The missing piece from the Coalition's NBN plan

The missing piece from the Coalition's NBN plan

Summary: The man who claimed once that John Howard broke the nation's heart is about to take the NBN and embark on a Tin Man impression of his own.

SHARE:
TOPICS: NBN, Government AU
52

Malcolm Turnbull is currently engaged in one of the largest spectacles of cutting off the nose to spite the face that has been seen in public policy for quite some time.

In an environment where the government is beyond being "on the ropes", and is now grabbing desperately at the ropes to avoid toppling over, the opposition had an opportunity to disarm one of the few avenues of attack left in Labor's arsenal. But rather than seizing the opening to prevent any stinging Conrovian attacks from the current communications minister, it's as though the Liberal party cannot bring itself to land the killer blow.

When Tony Abbott and Malcolm Turnbull launched the Liberal's alternative National Broadband Network (NBN) policy, it clarified much of the thinking on how the party views the NBN. As would be expected from a party claiming fiscal responsibility, a Liberal-run NBN Co is a business that can deliver results and returns quickly and efficiently. This is borne out in the Coalition's policy document.

"Broadband policy should be about efficiently meeting community needs, not advocating for a particular technology," the policy says. "Networks should be upgraded in the most cost-effective way, using the best-matched technology."

And the Liberal policy follows these ideals; the rollout will be cheaper and occur quicker than the plan put forward by NBN Co.

Much of the Liberal policy and background document is spent arguing over the present value of the money needed for the NBN.

"Faced with growing use of bandwidth, but no apparent appetite among consumers to pay increased prices, companies makes choices about their optimal investment strategy, taking into account evolving technologies, willingness to pay, incremental deployment and operational costs, and the time value of money," states the Coalition's NBN background document.

It's the sort of that argument that one would expect from a merchant banker, and it is a valuable question worthy of being asked.

Until last week, the Liberals were even in the same order of magnitude as the services offered by NBN Co. For a country that is struggling to top an average broadband connection of 4.3Mbps, the Liberals' minimum of 50Mbps is comparable to a pricing structure from NBN Co, which at the time topped out at 100Mbps.

But on Friday, NBN Co announced that it would be able to offer 1Gbps plans by the end of 2013.

It would seem that a 1Gbps fibre-to-the-premises (FttP) NBN would be enough to make Turnbull's fibre-to-the-node (FttN) NBN look antiquated by comparison, but there is a key section in the Coalition's policy document that has the chance to save Turnbull's bacon:

Future upgrade path where NBN Co extends fibre beyond an exchange, but not to user premises (ie, deploys FttN) it will be required to plan and build in readiness for future upgrades that take fibre further into the field. All FttN designs must be upgradeable.

By saying that "all FttN designs must be upgradeable", the Coalition had offered the country a chance to have its cake and eat it too.

A likely 2013 incoming Coalition government could roll out an FttN network, reaching more of the population quicker than the alternative FttP was ever likely to, and for far less money than the approach of the current NBN Co plan.

But as NBN Co's top speed has increased, and Turnbull has had more air time to explain the Coalition's viewpoint, an outlook has formed that has a chance to keep Conroy and present NBN Co rollout in the game.

To fully disrobe the Conroy FttP emperor, all Turnbull had to state was that at a future date, an FttN-based NBN Co would look into making the transition to FttP only when it was economically viable or the need for such speeds increased.

There are plenty of supporting arguments for the Liberals to take this position. They get to cut billions of "wasteful Labor spending", which is right down the Liberal party's ideology, while still providing a massive hike to John Q Citizen's broadband, with the option of a potential future update at some unknown time.

Truly, it would be the embodiment of the "mixture of technologies" mantra that has dominated conservative telecommunication policies since the turn of the century.

But instead of this prudent, and eventually technically visionary, approach, Turnbull and Abbott are happy to run with quotes that 1Gbps is a "marketing gimmick", and that 25Mbps is "more than enough" for Australia.

It is hardly the language of an open and flexible incoming Liberal government — a government that is conservative in its approach and reacts to the needs and demands of the electorate.

For a party that espouses an intense dislike in governments "picking winners", Turnbull and Abbott are quick to pick out copper as the winner for the future of the last mile of NBN.

To pig headedly pick out copper as the medium of the last mile, simply because it is not what Conroy chose, is merely a case of arguing for the sake of it. It will neither help the country, the Liberal party, nor Mr Turnbull. It smacks of two kids arguing in the back of a car because they are bored.

For the man whose leader claimed he will go down in history as "Mr Broadband", Malcolm Turnbull is more likely to be remembered as "Mr Copper" than a man interested in delivering a world-class but cost-managed broadband solution.

To Turnbull's credit, he has managed to move the Coalition's policy from one of decommissioning the NBN to one that embraces what NBN Co has built, and will build for the next 12 months after an election, before embarking on an FttN build.

But as long as Turnbull does not commit to an eventual fibre build, Conroy knows he has one trump card left in his thin deck.

A glimmer of hope for Coalition fibre appeared on Friday, with Turnbull stating that if fibre costs were lower, a Coalition NBN may use more fibre.

