Turnbull plans faster, scaled back NBN

Turnbull plans faster, scaled back NBN

Summary: A future coalition government would provide vouchers to rural and regional residents to subsidise the high costs of broadband, and renegotiate the Telstra and Optus deals, with the aim of using Telstra's copper for areas of fibre to the node, Shadow Communications Minister Malcolm Turnbull has today revealed.

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A future coalition government would provide vouchers to rural and regional residents to subsidise the high costs of broadband, and renegotiate the Telstra and Optus deals, with the aim of using Telstra's copper for areas of fibre to the node, Shadow Communications Minister Malcolm Turnbull has today revealed.

Malcolm Turnbull

Alex Malley, CEO of CPA Australia, with Malcolm Turnbull
(Credit: Josh Taylor/ZDNet Australia)

Speaking at a Committee for Economic Development of Australia (CEDA) lunch in Sydney today, Turnbull said that the next election would see the Coalition promise to deliver fast broadband to the public quicker than the 2020 completion date of the Labor Government's National Broadband Network (NBN) roll-out.

"We will be able to say to people, particularly in the outer suburbs of our big cities and indeed in regional Australia ... we will get you ... very fast broadband more quickly than the NBN will be delivered," he said.

To achieve this, the Coalition would first task the Productivity Commission to find the best way to deliver broadband in a cost-effective manner. Turnbull said that he expected this to take around six months and result in a policy of a mix of fibre, copper and other technologies.

"You would probably almost certainly continue with fibre to the home in greenfields sites because the incremental cost of running fibre into every premises versus copper is not ... as big as it is in brownfields," he said. "In terms of the bulk of the brownfields, existing built-up areas in the cities, there are some areas where you would run fibre right out to the home, or certainly very close to the home. And they might be areas where the copper network is very old or where it's very wet."

"There are some areas where there is just a lot of water on the ground and the maintenance is very high. You've just got to take a pragmatic approach."

In areas where the copper is still viable, Turnbull said fibre would be brought out "further into the field" so that the length of copper between the fibre and the premise was sufficiently short for the premise to get high speeds.

"And the speeds you're talking about there are ... very adequate, more than adequate in fact for domestic applications. And I'm talking 50Mbps to 60Mbps downloads, 5Mbps to 10Mbps uploads," Turnbull said. "You will struggle to notice any difference because there are not applications that require very, very high speeds over fibre to the home."

Turnbull would seek to renegotiate the $11 billion deal with Telstra to decommission its copper and hybrid fibre-coaxial (HFC) networks, as well as the $800 million deal with Optus for its HFC network.

"The decommissioning of the HFC networks, or disallowing them to be used, is completely nuts. That is economic vandalism. These are networks that have many years of life in them," he said.

Turnbull admitted that this would be costly, with each deal having some form of payout clause if a future government backs out, but he said it would be cheaper in the long run.

"There will be costs associated with a change of plan, but they will be tiny compared to the savings that will be achieved," he said.

Telstra's wholesale copper network would remain structurally separated, he said.

"That customer access network would become a regulated utility ... which would be able to charge prices by permission of the regulator that enables it to get a reasonable return on its capital. Insofar as it could not deliver the broadband services required on commercial terms because of distance or the lack of density of population, then there should be a transparent subsidy from the budget."

This subsidy would either be a capital subsidy to the telco for the additional costs of servicing regional Australia or would be given out as vouchers to rural households.

"I'm in favour of the bush being subsidised — it has to be — but it should not be at the expense of more expensive broadband in the cities," he said.

A report released earlier this week by former Liberal Minister Peter Reith into the 2010 election found that the lack of a detailed broadband plan cost the Liberal Party votes in Tasmania, but Turnbull would not be drawn on the topic of his predecessor Tony Smith.

"I don't want to express an opinion on that. I think the NBN was clearly a policy that worked for the government at the last election, [but] I think as people are beginning to see the enormous cost and the disproportionate cost relative to the benefit and they're starting to question it more and more," he said.

"I just want to stress that we are absolutely passionately committed to all Australians having access to very fast broadband at an affordable price. The point of difference between us and the Labor Party is how you go about it and we believe there is a faster and more cost-effective way of doing it and one which will actually result in cheaper broadband."

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

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Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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54 comments
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  • OMG Malcolm's plan seems a bit light on with detail for proper evaluation. Let's hope the expert big guns of the industry give us some indication of their pro's and con's on the Malcolm plan.
    sydneyla
    • Good point. Yes, the "plan" is sprinkled with platitudes like so much fairy dust.

