NBN for just $2047.62 per vote

NBN for just $2047.62 per vote

Summary: The government dumped its well-intentioned bidders and spent the day awash in adulation from an industry that suddenly felt all its Christmases had come at once. But isn't this the same government that, two weeks ago, was warning it had to ditch key election promises for lack of funding?


I'm thinking of a number from one to 10. If you guess it, I will come and clean all the windows in your house for a year. Five? No. Two? Nope. Seven, eight, one, four? Not even close. Three, six, nine? 10? Nope, that's not it either. Give up? OK, it was 14.

Yes, I know I said it was between one and 10, but I changed my mind. Oh, stop complaining. You agreed to play the game, but it's my game and I can change the rules whenever I want. Hey, where are you going? Remember, the lift stopped between floors and you can't get out until the power is back on. Want to hear a song?

This is pretty much the best way I can describe the bait-and-switch that Prime Minister Kevin Rudd, Communications Minister Stephen Conroy and their crew have pulled on the telecoms industry and the five commercial bidders who spent millions of dollars scoping, designing and tendering for the FTTN project the government spent most of the past year saying it wanted.

Instead, the government dumped its well-intentioned bidders and spent the day awash in adulation from an industry that suddenly felt all its Christmases had come at once. Big-spending Kev's $43 billion splurge is a stroke of political gamesmanship that will both create jobs and ensure Labor remains in office at least until 2017 or so. That's $2047.62 per vote (let's pretend for a moment that every Australian can vote).

Malcolm Turnbull might as well take the next eight years off.

It was only two weeks ago that Wayne Swan ... was warning of the 'sacrifices' and 'hard choices' that would be necessary in May's budget as Labor prepared to ditch key election promises

The funny thing is that it was only two weeks ago that Wayne Swan, the guy who gets to sign the big novelty cheque (and a whole lot of real ones), was warning of the "sacrifices" and "hard choices" that would be necessary in May's budget as Labor prepared to ditch key election promises because it couldn't fund them. How can we, then, explain the extra $38.3 billion the government has suddenly found to bring broadband to every corner of Australia?

Well, it's 90 per cent of Australia's corners, actually. Those of you taking time to do the maths will note this is indeed less than the 98 per cent target that Conroy had reiterated over and over again for the past year and was repeating as recently as 13 March, in his speech at the ATUG annual conference. At that point, Conroy told the audience "the government is locked down, giving very close and careful consideration to the Panel of Experts' report on the five NBN proposals".

Hogwash. This is the same report, you must remember, that the PM told us this week had already concluded that none of the five proposals offered value for money. How do you give that conclusion "consideration"? It was only when Conroy addressed the Communications and Media Law Association, on 25 March, that he stopped throwing around that 98 per cent figure.

We can, from this change of rhetoric, infer that it was only within the past three weeks that our government decided to definitely take this plan of action, even though it received the Expert Panel's report back on 22 January.

Over the intervening months, it appears, Conroy was, um, well, how do I say this nicely? Leading us down the garden path. Telling half-truths. Keeping up appearances. You get the idea. That's because Conroy and Rudd were really hunkered down figuring out how to reverse their poor scoping decision, break the news of their backflip nicely, quell the critics and deliver a big-spending project that would fix Australian telecoms once and for all — and get them re-elected in the process.

Swinging for the stands
They certainly found it. Yet for all the excitement, media coverage, big promises and political smiles of the day, the NBN has this week been born in a shroud of double-speak that has characterised Rudd's government since it came into office.

When it comes to major telecoms investments, Labor has so far been better at cancelling projects than starting them... Conroy is 0 for 2 in the broadband stakes and doing even worse when it comes to overall policy follow-through.

Remember that one of Conroy's first acts was to cancel a viable, working digital television working group and start his own, more expensive, digital television working group. He then cancelled a viable, signed contract with Opel and replaced it with, well, nothing. He cancelled the previous government's perfectly fine NetAlert free web filter program and replaced it with a pointless blacklist-based system that won't work, and which nobody wants anyway.

Labor then launched a major tender for an FTTN network, spent months threatening drawing and quartering for any company that dared discuss the process, threw out Telstra for not following the rules of its tender, and ultimately changed its mind and also threw out all the other suppliers, who had spent millions following its rules to the letter.

When it comes to major telecommunications investments, Labor has so far been better at cancelling projects than starting them. This is a government that is just winging it as it goes. I'm not sure what his golf handicap is, but Conroy is 0 for 2 in the broadband stakes and doing even worse when it comes to overall policy follow-through.

