Liberal dogma bites as Turnbull faces NBN's 'repugnant' reality

Liberal dogma bites as Turnbull faces NBN's 'repugnant' reality

Summary: He may not like it, but communications minister Malcolm Turnbull is going to have to make some hard decisions – and accept some hard truths – to turn his alternative NBN policy into anything more than thick reports and empty soundbites.

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This weekend will mark 150 days of the Abbott government and Malcolm Turnbull's communications ministry – putting them around 15 percent of the way through the government's current term – yet the government is still in election mode when pressed on its lack of progress in effecting policy change more substantive than media soundbites or the factual manipulations of the NBN Strategic Review.

We were reminded of this when, on the ABC's Q&A this week (watch it here), Turnbull was asked by a rural resident struggling to get decent Internet services what he was going to do to resolve the fact that the current Interim Satellite Service (ISS, which he mistakenly referred to as the Interim Satellite Solution) is struggling to keep up with demand.

It may be hard to swallow, but Turnbull's going to have to compromise party dogma to fix the NBN. Hot dog image CC BY-SA 3.0 Sunbeam60 (http://en.wikipedia.org/wiki/File:Hotdog_three.jpg)
Hot dogma: It may be a hard solution to swallow, but Turnbull must compromise Liberal-party convictions to build his NBN. Image CC BY-SA 3.0 Sunbeam60

Limited capacity on existing satellite solutions has long been understood to be a limiting factor, with Turnbull's predecessor Stephen Conroy on record explaining the prohibitive cost of buying all of the available capacity across a host of available satellite services.

It was always going to be a significant part of Turnbull's ministry to resolve this issue, which was already well understood back in 2012, when NBN Co announced its plans to launch two new Ka-band satellites in 2015 (a decision that, if you recall, Turnbull vociferously attacked for being a "Rolls-Royce" solution).

Yet Turnbull – who as opposition communications spokesperson argued that the private sector was more than capable of meeting demand – wasted not a second this week attacking the former Labor government, calling its satellite solution "absolutely appalling" and trying to skewer Labor on its figures about the number of premises passed.

"It is a compete shambles", Turnbull spat, correctly highlighting the fact that industry attempts to apply normal Internet-industry pricing and service mechanisms to the existing services had resulted in service so poor that iiNet stopped selling them back in August.

Yet the limitations on private satellite capacity are hardly the fault of either political party, but a product of the telecommunications private market that Turnbull continues to believe can somehow be prodded to suddenly and dramatically resolve all outstanding issues with Australia’s telecommunications services.

Rather than saying what most Australians would instinctively say about the situation – "thank goodness the former government had the guts to commit $2 billion to fix this problem correctly" – Turnbull went into campaign mode yet again: "it is an appalling state of affairs and I am trying to find some solutions to it at the moment," he said. "As with most messes the Labor Party has made, the only solution is spending more money."

Well, yes. When your existing infrastructure doesn't have enough capacity to meet demand, someone has to spend money, somewhere. And, in this case – unless Turnbull wants to contract Google to fly some of its blimps over Australia's regional centres and rural areas – this means adding additional satellite capacity.

Turnbull has had to admit – quietly, privately and quite painfully, I'm sure – that the Coalition's dream of the broadband market being adequately serviced by a free-market capitalist telco Utopia is little more than a pipe dream.

Look past the copious and predictable volume of political grandstanding that, inexplicably, has continued months into the new government's term, and you see that the need for additional satellite capacity is just the latest in a long string of cases where Turnbull has had to admit – quietly, privately and quite painfully, I'm sure – that the Coalition's dream of the broadband market being adequately serviced by a free-market capitalist telco Utopia is little more than a pipe dream.

TPG's decision to roll out fibre-to-the-basement (FTTB) to half a million potential NBN customers is another nail in the coffin of the Abbott dogma. An extensive FTTB network built by TPG would not only allow the upstart company to cherry-pick customers in those areas – typically younger, IT-hungry types who appreciate the value of good broadband and are willing to pay for it – but would compromise the necessary infrastructure monopoly that, NBN Co explained to Turnbull months ago in a briefing document he simply brushed off, must exist if the project is to pay itself off.

The FTTB issue puts Turnbull between a rock and a hard place, and it is perhaps here that he is right to blame Labor: the previous government's blind insistence on running fibre to every apartment, rather than implementing a more-pragmatic FTTB solution, created more problems than it solved and kept rollout numbers far lower than they should have been.

Had Labor spelled out an FTTB strategy early on, TPG wouldn't even be bothering to try to compete on an infrastructure level with NBN Co as its expenditure would be quickly rendered redundant.

