and Switkowski will be judged harshly in the future if they can't make their still-uncertain MTM model work.

Instead of trying to improve and complete the FTTP rollout as quickly as possible, they will argue, the Coalition ignored its own demands for due process and pursued an ideologically driven network rollout based on the flimsiest of evidence and an utter disregard for the future of the country's information industries.

Arguments will ensue, finger-pointing will be rife, and Telstra's board will watch it all from the comfort of a boardroom where the chairs have been replaced by large stacks of money.

It cannot have escaped Malcolm Turnbull that today, the day he irrevocably redirected the NBN effort towards a future as precarious as it is ill-conceived, is the fifth anniversary of the founding of NBN Co (announced on 6 April 2009 and incorporated on the 9th) and the ambitious if challenged network rollout – which has only recently begun showing signs of the vitality it always promised – it begat.

Although Turnbull will argue that he has couched the NBN in reality at last, that reality is shaky at best and completely unpredictable at worst. He has delegated the NBN's future to what his Statement of Expectations (SoE) refers to as 'fibre to the x' technologies, arguing correctly that NBN Co should prioritise areas of poor service but offering no accounting for the stew of poorly-integrated technologies that his multi technology mix (MTM) architecture will deliver.

Optimists might point out that the 'FTTx' nomenclature leaves the door open for a greater investment in FTTP, giving Turnbull a Plan B should anything fail to match his florid fantasies. Yet both the NBN Strategic Review and Turnbull have argued vociferously that Australia’s broadband lies not in FTTP – which they see as some sort of futuristic anomaly available only to those lucky early adopters or people building new homes – but in fibre to the node (FTTN).

As Turnbull knows but does not readily admit in public, his ability to deliver any of his new NBN policy depends entirely on the largesse of Telstra, which is certain to take its sweet time in allowing the government to rewrite any part of the $11b deal it secured years ago.

Turnbull has been arguing that those renegotiations should be complete by June, but as recently as last night his 2IC, NBN Co chairman Ziggy Switkowski, has confessed that Turnbull's assessment is wrong; conservative estimates suggest Telstra could drag this process out through the end of the year, and Switkowski isn't arguing otherwise.

Despite years of calling for a cost benefit analysis (CBA) to inform decision-making around the NBN, Turnbull has now based his new NBN policy on the conclusions of a biased and questionable NBN Strategic Review that was designed from the outset to affirm everything Turnbull had already decided. The Senate Select Committee recently detailed the sins of that review, but Turnbull doesn't care a whit what the Senate says and continues to refuse to engage critics in meaningful discussions about its content or myriad errors. 

Governance bites

The biggest slap in the face around the new SoE, however, is that it totally disregards the governance processes that Turnbull bayed for during his years in opposition.

Despite years of calling for a cost benefit analysis (CBA) to inform decision-making around the NBN, Turnbull has now based his new NBN policy on the conclusions of a biased and questionable NBN Strategic Review that was designed from the outset (with creative maths and deceptions around HFC) to affirm everything Turnbull had already decided.

The Senate Select Committee recently detailed the sins of that review, but Turnbull doesn't care a whit what the Senate says and continues to refuse to engage critics in meaningful discussions about its content or myriad errors. Rather, he simply dismisses legitimate critique as the work of "zealots" and moves on in his merry way.

Now, with that dodgy review under his arm, Turnbull is now steering the Good Ship NBN towards his MTM model without even waiting for the results of his own CBA – which should (one would hope) provide something resembling an impartial judgment about whether the MTM is actually the best way forward.

A CBA could expose the soft underbelly of Turnbull's MTM, whose genesis is irretrievably linked to Turnbull's utter failure to give even cursory attention to the relative benefits that a full-FTTP infrastructure offers compared with the more-of-the-same MTM.

Given that the Coalition's only concern with just about anything seems to be its costs, and that there is absolutely no discussion in a Turnbull ministry about the relative benefits of the models to be discussed, it's fair to believe the CBA's outcome is already certain.

Turnbull's third mistake is that he still has not waited for the results of his negotiations with Telstra to see if FTTN can even be realistically rolled out at nationwide scale. If Telstra proves stubborn – as it has, over and over, in the past – we can add years and billions to the MTM timetable as well as returning control over Australia's broadband future to the company it tried to free itself from 15 years ago.