We are now 18 months into Rudd's tenure and we have yet to see a single clod of earth turned, a single fibre-optic cable laid in the ground, a single person actually employed to deliver any sweeping broadband initiative. What Labor has given us so far is a mountain of rhetoric and an intractable inertia that has left the entire communications industry dazed and bewildered.

Its latest backflip will have at least one unintended consequence: given that the government has so far built nearly all of its telecommunications policy on shifting sands, can we really expect any company to seriously invest in Australian telecoms? And what of the companies that planned long-term investments, in good faith, around the planned FTTN roll-out? They must now go back to the drawing board and, in many cases, will be putting further infrastructure investment on permanent hiatus.

The NBN is an encouraging outcome from a flawed process. We now have promises of money — lots and lots of it — and bandwidth, also lots and lots of it. This network will indeed bring Australia out of the internet dark ages (at least within the limits of Australia's transoceanic backhaul). Fibre to the home, after all, offers both immediate and long-term performance improvements to 1Gbps and, if ever necessary, beyond. For most of the next eight years, however, you'll be stuck with the same slow ADSL or (peace be with you) dial-up connection you've struggled with for years.

Just as noteworthy is the government's commitment to regulatory reform: the terms of its yet-another regulatory review confirm that operational separation of Telstra is back on the table, as it if mattered anymore.

More on that next time. For now, I'm just happy that I can stop trying to figure out which mustard goes best with a pair of Asics.

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


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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  • fibre to the wherever

    Actually I am not sure why the average Australian surfer needs such large bandwidth..
    seems there is lots of already deployed fibre out there provided by many carriers and technology changes make it capable of handling higher and higher bit rates..... is I-commerce complaining about available bandwidth? the last mile will still be copper for the householder.it has been proven worldwide that its just too cost prohibitive to have the O to E in the home.
    I for one would be happy with 3 or 4G for my internet. What would I do with 1Gb and how much would it cost?
  • More fibre

    As usual, government is trying to force something down our throats whether we like it or not.

    For one moment I truely believed that our planet earth was in dire need of help. Forgive me for thinking that we should try and fix the thing that is going to support us and all future generations for years to come.

    Oh yeah, I forgot Mr Rudd, that my broadband really needs to be faster.

    Anyone read the news lately, the bloody polar ice caps are melting sooner rather than later. We had huge bushfires in Victoria. Nearly every state is experiencing water shortages.
  • No reason why not

    I run my own web and mail servers so I could use some of the extra bandwidth on offer and since I don't make any money from my operations I don't see why I should have to outsource it. The bottom line is that this country has the resources, the technology and the manpower to build an FTTH network so there is no reason why we shouldn't do it.
  • NBN

    I don't really understand your article. You get really angry in the first 90% and then say: "The NBN is an encouraging outcome from a flawed process....This network will indeed bring Australia out of the internet dark ages (at least within the limits of Australia's transoceanic backhaul). Fibre to the home, after all, offers both immediate and long-term performance improvements to 1Gbps and, if ever necessary, beyond."

    That sounds like a pretty decent endorsement.

    So do you mean you didn't like the process but approve of the result? IF so, why didn't you just say that? IF you meant something else, would be intersted to hear a clarification.

  • Master stroke

    In hindsight, this NBN announcement and the approach from day 1, has been an absolute master stroke in political gamesmanship from the current government. One which shows their obviously "vast superiority to the previous government"!

    Yes it will cost, "ouch", and "yes it will take time", but we will be getting a more obsolescence proof, complete network. Rather than a mismatch of different, easily superseded technologies from a number of different owners, or a complete network which won't totally rely on one private, profit driven owner; with wholesalers fighting for access and all the incessant, subsequent ACCC/court visits! A network which will hopefully be "built by Australians (rather than being contracted to overseas giants) for ALL Australians"!

    You see, apart from the non regulated mobile sector, investment had stagnated, so what did the government do? They called for tenders to build a partially government funded (assumed FTTN) NBN. Also, although pushed, they wouldn't be rushed and even extended the timeframe to prove transparency.

    Then they excluded Telstra, the obvious, #1 candidate and most cashed up of all the tenderers, knowing they would "fight back". The government even casually indicated that Telstra's property could be confiscated, in the national interest, to cater for the project. Knowing full well this wouldn't be the case. Sneaky! This left Optus as the new #1 candidate and Optus (via TERRiA) had always said they'd prefer not to be the builder/owner, oh dear!