"If the cost of fibre to the premises is considerably lower than what we've assumed, it might be that we could cost effectively do a larger percentage of the build as fibre to the premises," he said.

"We know fibre to the premises is the best technological solution, and if you can build it cost effectively, then you should do so. If we're able to build more of it cost effectively, then we would do so."

Add to that the comments made on the same day to ABC radio:

"And so while postponing investment until it's needed may seem a bit hard headed and sounding too much like a canny accountant than a visionary politician, it actually makes great sense, because if you postpone that investment until it's needed, the opportunity cost on the money that you haven't invested and that would have earned no return in that time, so you've got your investment in your pocket or doing something else. But also, when you do come to invest, you're using the latest technology, and that's a powerful argument to take a more steady and businesslike approach to it."

It is a very powerful argument — but until the potential final state of the Coalition NBN involves a government-funded piece of fibre heading into the vast majority of premises across the country, Labor will always be able to successfully argue that it has a plan that is an order of magnitude better than the Coalition's NBN.

To make that threat go away, all Turnbull has to do is say that one day in the future, FttP will eventually have a place.

Attach all the strings to it, put a fibre upgrade start date out to 2025, and make an argument about opportunity cost for the next decade — the important part is to acknowledge that it will happen.

Failure to do so may result in Turnbull being the man who thought that 50Mbps was enough for the nation.

That's not the legacy of an "internet pioneer", let alone a "Mr Broadband".

Topics: NBN, Government AU

About

Chris started his journalistic adventure in 2006 as the Editor of Builder AU after originally joining CBS as a programmer. After a Canadian sojourn, he returned in 2011 as the Editor of TechRepublic Australia, and is now the Australian Editor of ZDNet.

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

Talkback

52 comments
Log in or register to join the discussion
  • FTTH or FTTP

    Do the project once and do it right is the cheapest solution it does not make any sense at all to invest in a huge sunk cost for FTTN cabinets full of jumper boxes and batteries (this is last centuries technology) and the engineering solutions for a FTTN.
    The NBN co has already completed it's network/engineering design and is now laying out the system. It's going be much cheaper and quicker to just proceed with the current NBN, it's not building in obsolescence.
    The "It's cheaper to build FTTN" (means it's only cheaper for the likely term of the Abbott government) and is only true if FTTH/FTTP is never installed. If we start with an FTTN and the build out to FTTH/FTTP in the long run Australians are going to pay more as the sunk cost for the FTTN setup will have to be written off perhaps in 10 years.
    Abbott and the Coalition don't understand the mathematics of exponentials, at present internet growth rates of 13% pa means traffic will double in 5.3 years and in that 5.3 years total traffic will equal the total of internet traffic in all of history. Also the 13% exponential is also rising so the doubling time for traffic could well be under 4 years.
    In these circumstances ADSL/VDSL will not be sustainable as good service it's dependent on limited traffic, when the large majority of households have ADSL/VDSL systems then all begin to download/upload simultaneously say at 7.00pm the system will become dysfunctional.
    It's quite clear that Mr Abbott's very poor understanding of Mathematics (his road construction ambitions are a clear representation of this) is a major problem and it's a major problem with politicians generally.
    Kevin Cobley
    • Actually it does make sense

      Because it is cheaper; it solves a number of last mile issues plaguing NBNCo.

      "Labor will always be able to successfully argue that it has a plan that is an order of magnitude better than the Coalition's NBN."

      Great plan, but delivery has failed. Liberals simply point to the real-world results (laughing at the two "plans" so far); June 30 2013 premises passed figures will be hilarious:-)
      Richard Flude
      • interesting

        I have always asked myself, if Labor's plan technologically is better than the Coalitions, which they admit it is, and Labor is not great at implementing it (according to the Coalition), then why doesn't Mr Broadband come up with a better way of rolling out fibre to the premises and prove to us they can manage it better?
        Mark S-8ff5e
        • Why?

          "why doesn't Mr Broadband come up with a better way of rolling out fibre to the premises and prove to us they can manage it better?"

          The REASON the coalition can point at failings of Labor infrastructure initiatives is that Labor HAS infrastructure initiatives.

          Name ONE coalition infrastructure initiative in the last 50 years, just one.
          Goresh
          • why

            you'll be waiting a long time to hear about ONE decent infrastructure initiative in the last 50 years....
            radforms
          • What about...

            OPEL? Can say that was a coalition initiative... Cant say much more about it, but technically it answers the question :/
            Gav70
          • OPEL was a furphy

            Rudd examined the $6 billion Optus-Elders proposal. It was found to actually cost $11 billion and still not guarantee 6 Mbps universally.
            umbria
          • Opel

            did it get built?
            radforms
          • Yeah I know...

            Oh, I know OPEL wasnt worth the paper it was written on, just tossing it out there as an infrastructure program commenced under the Liberals.

            So technically, they HAVE done an infrastructure initiative, and the idea was actually a good one at the time. But as it all went downhill from there, to me its not a good sign for the Liberals when it comes to IT projects.