      I too await the industry plaudits for Turnbull's visionary scheme... *crickets*.

      Never mind Telstra - David Thodey has just signed a deal with the Govt and will keep smiling his Cheshire Cat smile until the election. Optus on the other hand... Maha Krishnapillai has been an outspoken advocate for the ability of the NBN to "level the playing field" - something Turnbull's plan seems to overlook.

      And oh yes... Turnbull's plan seems to devote an unusual amount of attention to the sorry plight of Optus cable - something that Optus is only too eager to get off their hands. Can anyone imagine how Optus would react to being told - "sorry, now you have to keep the cable - and by the way, it's the centrepiece of our plan to offer competition at high speeds on existing infrastructure". You would have to bribe them _even more_ just to make it worth their while keeping it going than the Govt is paying now to shut it down.

      Oh, and has anyone seen an Optus cable broadband advertisement lately? No? Except for the one that netted them a $5 million fine for making claims that the cable COULDN'T EVEN DELIVER???

      And the other major players - I can't wait to hear how they are DYING to keep forking over money to Telstra (and in a few cases, Optus) to keep their business model alive.
      Gwyntaglaw
      • Gwyntaglaw

        ***Oh, and has anyone seen an Optus cable broadband advertisement lately? No? Except for the one that netted them a $5 million fine for making claims that the cable COULDN'T EVEN DELIVER???***

        Now, Optus were fined for not revealing that a customers usage was split into on and off peak times and will be shaped to 64Kbps once the "On" peak limit was reached. Optus actually provides the fastest speeds on its cable network at this present time, offering speeds upto 107Mbps on premium speed service. Many customers like myself are achieving speeds of 70-90Mbps. So make comments when your are better informed about what Optus' HFC network is or is not capable of!
        Nato44
  • Yep, I was right again. Coalition are still playing catch-up. Interesting to note three things 1. Continuing fibre in new housing sites. Which begs the question what is the point of doing this if there was never any intention of rolling out fibre to the rest of Australia. 2. Turnbulls definition of adequate and what he considers "more than adequate" apparently that is supposed to be adequate for every one now and in the future just because he say so. 3. Applications, his argument here is that there are no applications that make use of that speed so the FTTH network should not be built, completely disregarding the future again but it brings up that poignant point again if that IS the case then why are new houses getting fibre? According to him "5mbps to 10mbps" uploads is "adequate" (btw there are already applications that would benefit from upload speeds greater than that and we would notice the difference so he is just talking out of his **** once again.)
    Hubert Cumberdale
    • if you read the article he is saying NEW home estates lay fibre as it is comparable as with a new estate their is no cable already in the ground theirfore whether you chose copper or fibre you are laying from scratch and cost between 2 can be compared. where as the Current NBN involves ripping up the copper network that is already in place. Some of the copper network (ok i concede a fair amount) is damaged and needs replacing and he is saying where the cable is damaged then replace it with fibre but why spend money ripping up perfectly good working copper network and spend money replacing it with new fibre for the sake of it. I have no problem with laying Fibre to the Pillars/Cabinets etc but in a residential build up where you have maybe 100 meters between the pillar and the customers site why spend money ripping up working copper cable to replace it with fibre when for home users they wont notice the difference (except high end WOW gamers etc where frag rates may be slightly different) and why should the tax payer pay to run fibre optic to houses so teenagers can get higher WOW scores and download movies a little bit faster

      I agree fibre needs to be run to large businesses and schools hospitals etc but i work in the Telecommunications industry and as far as im aware ALL hospitals if not the far Majority of hospitals already have Fibre to the premises as does most schools and large businesses. Those who dont fair enough run fibre but i just dont see the value in spending many millions of dollars running fibre to every house even to houses like a lot of people who do NOT want cable tv OR high speed internet but just want a basic PSTN line. Sure they have made it so PSTN phones can connect to the Fibre however bit over overkill to spend $1000's of dollars per customer to customers who only want a single analogue telephone.