Yet there is equal blame here for the Coalition: it's now obvious that TPG, Optus and the other companies considering FTTB deployments were aware that ubiquitous FTTP would make their own FTTB unsustainable. TPG announced its plans just over a week after Abbott was elected – all but confirming the reason it hadn't announced its move earlier.

The fact that, in the wake of the Coalition's election and its still-evolving policy, those private companies feel its NBN alternative won't be adequate competition for them, speaks volumes about the industry's perception of Turnbull and his NBN revisionism.

Like a hungry vegan at a hot-dog eating competition [resolving these conflicts] will require Turnbull to overcome his internal revulsion for what, just after the 2010 election, he called a "repugnant monopoly".

Whereas Conroy was seen as a fierce policy bulldog who was not afraid to roll up his sleeves and pummel Telstra into submission, Turnbull's performance to date – and his failure to commit to any real action beyond his casual "carry on" hand-waving – appears to have been received by the industry as ineffectual and empty.

Just as the only improvement to the satellite situation will come from Labor's 2012 cash splash, Turnbull's insistence on dismantling the current rollout is seeing him paint himself into a corner. He now faces the prospect of having to concede that his party's utilitarian telecommunications policy is simply out of step with the realities of the industry.

Blocking might will help preserve the tenuous revenue model on which Turnbull's alternative NBN model depends, but – like a hungry vegan at a hot-dog eating competition – it will require Turnbull to overcome his internal revulsion for what, just after the 2010 election, he called a "repugnant monopoly".

The Coalition's NBN was born in party-room fantasyland but must, as Turnbull is increasingly and painfully becoming aware, be built in the real world. And, in that real world, "I am trying to find some solutions" will only get you so far.

As Yoda famously said: "You must unlearn what you have learned... Try not! Do. Or do not. There is no try."

If Turnbull can't stop blaming Labor and start actively reconciling the many discrepancies between his vision and that real-world reality over the next 945 days (give or take a few), trying will be far from enough. If he can't start offering definite answers rather than finger-pointing and confusion, he may find his vision ended by people determined to vote for somebody – anybody – who will.

What do you think? Is Turnbull right to blame the satellite issue on Labor? Should he allow TPG to build its FTTB network? Or, can the new NBN properly grow despite cherry-picking?

Topics: NBN, Broadband, Government AU, Australia

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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20 comments
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  • Maybe I'm just tired...

    But I had trouble following some parts of the article. Anyways, thanks for trying to clarify something about the NBN. Google blimps could be cheaper than satelites. I hope they are considered.
    JHBP
  • Maybe I'm just tired...

    But I had trouble following some parts of the article. Anyways, thanks for trying to clarify something about the NBN. Would have been easier to read if you were less angry at Mr. Turnbull I think. Google blimps could be cheaper than satelites...? I hope they are considered.
    JHBP
  • Turnbull can't win by stopping fiber.

    He may as well give the people what they want.

    A proper fiber-based NBN.

    The resale price of brand new apartments is going to go up... that is, the apartment buildings that already have the full-fiber NBN connected from the start.
    Vbitrate
    • Interim Satellite Service

      Regardless of blame, unless NBN spend some more money to immediately expand the service, thousands of rural and other "non Telstra" serviced premises will be without ANY internet service until at least 2015-2016 - no actual implementation plan has been released (New Satellites yet to be launched and tested, yet alone built!). Additional capacity is readily available on the Optus network. It is just a matter of $$, which Turnbull can easily "blame" on the previous Government anyway. His answer to the Q&A question was less than acceptable.

      With regards to FTTP vs FTTN one major issue yet to be publically addressed is how to provide power to the equipment needed at the Node. With FTTP the power is provided at the user premises. Cost of providing power at the node will be very significant. Not withstanding this power issue, there are compelling arguments in terms of time to implement, difficulty in access, and much less work hence cost - in support of FTTN. The emotive performance issues raised by the purists, are just that, given the trend towards wireless internal networks and tablet computers which do not fully utilise the speed anyway. It is really important to understand that FTTN does not prevent the future installation of FTTP as required, on a user pays basis.
      rowlanr
      • FTTP on demand isn't that workable in the short to medium term...