    But how would Telstra fight back and what did they do to combat their exclusion? They "further invested their own money, updating products, services and technologies, in the areas which had been stagnating"; to get the jump on their main competitor, before that competitor, Optus won the NBN tender. Checkmate.

    The governments move was designed to "trick Telstra into further investing and updating" and that's exactly what happened. They tricked Telstra into investing, in the interim, until the NBN is built, brilliant! Don't forget too, the same government had already achieved what the previous couldn't and only in a matter of months in government, by having Telstra switch on ADSL2+ to 100's of exchanges.

    And now that the government have announced they are doing a $43b FTTP, what have all the Telco's, ISP's and their splinter groups said ("after all they never agree on anything")? They have all lauded praise on the government. Optus, CCC, Telstra, analysts etc and the government (but not the opposition of course, lol) have all agreed that this is exactly what is required!

    These companies have all been out thought and out manoeuvred by the government. Telstra won't admit they were tricked into investing. Optus won't admit they didn't really want to win the NBN, the CCC's David Forman won't argue with the Mrs, so instead of egg on their faces, they have all said "bravo", rofl.

    This government now has the tick of approval not just from Telstra, something the previous government couldn't achieve, but "approval across the board", something the previous government could only have dreamt about. Australia's comms companies and the government are all now heading in the same direction, at last and the government have come out smelling like roses. Whereas the previous government smelled like a dead mullet! Although I'm sure I'll be told otherwise very soon, by all the usual, Liberal faithful, rofl.

    Again I repeat - "masterstroke Rudd/Conroy". Now wake up with net filtering! Or do you have a rabbit up your sleeve there too?
  • Why not make it faster??

    I remember an article over a year back about how the CSIRO (a government research body) had developed new electronics to go with optical fibre networks that would increase the speed of an optical fibre network to 64Gbps and they were already working on increasing that speed further. This technology was just as easy and cheap to make as that which it would replace.

    So why isn't the government supporting this state of the art technology which australian taxpayers have paid so much to be developed and which would increase the speed of the network to 640 times that which this new NBN plan aims to, and which at worst would only add a fraction of an increase in cost.

    Surely they could then do a dance singing about how they've created even more jobs and how australia is still an innovative country.

    Shame they think we all love them spending even more money on half-done projects.
  • A Fantastic Visionary

    This is precisely what Australia needs:

    * Fibre To The Home (At least 100MBps) to 90% of the population

    * The FTTH network being a seperate wholesale only entity, not part of Telstra Wholesale.

    Thank you Kevin Rudd and Senator Conroy for delivering. Thank you for scrapping FTTN and choosing FTTH instead.

    Thank you for not caving in to Telstra and adding to Telstras grip on the market. We need a seperate wholesale entity and to possibly break Telstra in two.

    Please remember to put in loads more international bandwidth backhaul to the USA, Europe, Japan/Asia and South Korea.

    I notice some other countries (France) have admirable local bandwidth situations but much worse international bandwidth. So when increasing local connections to 100Mbps the need for MUCH more international bandwidth will become apparent.
  • Only for the chosen few

    I have discovered I am not part of the "chosen" 90%.. Oh goody high latency super fast 12mbps satellite for me.. Oh joy, I can hardly wait.. Thank you Mr rudd for offering me an inferior connection then I have right now..
  • Who Cares

    Does anyone really care anymore?

    After the last few years, whats the point? I think I would rather Labor forgot about the NBN and just left the Telecomms industry alone until they are hopefully voted out.

    These bozos aint never going to build it anyway, so just sit back and *try* to enjoy what you got, and let the businesses continue to struggle with speed.
  • great! if you ignore the numbers...

    FTTH is undeniably a forward-looking decision that will provide the best technical outcome for 'most' Australians. (and i'm tired of hearing the mainstream non-tech media suddenly investigating the importance of high speed broadband, as if we've suddenly forgotten all that's come before due to the lack of it???).

    and i couldn't be more thrilled that the Govt have decided to finally draw a line in the sand that Telstra will no longer hold the monopoly they've had until now. it was despicable a decade ago that we were all duped into believing that selling Telstra with its copper network intact would somehow be good for competition, when in reality it's had a major chilling effect on competitive access & we've been paying for that copper all over again, when our parents & grandparents had already paid for it & owned it.

    but AU$43B ?!?!? holy trench-diggers batman. (and that's just the number now, god knows what's gonna happen to it over the next few years)

    voters now have to decide if $43B over 8 years could be better spent on more pressing matters, like water, unemployment, climate change, healthcare, education - you know, all the usual staples of the next election only 18 months away, which it close enough for a wiley opposition to turn public sentiment away from genuine but long-term considerations like broadband, onto more immediate matters that are actually pressing on voters minds.

    but so far all we've heard from Turnbull is waaa waaa waaa too much!!! too much!!! but not offer any reasoned alternatives...

    and, what do we do with the army of well-qualified 'New-Australian' trench-diggers we'll have at the end of it?
    (cuz that's where the lion's share of $43B worth of FTTH is going - into the ground. the $cost of the high-tech infrastructure intersecting all those lovely fibers is minor by comparison.)
  • You don't get it...