Indeed, there has still not been any large-scale trial of FTTN technology to see if it will actually be able to be rolled out across Australia’s suburbs and regional areas with the cost and technological efficiency he seems to believe.

Nobody is saying that FTTN and its underlying VDSL technology do not work; the real question is, how well will it work in Australian conditions? Turnbull has crowed about the results of fibre-to-the-basement (FTTB) trials that correctly identify the benefits of that model over the short-run cable installed in apartment buildings, but that does not automatically translate to the broader FTTN rollout.

If Turnbull can't tell the difference between FTTB and nationwide FTTN, he shouldn't be communications minister – and if he can, he should refrain from using the results of a single FTTB connection to justify his own FTTN folly.

These sorts of issues all speak to the extremely selective governance that the Coalition has wrapped around the NBN effort. Turnbull's decision to release a new SoE without waiting for the same level of probity that he demanded from Labor for three years in opposition, has streamrolled all illusions of due process and made a mockery of his calls for transparency and good governance around the NBN.

Any governance in the future will be entirely on his terms and designed specifically to gloss over the many, many questions that persist around the NBN's new direction. Those that question his strategy will be invited to reapply for their jobs so they can be replaced with less problematic minions.

In advocating for the purchase of Telstra's copper network, Switkowski is also effectively shellacking the former Coalition government, which oversaw the sale of that very network....Switkowski is suggesting that the Howard government was premature and incorrect in selling off that asset; for NBN Co to now be courting Telstra to buy it, hat in hand, is frankly embarrassing.

Surprisingly, Switkowski is now publicly advocating the purchase of Telstra's copper network – going against technical advice, common sense, and business logic.

He's also ignoring NBN Co's own advice, which said the unknown costs of remediation – which could be four to six times higher than those of FTTP – made the purchase of Telstra's network ill-advised. The government will rent Telstra copper services for the eventual FTTN trial, but clearly it is ownership of the copper that is – embarrassingly – now Turnbull's endgame.

In advocating for the purchase of Telstra's copper network, Switkowski is also effectively shellacking the former Coalition government, which oversaw the sale of that very network to a public that was systematically deceived about the true extent of the reform that the government would drive.

In the context of today's telecommunications environment, Switkowski is suggesting that the Howard government was premature and incorrect in selling off that asset; for NBN Co to now be courting Telstra to buy it, hat in hand, is frankly embarrassing.

This new SoE certainly sets a new direction for the NBN but it also, in true Turnbull style, glosses over the many difficult truths of his policy to give the appearance of actually doing something. Until that deal is renegotiated and signed in blood, Turnbull's new NBN infrastructure plan is just a large, fluffy pile of nothing – and sets expectations that NBN Co simply cannot deliver until Turnbull gets around to doing some actual minister-ing.

The effects of Turnbull's declaration today may not be felt for years, when FTTN is widespread and people actually start banging their heads against its technological limits. But in 2024 – when this whole debate starts all over again, and the government of the time begins considering the cost of upgrading the Coalition's folly to what even Turnbull's strategic review admits would have been delivered by 2024 – I hope Turnbull is still ready to argue that he did the right thing on that day back in April 2014.

What do you think? Is Turnbull's Statement of Expectations putting the NBN on the right course at last? Or is it the real beginning of the end for Australia's broadband future?

Topics: NBN, Broadband, IT Policies, Australia, Telstra, Optus, Telcos, Government AU, Fiber, Leadership

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

32 comments
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  • Lost me

    This article would benefit from an experienced editor's input. Less florid complaining and story telling and more succinct argument please. Your readers are interested in the topic but have limited time and don't like to work as hard as that for what should be a simple statement.
    Wombatmobile
    • Worth reading!

      Can't you spare a few minutes to read an impassioned argument? Turnbull has just dealt a crippling blow to the Australian economy to assuage his political paymasters. We should all weep.
      Modeski
      • Summarize please

        What are the main points of the article? Could you summarize please?
        Wombatmobile
        • Great Article

          David,
          You have summed it up perfectly. Partisan politics and nepotism costing Australia money now and into the future. If they spend a bit less now, they can say 'we spent less.' When a real infrastructure project replaces it, they can claim it is expensive and score future political points.
          Malcolm will not like this article and will professionally belittle you.
          Luke Warm
        • pff

          Not enough time to read in immensely important article but time enough to comment twice
          matyboyo
          • pff

            Yes mattboyo that is correct. It doesn't take me long to comment because I know what I want to say and I just say it.