        Read these two about "FTTP as required", aka Fiber on Demand. Possible, but not very likely in the short to medium term (which is very significant).
        ---------------
        http://delimiter2.com.au/turnbulls-fttp-demand-slipping-away/
        http://delimiter2.com.au/the-coalitions-fibre-on-demand-promise-nothing-but-a-pipe-dream/
        ----------------

        "the trend towards wireless internal networks and tablet computers which do not fully utilise the speed anyway"

        Um, that's a little short sighted, espeically with the Wifi 802.11ac spec. If you have 5 of these devices, plus TV's, plus a PC all wanting bandwidth, the FTTN solution is going to be short sighted. Plus it's not about bandwidth. It's about a reliable ubiquitous network that will enable the future shift of the economy (with manufacturing and mining seeing less investment you'd hope we would have some type of vision for the economy). Add to that the real possibility that FTTN over the Telstra copper network will possibly cost very similar to a FTTP rollout when the degradation of the network is taken into account and the return on investment is reduced due to less high end wholesale packages being sold (how can you sell a 1000/400mbps connection to a business in a primarily residential area using FTTN taking into account the two articles above).

        FTTP is innovation enabling, FTTN/HFC is just much of the same as we have now. Like comparing the old Nokia's and the like to the iPhone, both make phone calls, one disrupts and transforms a market. Do we really just want a "more of the same" network, or one that has a vision to transform.
        gapgro
      • Paul

        "It is really important to understand that FTTN does not prevent the future installation of FTTP as required, on a user pays basis."

        No, it is really to understand that is a LIE. Fibre on demand is more work (and hence cost) than wiring every single house in the street up in one go.
        There is no workable upgrade path from FTTN to FTTH. The architecture is different (nodes go in different locations), as is how many fibre strands are required at the nodes.

        FTTN, huge box of active electronics connects 200 homes worth of copper wires to a pair of fibre optic strands.
        FTTH, small box of fibre patch cables and passive optical splitters connects ~100 homes worth of fibre strands to say 20 strands of fibre.

        The fibre can't be reused, as too small and in the wrong location, the cabinet is also useless being far in excess of what is needed for fibre splitters, the power feed to the cabinet is useless as almost all the FTTH nodes are passive and don't need electricity.

        Forgot the LNP concept of "user pays" Australia consumers as a majority want FTTH, and are willing to pay for services that will pay off the investment. That is the true meaning of user pays.

        I personally will be boycotting FTTN if it's rolled out in my area, I cannot and will not support government money being spend on this lemon of a communications network. FTTN is simply a continuation of the same failed broadband policy that started in the 1990's of give Telstra money to patch up their stuff, or to pay for equipment they then own.
        haseo20
        • Same old 1990's "do nothing" policies

          Turnbull & Abbott's luddite approach to FTTP is simply a continuation of the gross incompetence and negligence of the former Howard government, of which they were both key members.
          ITenquirer
  • Turnbull out of his depth with communications.

    It will always be the case for Turnbull to blame the previous government because there will always be big problems with Turnbull's Fraudband roll out. As well mas the blame game Turnbull will be doing some back flips here and there also. This government will never admit to it's own mistakes.
    As for TPG, the Abbott government is all for the private sector investing in infrastructure so it should welcome TPG's investment. That is, if it doesn't have rules and regulations for one industry and not the next such as in the Cadbury and SPC decision.
    The NBN can grow, when the government changes it's inferior Fraudband to FTTP. It will be cheaper to do now rather than some time in the future and will solve any competition problem with it's competitors.
    Lastofthegoodguys
  • Nero Fiddles while Rome Burns

    Mean while back in fairyland no one in the coalition can come up with a decent NBN and they refuse to admit that the one labor had, the one that was already being implemented, was and still is the best solution to our appalling substandard Broadband ( Guatemala has better Broadband than us) There are the Haves, those who got the FTTP before Joe the Handy Man and Tony the Gadget Guy got their hands on it and screwed it up , are laughing all the way to the high speed internet, the rest of us can only dream about, and the Have Nots, Cable BB that tends to deliver only half the speed it promises, ADSL 2+ that is barely adequate for even the most simple tasks and then there are places like Tweed Heads, which is in NSW but the telephone lines and exchanges are in QLD so no one wants to claim the cost of putting in anything that remotely resembles a 21st century BB service, so they are stuck with, yes you guessed it, DIAL UP! Great for promoting business investment.
    The time of teaparty politics should be long gone, the Govt. is obliged to give us the highest quality available NBN no matter who thought of it first, get off that fat ego of yours Tony get the coalitions heads out of their collective arse and get on with giving all of Australia the service they need.
    Callie G
  • I don't understand

    Clearly the NBN need to speed up the delivery of the satellites that are under construction.
    chugs@...
    • How?

      The satellites are under construction. Have been for a while.