    FTTP to the nation is the right idea.

    It just took a lot of time, dicking around and money to get to it... Now that we know the government intends to cover the last 10% with what would appear to be... OPEL style service, we can safely say that if they had left Opel in place, the 10% would already have a decent service by now.

    Going to an exam and getting the answer right is all fine and well, but it helps if you don't take 18 months to complete the exam (oh, and you burned down the school in the process).
  • You know..

    .. the more I think about it, Jason, the more convinced I am you might be right.

    Well, either that, or we're giving KRudd and Conroy way, way too much credit and it's a lucky break they've caught onto just to save face, right?
  • Factual errors

    I noticed a few errors in this post. You claim that the government is having to put in an extra $38.3 billion but their investment will only be to 51% (possibly more) of the venture so the amount is more like $21 billion.

    You then state they promised 98% and are only delivering 90%. This is also untrue as the promise was for broadband of 12mps to 98% and this promise is still being met as the last 8% are being services with wireless and satellite of greater than 12mbps. It would have been the same for any of the other FTTN plans.
  • I don't understand the article either

    Seems more like a decision to take the negative side of a debate.

    Yeah, I wonder where the money will come from, but that, for me, was an existing question for the NBN.

    All I saw with the NBN were private companies lining up to screw over the Australian populace.

    I am actually glad it was terminated and a new proposal put in place
  • Reduce regulation is the answer

    From what you are saying the mobiles network had lots of investment due to lack or regulation

    ADSL v2 was turned on because the threat of the ACCC was abaited.

    Now the NBN will be built using govt money. Of course companies are going to join because there is minimum risk to thier investment $$s.

    When is the govt going to realise the biggest risk to investment is uncertainty and regulation.
  • Fast NBN $160 per month. NO THANKS.

    Fast broadband is important but so is everything else that makes our daily lives.

    Sure, the worlds fastest network would be nice but so would a decent rail service or better hospitals or better schools for our kids.

    In Brisbane we have a train service where a ramp must be put in place if a wheelchaired person wants to board. How about a world class train service Mr Rudd.

    Today the deficit is $22.5 billion, Mr Howard left a $20 billion surplus, thanks a billion Mr Rudd. What about something to help the Murray/Darling water.

    Mr Rudd's popularity will wane when the cash splash runs out of money, the unemployment is at record levels and Australia is broke.

    Then Telstra may be allowed to get on with giving Australians decent broadband for a reasonable price.
  • Re:Fast NBN $160 per month. NO THANKS.

    "Then Telstra may be allowed to get on with giving Australians decent broadband for a reasonable price."

    Had a look into their plans lately Syd?
    Their best offer is $150/mth for a lousy 60GB + $1 for every additional mailbox. (My household uses 9) So that would cost me $159/mth.

    Only problem is they haven't bothered to enable ADSL2+ in our local exchange & due to limited ports instead offered me a wireless service...only $130/mth for a whole 10GB!
    NO THANKS,!!! I'll stick with my present, slower $70/mth 200GB service (+44 FREE additional mailboxes) lol.
  • What?

    But Sydney, you were all in favour of this before Telstra were removed from the NBN rfp. Where did this civic concern come from? You want to fix your trains then talk with your Qld govt. Same with hospitals and schools.
    Even your beloved Telstra has praised the NBN outcome. Maybe its time you found another crusade?
  • @you know...

    Perhaps you are right Nic and I over analysed.

    Maybe they just landed on their feet, rofl?
  • Stand and deliver Amigos.

    Davo.... my concern is that the four amigos may have come up with the idea for the NBN process at coffee the day before the announcement.

    Now comes the serious business of explaining to the Australian people how the $43 billion will return them an adequate return on their investment.

    Read the Australian Financial Review (April 9-13) under the Editors heading "Canberra amigos stretch our broadband credulity". See Dave people are starting to question Mr Rudd and Co.