      Also this will currently impact majorly on medical priority services as currently Telstra provides power to phone lines down the copper cable this power is provided by the Telstra exchange so as long as you have a normal phone plugged into the phone socket in the wall if you have a power outage you will continue to have phones. NBN will have to provide battery backups to every customer (more money) and these last for approx 6 hours which for a normal black out or brown out no problem but in cases of natural disasters their is no contingency to be able to keep serviecs up9 beyond sending more battery backups and to bad if customer is isolated and cant get to them

      Telstra exchanges ALL have battery backups and diesal generators in them so if mains power fails they auto kick in and keep exchanges running. Technicians are then dispatched to the exchanges to patrol and make sure their is plenty of diesel in the generators which keeps emergancy services, and medical priority customers working for example in the QLD Floods Telstra technicians were flown by Military Blackhawk Helicopters to exchanges and SES boated technians to exchanges to keep them running and where generators did fail or were just runnhing off batterys helicopters were used to ferry in replacement generators, This went on for weeks something the current NBN model has no contingency or plans for beyond "we will work it out when it happens but doesnt happen much so doesnt matter" though if the climate change argument is to be believed with more cyclones flooding and fires could happen quite a lot more
      Brumby-5254e
      • "and why should the tax payer pay to run fibre optic to houses so teenagers can get higher WOW scores and download movies a little bit faster"

        You just happen to forget the big question - future needs.

        In this last ~ decade we have gone from dial-up to ADSL2+/Cable speeds. A dramatic improvement of speeds in the orders of magnitudes.

        How could one possibly think that 60Mbps is going to be adequate in anything other than the extreme short term?
        NPSF3000
        • I recall in 2001'ish, my mate had Optus cable, and well it was offered at 8Mbps, unlimited. And well docsis 2.0 couldve made it faster but did they do it?

          I think we all remember that, and how great it was. Suffice to say that back then most people were still on dialip or ADSL1 at 256Kbps, and quotas were around 1GigByte/month?

          At the same time, Telstra had an ADSL network, many of the DSLAMS were capable of ADSL2 speeds, I think it was around 18Mbps, before ADSL2+.

          Most people were on dialup or ADSL1, the majority was 256-512Kbps...

          the same is true for 100Mbps or 1Gbps FTTP....
          ADFSAFSAF
      • Your first argument negates your later one. If FTTN is implemented, then the backup batteries and generators at exchanges are useless because the fibre run out to the nodes/cabinets would not carry power. The cabinets themselves would need to be powered and each have their own backup systems.

        Other issues with your response:

        Particularly in outer-suburban and regional areas, it's quite common for homes to be 200m or more apart. I'm only an hour form Sydney, yet homes just up the road from me are about 300m apart. FTTN achieves almost nothing in these cases in either cost savings or speed. To achieve a decent speed from VSDL2-based FTTN means a copper loop of
        AustImages
      • Don't know what happened to the rest of my reply, but here it is again:


        ...FTTN achieves almost nothing in these cases in either cost savings or speed. To achieve a decent speed from VSDL2-based FTTN means a copper loop of
        AustImages
      • One more time...
        To achieve a decent speed from VSDL2-based FTTN means a copper loop of less than 300m. So that would mean a node cabinet for every 2 houses in this area. I suggest that it would actually be cheaper to deploy FTTP in such areas than it would be to do FTTN.

        Many small businesses are run from homes or small complexes outside CBDs. SMEs have traditionally missed out on decent communications infrastructure because of cost and the NBN finally allows that to change. No longer is a fast fibre connection only possible for big business in an NBN world.

        You ignore the future. Bandwidth demand has a very strong historic growth rate, which is showing no sign of falling. We don't design roads only to cope with current demand, and it's just as ridiculous to design a network on current needs when we know they will continue to grow.

        Finally, the biggest flaw in your argument is that taxpayers aren't footing the bill for the NBN. They are investing in it, and that investment (including the interest) will be repaid by the users of the network. Big users like businesses and movie downloaders etc will be paying more than their share, helping to subsidise the average users.
        AustImages
      • "if you read the article he is saying NEW home estates lay fibre as it is comparable as with a new estate their is no cable already in the ground theirfore whether you chose copper or fibre you are laying from scratch and cost between 2 can be compared."

        Wow, it's almost as if you completely missed the point of my post...




        "where as the Current NBN involves ripping up the copper network that is already in place."

        Boo hooo hoo, the poor copper :-(




        "why spend money"

        Why do anything? Hint: progress, fibre is the future not copper. The very fact that anyone says new houses should get fibre is proof of this, so why connect them to fibre? In the future people will need even higher speeds. The rest of the network will have to be upgraded to fibre eventually. So when do you do that? In 10 years? In 20 years? 50 years?




        "perfectly good working copper network"

        LOL




        "replacing it with new fibre for the sake of it."