            However, for me to unscramble meaning from the article takes more time and more effort. It wouldn't be that way if zdnet did the work to produce an easily understood article.

            The problem with the article is obvious in David Braue's summary:

            "Ziggy Switkowski has gone rogue" - What does that mean? Nothing unless you already know.

            "Malcolm Turnbull happily marked NBN Co's fifth birthday with a new Statement of Expectations putting the NBN on a road to nowhere. " - What is a "road to nowhere"? The summary could impart more information with less words.

            You may not have the same requirements as me, mattboyo, because you already know what the article is saying. You may enjoy to delight in someone sharing your emotional views about Turnbull's mismanagement of the NBN.

            I, on the other hand, just want to see the facts. Quickly and succinctly. If they were presented up front, I might then be interested to read further and share David Braue's lament. As it is, I wasn't able to glean the facts on the first read through. The emotional content just got in the way.

            I'm not trying to debate you, mattboyo, or David Braue. I'm just trying to offer zdnet some feedback about how to improve the quality of its journalism in this instance.
            Wombatmobile
          • tl;dr

            tl;dr

            Please summarise your post for me WombatMobile. Its too long. We have to work too hard to understand it.

            How you can seriously complain that the article is poorly written is beyond me.
            CommonSense-e9dea
          • Perhaps He Needs a 3 Word Slogan ?

            Please don't be too harsh on the wombat as many, including our PM have have a very short attention span.
            grump-a1eeb
          • Summary

            I would summarize the article contents something like this:

            - - -
            Communications Minister Turnbull has issued a new Statement Of Expectations directing NBN Co to use any mix of technologies that lowers the initial cost of building the NBN.

            In so doing, Turnbull has ignored his own requirement for a Cost Benefit Analysis, and reduced the NBN's capabilities to a level that will be inadequate for Australia's commercial online infrastructure needs. A future government will have to rebuild the platform to catch up with Australia's Asian trading partners and competitors such as Korea and China, which have already embraced FTTP pervasively.
            - - -

            Apologies if I have the details wrong. You NBN aficionados will understand the details better than me already. But that's precisely my point. If you want to have non-aficionados like me buy into your arguments, you'll have more victories by making the facts and the arguments clearer from the start.

            If you prefer to have zdnet as a forum for the converted, and drive people like me away, just ignore what I'm saying or alienate me by categorizing me as a fool who only listens to 3 word slogans.
            Wombatmobile
          • Only 3 Word Slogans Required in OZ.

            On the contrary Wombat, that's all that's required to convince the average voter.
            Those empty slogans had them elect these conniving clowns to ru(i)n the country instead of their true vocation as members of the cast in the next episode of "Yes Minister"
            grump-a1eeb
        • Love your name.

          Are you aware that WOMBAT is a technological term, meaning Waste Of Money Brains And Time.
          So guess you are correct when you side with Turnbill as he has ignored his own CBA and others just to hammer home his 2003 Internet for us all. In 2001 FTTN was dismissed, he knew it but is still living in the 2003 era.
          Mudrat70
    • well written =/ story telling

      Or he could do what he did and write a well thought out, well sourced article explaining the full extent of what Turnbull has accomplished throughout this whole process, complete with small explanations and links to other articles for extra detail.

      Anything less would have just been slammed as unfounded rubbish or lies by anybody with an interest in this on the coalitions side. This article is exactly the sort of writing that needs to be done.

      I think for a simple statement the headline is sufficient - Turnbull has ballsed this up and the future will reveal that.
      Ayden Beeson
  • FTTP

    David Braue your an economic moron at the present time we are spending in excess of 35 millon dollars a day and I said day, on interest payments for the debt that the previous Government racked up wasting money on various whims including the fibre network and you want us to spend money we have not got on FTTP, the trouble with idiots like you is that you have no idea of economics, your motto is live now and pay later, but in the end someone has to pay the piper, the way to get a fibre network is to get the budget back in to surplus and when the country can afford the fibre network do it then, not now
    hilton1944
    • FTTN is temporary

      Hilton1944, you don't even make a coherent point. FTTP will one day be as vital to our economy as roads are now. FTTN is a temporary stop-gap measure, even Turnbull has admitted that the ultimate end-game is FTTP. If you're main concern is not wasting money, then surely you'd be up in arms over a $30bn+ temporary measure.
      Modeski
    • Economic Moron?

