NBN deadlines missed, can Turnbull make industry play nice?

NBN deadlines missed, can Turnbull make industry play nice?

Summary: Having already missed the first significant deadline of his ministry and by all accounts set to blow way past a more significant one, Malcolm Turnbull's NBN turnaround effort is already looking iffy. He's prevailing upon the telecoms industry for "patience" and "collaboration", but will they listen?

SHARE:

Malcolm Turnbull's communications ministry quietly missed its first major, self-imposed deadline on Sunday, which marked 60 days of the Abbott government and therefore the latest date on which the current NBN review should have been delivered.

That deadline was never going to be met – nor was Turnbull's earlier commitment to November 11. Neither, for that matter, will Tony Abbott be able to honour the promise he made, on the launch of the Coalition's official NBN election policy, that he would deliver a revised NBN Corporate Plan by his 100th day in office (around Christmastime); now, Turnbull says that is due in mid-2014.

Those aren't the only deadlines being missed: as Turnbull made clear in his CommsDay Rebooting the NBN speech, neither will his promise – part of official Coalition policy and repeated over and over again during an election campaign built on discrediting the previous government's NBN project – to give every Australian premise “a download data rate of between 25 and 100 megabits per second by late 2016.”

PerfectStorm
Turnbull certainly has the NBN's helm, but the storm is only just beginning. Screenshot by David Braue / ZDNet

Sorry, folks. It's just not going to happen. So much for "sooner".

Obviously, we now learn, the Coalition was just kidding with all those straight-faced election promises. Its NBN review, apparently due in early December, has blown out its timeframe by nearly 40 percent and the revision of its NBN Corporate Plan is already six months behind schedule.

This, from a government that made a hobby of bludgeoning Labor whenever it managed to delay the NBN by weeks or months.

Stepping aside from pedantry, however, one thing is clear: now that Turnbull is in the captain's chair and becoming aware of the true challenge of actually building the NBN – rather than just hobbling it with one acid-filled speech after another – things are very, very different from what was promised in the election.

Now the growing consensus is that the FttN rollout won't begin until 2015 and will probably run until 2021 – the date when Labor had initially planned to have its fibre-to-the-premise (FttP) network in service. For those keeping score, that's a six-year rollout – three times longer than Turnbull promised before the election.

I hate to say I told you so but... oh, wait, who am I kidding? I love to say it. Scratch that.

Consider, though: given that so much of that plan still remains up in the air, even 2021 could be an optimistic half-guess. Any progress depends, for example, on the Coalition government's renegotiations with Telstra – for which Turnbull amusingly called for quick conclusion “in a spirit of collaboration and partnership”.

Because, you know, Telstra is just dying to gift-wrap its copper network for Turnbull. Perhaps David Thodey will wrap up the network with a nice figgy pudding and deliver it to Turnbull's doorstep for Christmas?

I'm sorry, but being sued during major contract negotiations doesn't exactly suggest that Telstra is feeling that spirit too. Indeed, there is still a very large question mark around whether an economically deterministic Coalition can offer enough money to get a disaffected industry to even complete its obligations around the current rollout. The way things are looking, anybody wanting to put a bit of extra cash in their pockets for Christmas might consider starting an NBN-contractor dead pool.

As we hunker down to wait for yet another broadband plan to come to fruition, it's worth remembering that many of the obstacles Labor encountered came not only from its own over-ambitious agenda, but from the uncertainty that Turnbull himself sowed and reaped over three years in virulent opposition.

Turnbull has begged “patience” from the industry as he seeks to sort out the remnants of Labor's rollout, and he continues to blame the disarray on Labor's own mistakes. This is hardly surprising.

And yet, as we hunker down to wait for yet another broadband plan to come to fruition, it's worth remembering that many of the obstacles Labor encountered came not only from its own over-ambitious agenda, but from the uncertainty that Turnbull himself sowed and reaped over three years in virulent opposition.

Had he supported Labor's FttP ambition but pushed instead for tighter oversight of the processes by which it was being rolled out – instead of simply arguing for a totally different policy – would the industry have fallen in line faster, knowing that FttP was inevitable?

It's not a question we can answer for sure, but it's certainly one to consider as Turnbull swaddles himself in the blindly optimistic capitalism that marked the Howard government's poorly-executed privatisation of Telstra.

Even now, Turnbull speaks in misty-eyed terms about a private sector given government subsidies “to support deployment in less economic, typically rural and remote, areas for the project and business execution risk to be carried by those best able to manage it.”

This is a worry, because – as we have seen – for better or worse, the private sector in Australia is simply not interested in managing that risk, or taking it on at all. Construction firms were, we must remember, contracted to deliver specific outcomes around the NBN based on their own estimations of the cost of the work – and, by all accounts, struggled to deliver outcomes that meet their own expectations.

Whether or not those expectations were driven by unrealistic government demands, as Turnbull will allege, or by fierce competition for what was perceived as A-grade project work, as Stephen Conroy will likely contend, the fact remains that Turnbull now faces a serious problem in mustering the manpower to deliver on his own vision.

Some have pointed to recent investments by the likes of TPG – which bought 4G spectrum earlier this year, is investing in undersea capacity via the $350m Hawaiki project and wants to build fibre to around 500,000 capital-city apartments – as a sign that the private sector has been revitalised with Coalition's election.

And yet I seriously doubt TPG, or any other company building its own infrastructure, is going to freely allow access to that infrastructure. Turnbull's NBN Co could deliver such an outcome were it to buy the infrastructure when it's built – but that's not really the plan, now, is it?