        Why lay fibre to new houses just for the sake of it? Are you getting this yet? Without everyone connecting at comparable speeds the network as a whole has less value, In theory I could get a 800tbps connection but if everyone else only has 1kbps it is pretty useless right, so you are suggesting that we lay fibre to these new houses and then not let them take full advantage of the connection because the rest of the network is a patchwork mess.



        "home users they wont notice the difference"

        LOL




        "why should the tax payer pay"

        The tax payers will be payed back.




        "why should the tax payer pay to run fibre optic to houses"

        Why run fibre optic to new houses then?




        "teenagers can get higher WOW scores and download movies a little bit faster"

        Is this what you think the internet is all about? Stick to dial-up grandma.
        Hubert Cumberdale
  • "To achieve this, the Coalition would first task the Productivity Commission to find the best way to deliver broadband in a cost-effective manner. Turnbull said that he expected this to take around six months and result in a policy of a mix of fibre, copper and other technologies."

    This suggests to me that Turnbull still hasn't got a clue how to achieve his goal which is basically finishing broadband before the NBN will be finished, but which might not be the best goal for Australia.
    CUFCfan616
    • "...the Coalition would first task the Productivity Commission to find the best way to deliver broadband in a cost-effective manner. Turnbull said that he expected this to take around six months and result in a policy of a mix of fibre, copper and other technologies."

      Got that, Productivity Commission? You clear now on what you are expected to find? :)

      It's the first law of government - if you commission an independent report, you frame the terms of reference verrrrry carrefffuuullllly to make sure you get the result you are after.
      Gwyntaglaw
      • From what I can read out of this, if Malcolm is opting for FTTN, I do not see why he would continue to include HFC (Telstra, Optus) as part of this plan, unless it is to migrate the customers off it onto FTTN. The FTTN would make the HFC superflous, or if the operators continue to run it, may become unprofitable.

        Perhaps Malcolm is using this as a backup plan, in case after elected, his FTTN fails to materialise, he can still claim that upgrading HFC will provide 100Mbps, and a 'mixture' of greenfields FTTP, and wireless LTE technology?

        Nice to have a escape plan I think. But as i said, it would be tough to 1) sell a $4bn FTTN plan but have to compensate Telstra $11Bn 2) to build a FTTN without Telstra ... so what has Malcolm got to work with? not much.

        NBNCo has already played the FTTP card, so he cannot adopt their policy into the election, so his options are limited, he might fall back into this mixture of technology, and we will just be propelled back to 2005.
        ADFSAFSAF
  • The NBN seems to be the *slowest* broadband network in the world. At least in terms of rollout rate!

    To do 10M premises in 10 years they need to activate about 500 services each working hour. So far they have delivered about two hours of outputs. In a few months more they will have delivered about a day of "on schedule" output.

    When I post this a bunch of people will attack me saying "I just don't understand telecommunications" or "Ignore this NBN hater". I'm not a NBN hater - I love the idea. I do understand telecommunications projects.

    The public needs to demand a sense of urgency from NBNCo. NBNCo management needs to demonstrate that they can ramp up to the delivery rates required by a project of this size.
    Pragmatic-3e05f
    • It's not that you don't understand communications, it's that you don't understand the "schedule".

      The "rollout" is at a snails pace at the moment because places that are getting the NBN at present are still essentially test sites. They have been selected for their varied geography and population densities to provide NBNCo with a better understanding of how long proper rollouts will take in each scenario so they can chart a more accurate course for the rest of the rollout in terms of pace and worker distribution.

      Once that phase is over and the actual rollout begins, you'll start to see the pace pick up.
      anonymous
      • And one should note that this ramp up is planned to happen before the next election, so the voters will then have to choose between a ramped up project with hundreds of thousands maybe a million connections, vs a project that is simply to stop the other project and see if you can do something different.
        NPSF3000
    • The reasons behind the (initially) slow ramp-up have been discussed at some length, but they boil down to a few points.

      The first, and most frequently stated reason, is the absolutely essential role that the Telstra deal has played. The ability to use Telstra's existing pits, pipes and other infrastructure will result in real savings of billions, as well as time. Just think about it: the costs and time involved in digging up whole streets, laying new pipes and pits and so forth, versus being able to run through all the existing structures that are already there, minimal disruptions, digging, road closures, heavy equipment etc.