      The launch is booked - you don't get these on short notice and you have to do it at the right time.

      Can't just throw a comms satellite together and launch it.

      NBNCo started the process a while back and it takes time. Turnbull can only watch as the plan he opposed is executed to save the people.

      Meanwhile he took the Photo op in front of the satellite (that he opposed).
      richardw66
  • Turnbull will be reamed on the Telstra deal too

    They hold all the cards...they still get their $11b even if he can't manage a deal for the copper that's so critical to his plan, so why wouldn't they hold out for more?

    In fact, they have a duty to their shareholders to do so.

    Also, he should consider something like Comcast has done to increase wifi access:

    http://arstechnica.com/information-technology/2014/02/comcast-customer-surprised-to-learn-new-router-is-also-public-hotspot/
    Tinman_au
  • The whole NBN was approached from the wong direction

    The NBN was designed as another Telecom Australia - a monopoly. Turnbull offered a 50% subsidy to those willing to cough up money to connect. Let's see more activity where the user pays and communities band together to achieve a common goal. We need smaller Govt - not monolithic bureaucracy like the proposed NBN organisation. Mike
    mike111ryan
    • All for communities but…

      This could have been done before.

      In the UK where BT is supposedly rolling out the ideal Turnbull solution the communities are actually having to band together to get a service.

      Try the same for other utilities maybe. Start your own water service?
      richardw66
    • Reality vs Ideology

      Get off the dog in the manger sabotage routine.
      You do understand what is involved, or do you.?
      Do you have any idea on the long term results and opportunity cost with your solution. ?
      It is all about practicality and long term efficiency and cost effectiveness. All parameters that are completely ignored or fancifully idealised when ideology is involved.

      You may wish to see where Turn bull should be asking the questions instead of another vengeance driven vendetta that is just more time wasting flim flam

      http://delimiter.com.au/2014/03/11/nz-govt-rejects-turnbulls-hfc-cable-approach/
      http://delimiter.com.au/2014/03/13/five-ways-nz-smarter-australia-broadband/
      Abel Adamski
  • Mr Fraudband

    Watched Q & A, complete waste of time we had the "alleged" minister for communications following Abbott and Cretin's instructions and taking no questions on NBN and just making platitude responses to questions about stopping the boats, Snowdon's (alleged treachery when there was none) and SPC, Toyota, Ford and Holden.
    There was only one question on communications the one about "satellite services", yes new satellites are coming Conroy ordered them and Fraudband opposed them.
    Fraudband blamed low prices and generous data allowances for causing the problem, perhaps people in remote areas should only use telegrams and smoke signals.

    His policy is National Party voters should have to pay through the nose for minuscule data allowances.
    Kevin Cobley
  • Smaller Government yes please!

    All Australian Governments should stop building Roads and Airports it should be up to private enterprise to fund and build this infrastructure.
    I am tired of my hard earned taxes being use to build Rolls Royce roads and Airports that are only used by car and travel geeks for their fantasy lives and trips to brothels and Asian sex tours.
    I don't use Roads and Airports so why should I have to pay for them, Private Enterprise now!
    Kevin Cobley
  • This Mob Couldn't Lie Straight in Bed!

    Seems rather obvious they have no intention of providing us with any useful infrastructure. Just a massive fire sale to benefit themselves & their sponsors.
    How soon before their whole Fraudband mess goes up for sale alongside Medicare, Australia Post & anything else they can get their grubby paws on.
    grump-a1eeb
  • Can Not Say It Any Better Than Seth Godin Does

    "The problems you've got left...are probably the difficult ones.

    We'd all like to find discount answers to our problems. Organizations, governments and individuals prefer to find the solution that's guaranteed to work, takes little time and even less effort.

    Of course, the problems that lend themselves to bargain solutions have already been solved.

    What we're left with are the problems that will take ridiculous amounts of effort, untold resources and the bravery to attempt something that might not work.

    Knowing this before you start will help you allocate the right resources... or choose not to start at all--this problem, the one that won't be solved in a hurry, might not be worth the effort it's going to take. If it is, then pay up."

    And we all know a FTTP is worth it!
    ioswoody
  • To answer

    "Is Turnbull right to blame the satellite issue on Labor? Should he allow TPG to build its FTTB network? Or, can the new NBN properly grow despite cherry-picking?"
    1) No - David nailed it
    2) Switowski intimated that NBN will overbuild them with FTTP, but again David nailed it
    3) No, unless we are prepared to accept continuing growing taxpayer subsidies, effectively subsidising the cherry pickers
    Abel Adamski