Turnbull still has not outlined how he will deliver the open-access wholesale network that everybody agrees is necessary – while getting the private sector to build enough infrastructure that the government can shed the risk that he believes it should never have taken on in the first place.

Despite assimilating TransACT's fibre network and all his rhetoric about capitalising on existing HFC networks, Turnbull still has not outlined how he will deliver the open-access wholesale network that everybody agrees is necessary – while getting the private sector to build enough infrastructure that the government can shed the risk that he believes it should never have taken on in the first place.

But who will carry that risk? Modern business cases simply don't allow you to fund infrastructure that will facilitate the creation of new competitors that will eat your lunch. Foxtel hasn't allowed competitors onto its HFC network, Optus didn't do it either. Optus has reined in its mobile virtual network operator (MVNO) business in an attempt to stop price erosion in the crucial mobile market.

Everywhere you turn, Australia's private sector is showing exactly why Turnbull's business idealism is completely misplaced – and why residents in rural areas of Australia, who everyone agrees need broadband sooner than anybody else, have been left holding the bag once again.

Turnbull has appealed to the telecommunications sector for “commitment and flexibility, patience and hard work” as the industry's new captain works to turn the ocean liner that is Labor's NBN plan towards the Port of Broadband Mediocrity. But as Turnbull's nascent ministry misses deadline after deadline, and staggers from one broken promise to another, it's worth wondering not only when but if this boat will ever reach shore.

What do you think? Is Turnbull just doing the best he can given the situation? Or is he reaping the effects of the dissent he sowed in Opposition? Will the private sector be as nice to Turnbull as he wants to be to it? And: is this thing ever going to be built?

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.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

8 comments
Log in or register to join the discussion
  • Great article. Quite amusing that Turnbull should be asking for patience after telling us for so long that we need to roll out FttN because it can be done quicker. This blatant hypocrisy is to be expected from Turnbull and the rest of his zoo crew chums when it comes to GimpCo. Perhaps the more galling part is talking about "hard work" when we know they dont want to do any real hard work, instead they'd rather rely on the obsolete copper so no "hard work" needs to be done.

    The GimpCo story so far:
    Ziggy and chums arrive.
    Blocking release of information after calling for transparency while in opposition.
    Deadlines missed.
    "I told you so" count rapidly increasing.

    1138 days to go!
    Hubert Cumberdale
  • All on track!

    They promissed to destroy the NBN and that's what they do. Probably as a part of their deal with Murdoch. No shame they have.
    dronetwo
  • Only FTTP will self fund

    The most compelling economic rationalist argument for pulling out all stops to build FTTP as planned is the wholesale revenue.

    Pre-election, Mr Turnbull touted $18 per month as the wholesale revenue projection for his FTTN. Meanwhile, FTTP was already quietly returning double that, where built.

    At least 25% of randomly located broadband customers will always choose the fastest services on offer, in the global experience, attracted by the value they put on what such speeds enable.

    It is the very high revenues from this minority which massively increase the ARPU across the board, which cost-recovers the construction more quickly.

    An FTTN build that delivers adequate universal service to urban Australia will possibly not even fully pay for its construction, whereas FTTP has proven that it will be fully user-funded.
    umbria
  • Well...

    you know what they say, "there's a sucker born every minute". If anyone believes a word of this government, they are definitely a "minute" baby...
    Tinman_au
  • Malcolm doing a great job...

    Thanks for a great article. Malcolm's mission was to destroy the NBN and he's doing a great job at it! Unfortunately for him, history will not be kind to him. There is no glory in robbing your countrymen of the opportunities and rewards of the digital age. Malcolm's actions will cost this country far more than Labor's NBN would ever have cost. Too bad! The people spoke on Sept 7 and Australia will have to live with the consequences.
    ozimarco
  • Why the surprise?

    The coalition's last attempt at broadband. after a decade of planning and reviews, OPEL, followed the same pattern.
    21/09/2006 Tenders called
    18/06/2007 OPEL awarded contract and budget increased 60%
    09/09/2007 Funding agreement signed
    02/04/2008 Agreement cancelled for failure to meet contract terms, in particular, OPEL was planning to cover only 72% of the connections required

    A decade of promises and then a contract cancelled for failing to deliver anything and offering only 72% of goal even with a 60% cost blow-out.
    Goresh
  • No surprise

    Great article. Pre-election, I was surprised how many other tech commentators fell for his mythical plan to deliver faster broadband by the end of 2016, as if all it needed to change course mid-build was some coalition masters cracking the whip. The time frames were ridiculously tight given both local and overseas experiences.

    It's clear that the NBN already had plans to tweak the build prior to the election (hence the FTTB trials), so all Turnbull has managed to do is clear the decks of built up knowledge and give contractors zero incentive to complete their contracts because they figure there's a good chance the Coalition will start over and farm out new contracts to someone else.

    The difference between the Coalition's position and Labor's is that the Coalition's position was entirely foreseeable with the information to hand whereas Labor's was not given private contractors accepted contracts they only later determined weren't fulfillable.

    Malcolm should stick to tweaking at the edges of the build with FTTB and other cost/time saving measures and work on re-negotiating the build contracts. Even if the labour costs blow out, it'll still be a better outcome then the massive task of trying to change to FTTN mid-stream.
    hedgeddown
  • Few want faster speeds?

    If subscribers are only likely to be interested in 12 mbps, why is it that many, if not most, mobiles are traded in before they become unserviceable?
    Listohan