      Secondly, the building of the NBN is on a vast scale. You can do it as a rush job (expensive) or as a proper efficient job. We saw the failings of the former approach with the BER and pink batts episodes - necessary in a way, because of the need to expend stimulus funds as quickly as possible to bring economic benefits, but still with some (note: some) negative consequences. The people running the show at NBN Co understand this, and are using industry best practice to do it right, train staff, get the best price (not just the quickest price) for labour costs, and get it happening in an orderly fashion.

      Thirdly, the corporate plan lays all this out - it is clear that what NBN Co calls the "volume" rollout will begin in 2012-13; that is, the ramped-up full scale deployment of staff and resources at maximum speed and efficiency. This is how it works. You can't just flip a switch, snap your fingers or whatever, and expect it to work overnight. The Telstra deal has delayed the start of the volume rollout; unfortunately, but unavoidably. But now it's in place, things are moving forward apace.

      Fast forward two years: in July 2013, likely to be on the eve of a Federal election, we will have NBN Co rolling out at maximum speed and efficiency. By that point, around 12-14% of Australian homes will have been passed by the NBN fibre network (ready for connection). Every major city will have at least some suburbs or areas covered. There will be many regional centres that have significant deployment (just as Armidale, Coffs Harbour, Townsville and Geraldton are getting now). Tasmania, a special case because of its early start, will have around 25-30% of its homes passed by fibre, including chunks of Hobart, Launceston and many other centres.

      And that will be the time when the major parties are up to their necks in roll-outs, announcements, claim and counter-claim. What will Labor do? Operating at full speed, there won't be a work start or announcement of fibre rollout without a local Labor candidate (not to mention Senator Conroy) trumpeting the fact to high heaven. Regional centres that don't have fibre rolled out at that point will be looking with envious eyes at their nearby towns that DO have it. Residents of suburbs with NBN fibre will be eyeing off the very real impact on their house prices (you'll be seeing it on real estate adversting by then - "NBN connected!"). And residents of neighbouring suburbs will be clamouring for the "unfair" improvement in property values, asking when they will get it too. And even more than the publicity machine, word of mouth will mean that most people without NBN fibre will know someone - a friend, relative or colleague - who has the NBN connected. Don't underestimate the power of "me-too!"

      And if I were advising the Labor Party, the election eve would be a great time to announce the NEXT round of rollout sites, which would not be due to start until after the 2013 election. Want to lock in your NBN fibre? Then you have a tangible, even selfish reason to vote ALP, because Tony Abbott will stop the rollout dead cold! Or so the spruiking will go (not without reason).

      But just take this as a starting point - if a Coalition government is elected in 2013 (a strong likelihood, in any event), what will they do with this lean, efficient rollout machine? I mean, never mind the carping and carrying on about "waste!" and "what about the flower beds?" An incoming government would have to sit down with the advisers, the facts, the figures, and decide what they will actually DO. One course, certainly, would be to stop the rollout cold - tools down, everyone. It would be like pulling the plug on a factory assembly line running at full production. All that momentum, all those skilled staff producing output at top efficiency, suddenly thrown away. And then call in the "experts" to run the slide rule over things.

      They could do this, but it would be unlikely. More likely would be a slow-down; complete existing orders, but stop preparation of new sites. And then would come the tedious commissioning of reports, studies, whatever; accompanied by the usual horrified rhetoric about how bad things were, they never realised the cupboard was so bare, etc etc.

      For Turnbull to cast his policy now in terms of speedy rollout makes sense - for most people, now, the NBN fibre rollout is a mere pipe-dream, happening in far-off odd towns in very small numbers. But in mid 2013, that will no longer be the case. The NBN will be visible, and real. New sites will be coming online all the time. The "it's going nowhere" argument won't be quite as tenable. Turnbull will need to recast his policy quite a bit.

      And as I've said repeatedly, I wouldn't get between a National Party MP and a bucket of money - especially when it means preferential modern infrastructure for their bush electorate.

      It's going to be an interesting two years ahead.
      Gwyntaglaw
      • Ahem - maybe you would have been more accurate if you said '...get between any politician and a bucket of money...".

        More seriously, Turnbull's reported policy is sounding stranger and stranger. He talks now about delivering very high speed broadband, then goes on to say they would use a tech shandy of existing CAN, HFC, FTTN, and wireless in place of the NBN fibre rollout.

        A fair question then seems to be: does he have any idea what he is talking about?
        gnome-8be8a
    • They can't start until the deal with Telstra is ratified by the shareholders and the ACCC. So, in racing terms, they are entering the starting gates but the race has yet to start!
      www.SeeknBuy.com.au