            If you look at their experience in the area (ie OPEL) then its not a promising sign for their idea to go ahead without problems.
            Gav70
      • Premises Passed Figures

        well the good ol NBN has rolled passed my place and ready to connect - even received a letter from the NBN co saying by 2014 will have to switch to it. Looked at the service providers on the NBN site that say they can connect me....one of which is my current ADSL provider....they say they cant connect me yet.

        Watching the build in my area, I think by the end of 2013 you will be surprised at the premises passed figures and they will actually start to catch up - in each block in the area they seemed to go through a "gearing up" phase and then within days massive chunks layed out. With new people laying new cable I'm betting that real soon they will be able to lay the cable in their sleep and at the moment we are still paying for a steep learning phase that will soon be over with.
        radforms
        • Same

          People seem to think that once the construction started date comes and goes, they should be seeing green cables being rolled up one street and down another the very next day. The bulk of the work for the rollout is the preparation to do that. The rollout itself for an area only takes a week or so, its getting the pipes and stuff capable that takes the most time.

          Then, once the cable's been rolled out, people expect to be able to connect the following day, ignoring the fine detail of getting the actual connection to the property, and a connection box installed. Its the fine detail that makes it take a year, but its the green cable that has become the symbol.
          Gav70
        • ACCC needs to respond now

          The ACCC has been asked by Telstra and NBN to modify its regulation to allow households which have been passed by fibre to be activated, without waiting for the entire FSAM to be completed.

          This is the same ACCC which took until 28 Feb 2012 to deliver its June 2011 approval of the Telstra deal.

          It is the same ACCC which caved in to lobbying by four fibre owners to arbitrarily increase the 14 POI plan that was good for competition, forcing an extra 107 Points of Interconnection, many of them adding cost for competitors to connect, and requiring a complete redo of the network routing by NBNCo, not to mention extra costs.

          If you want your fibre activated now, call the ACCC and tell them to get off their backsides.
          umbria
          • AND

            The same ACCC which is allowing Telstra to increase it's backhaul charges
            Abel Adamski
      • Where is the sense?

        "Because it is cheaper; it solves a number of last mile issues plaguing NBNCo."

        It will be cheaper to deploy if Telstra play nice and pretty much give them the copper cable. This new plan would need a new deal with Telstra in regards to getting access to the copper cable they want to use for the last mile. As the whole plan rests on having access to the copper cable Telstra could easily charge them a inflated price because there is no other choice.

        There is also the fact that it is only cheaper to setup. Maintaining the FTTN network will be much greater as they will need to maintain the already failing copper network until the upgrade to FTTN. Add this to the greater cos to running the FTTN network due to greater power requirements and many more cabinets of equipment that can fail. These cabinets will also become obsolete once the upgrade to FTTP happens, why build a network that you know you are just going to throw away the majority of the equipment in the not so far future?

        Yes the FTTP plan will cost more to start with but it will be cheaper to maintain and will not be needed to be upgraded any time soon.
        AxleAU
      • Pie in the sky promises

        That 25/50Kbps "minimum" promise will only ever be a wishful 'up to' speed.
        Most likely it's another of Abbott's none-core, heat of the moment, not written in blood electioneering.
        They don't even own the copper their 'Fibre To The No' service will rely upon after having sold it to Telstra which leaves Telstra in the driver's seat.
        The only way to improve service on our neglected copper that's presently struggling to supply audible phone calls & ADSL1 that's slightly faster than dial up here is via replacement, either run new copper or fibre.
        VDSL locks out competition due to noise so no choice of provider with that unproven hopeful.
        How is it cheaper short term to install 60,000+ redundant nodes, batteries, power supplies all subject to flooding & vandalism that require regular maintenance & become boat anchors once we upgrade to fibre.
        They screamed about FTTP being off budget yet that's OK when applied to their Fraudband alternative that will probably run at a loss due to the competition they promote in Metro areas & the subsidies required for rural.
        End result likely to be Telstra & Foxtel continue to dominate & gouge the public as we all pay a lot more for far lesser services than with FTTP.
        grump3
        • WHY NOT ADSL2+

          It can do up too 24 mbps, it satisfies the coalitions initial desire of 15.
          Yettie79
  • Intent

    The stated intent a la Tony is to complete the "NBN" by any means by 2016 and he has stated as soon as it is completed it will be sold. Thus preventing any scrutiny or judgement of the LNP and having scrambled the egg, what we will get is all we will realistically ever get for many decades, crippling Australia's future
    Abel Adamski
  • Fact Check

    http://www.businessspectator.com.au/article/2013/4/22/infrastructure/coalition-copper-will-fill-telstra%E2%80%99s-coffers
    Abel Adamski
  • Partisanship Is Not What I Expected From ZDNet

    What kind of political commentary is this? I was hoping for something a bit more even-handed. Is this what passes for such in Australia? I think you lot should be kicked off ZDNet.
    ldo17
    • What is biased?

      I thought it was a pretty even handed description of the state of play. What is the problem?
      Most I know, myself included, think FTTN is acceptable initially, though probably a little wasteful, if current usage expectations leave it obsolete too soon. But without a plan and costings for the enevitable upgrade, well, big thumbs down to the Coalition plan. Ad hoc upgrades are just not economically viable compared to a volume rollout.
      Pilfer-52cec