      If you're so damn worried about the budget, why aren't you protesting the Coalition's Broadband Network project? After all, we can't afford the $56 billion expense to do the job properly with FTTP at the moment apparently, so spending $41 billion on a hodge-podge internet upgrade that will deliver next to nothing for the majority of Australians seems like something of a bad idea wouldn't you agree?
      trish01
    • And you Sir...

      ...are the type of person that falls hook, line and sinker for Turnbull's very effective marketing. If you cannot educate yourself on the NBN (even basically) and understand the shifting budgets, costs, promises, lies and technologies that this discussion entails - and the impact it will have on our present and future economy - you don't deserve to comment here.
      The Guv
    • Not to mention

      You obviously have a very limited understanding of what is involved.
      Just for a clue, the original FTTP NBN would have easily paid for itself and ALL INTEREST charges and be readily upgraded and have a low operation and maintenance cost.

      The $29.5 Bill cap to cost (Govt funding) will mean extremely high market borrowing costs over and above due to extremely high OPEX of the dogs breakfast and the very substantial costs that will be incurred in future essential upgrades. High interest rate due to very poor risk factor. That Opex will kill the economic viability and the taxpayer will foot the bill and interest charges.

      Your statement demonstrates you have been imbibing the Bourbon of the Conservatives and Ruperts Media, it affects your brain and reasoning ability. Try Kool Aid - doesn't mess with your head.
      Or maybe research some facts, by 2025 even with the badly fudged figures of Malcolm's mates review, taking OPEX into account, both options will be in the identical financial position by 2025,(From the fudged Review figures) the difference's are where they will be by 2030 and 2050 and what do we get for our money and effort?
      Abel Adamski
    • Idiots?

      Please how much did it cost the Government to reprint/modify documents to change Program to Programme just to suit the whim of the Prime Minister. If you want to talk squandering of money and the dissipation of the nations capital, go right ahead, but please do not try and sell Mr Ab-Boot as a fiscal anything useful. So what if it is 35 billion. It is not the amount that is important :) Prime Ministers and Treasurers have been telling us that for years.

      Many years ago I lamented the loss of the Queens honours and knighthoods. But like about everyone I got over the nostalgic feeling and got on with it. They are back! at what cost? No idea. Do we need them? No Do they server any purpose other than to make Australia more a Menzies era country?. No!
      MadMattAu
    • Don't waist money on crap.

      You are more like the economic moron. If you aren't, you're the communications moron. If you think Turnbull's fraudband will save money you had better think again. It's going to have to be upgraded in as short a time as 5 years plus the cost of maintaining the copper will be massive. It would be cheaper to complete the FTTP now than it will in 5 - 10 years and money is cheap to borrow today. Things can't be too bad with the budget if we can afford to spend $5B on Abbott's PPL scheme.
      Don't believe everything Hockey, "the gross exaggerator" has to say either. The inherited deficit he was blurting out just after winning the election was $370B to be realised in 2017 growing to $420B. Now he is blurting out this grossly exaggerated figure of $667B. He cannot be believed and someone needs to teach him how to count. The $500B he wanted the debt ceiling lifted to wouldn't have been enough if this BS figure of $667B were true. This figure was only tossed in when the ceiling debt was abolished.
      Looks like there are two jugglers in this Abbott circus of tricksters, back flippers, clowns and illusionists. Turnbull who juggles the figures to prop up his fraudband and Hockey who juggles his figures to suite his agenda.
      Lastofthegoodguys
    • Just another brainless sheep.

      Malcolm Turnbull wants the taxpayer to spend $41 billion of a temporary system. Talk about total madness.
      Unlike the Abbott government, at least the conservative government in NZ have the brains to understand the need to roll out FTTP. They understand the future needs and also whats value for money. Not the dead end HFC and FTTN.
      Carl Hansen