Turnbull turns to NZ for broadband policy

Turnbull turns to NZ for broadband policy

Summary: Speaking at the National Press Club today, Malcolm Turnbull has outlined details of the Coalition's broadband policy to combat Labor's National Broadband Network (NBN) policy, with a separated Telstra set to take pole position in the plan.

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Speaking at the National Press Club today, Malcolm Turnbull has outlined details of the Coalition's broadband policy to combat Labor's National Broadband Network (NBN) policy, with a separated Telstra set to take pole position in the plan.

Turnbull held up New Zealand's ultra-fast broadband (UFB) network as a poster child for how things should be done, saying that although we might manage to beat the country in the upcoming Rugby World Cup, we are already beat on broadband.

Australia would, at 2021, have invested $5900 for each of the households forecast to have a service on the NBN, and $3800 for those to be physically connected, Turnbull said.

He compared this to NZ$1.5 billion New Zealand network, which will see a Fibre to the Home (FttH) network rolled out to 75 per cent of the country's population, with another 18 per cent to receive Fibre to the Node (FttN) and the remaining 7 per cent to receive satellite and wireless broadband. This amounted to $500 per FTTH household, and $800 per head for the rest.

NZ's fibre would be rolled out by the private sector, consisting of electricity distribution companies and Telecom New Zealand's structurally separated network arm, Chorus. Telecom New Zealand split Chorus so that it could be eligible to receive government funding to roll out New Zealand's network.

It is this private sector-led model that Turnbull wants to follow in Australia.

Turnbull reiterated previous comments that the first step for a new Coalition government would be to seek advice from the Productivity Commission on how to achieve fast broadband quickly and in the most cost-efficient manner. He said that the details of the Coalition's plan would depend heavily on where the NBN was when the Coalition won power, as well as contractual and legal constraints that had been put in place.

However, with broad brush strokes he was able to outline the Coalition's strategic direction for broadband.

In urban areas, the Coalition would seek to have Telstra and Optus' hybrid-fibre coaxial networks upgraded, pointing to NBN Co's corporate plan, which he said acknowledged that HFC node splitting would increase speeds on the network to 240Mbps downstream and 12Mbps upstream, and could be completed by 2013.

This would cut costs dramatically, as he said: "the melancholy truth is that more than 75 per cent of the cost of this network is civil works", so "plainly, if you can use some of the existing fixed-line local access network, you can reduce those civil works considerably".

The Australians that would have been covered by wireless or satellite would see very similar services, according to Turnbull, who said that the Coalition and Labor technology approaches were "very similar" for those people.

Infrastructure, which had already been deployed in regional and rural areas, would be made available to private sector wholesale network operators, which would complete and operate services using those assets, according to Turnbull.

For those not in reach of HFC, or not considered to be so regional as to be serviced by fixed wireless and satellite, the Coalition would invite private sector companies to deliver broadband, with non-economically viable areas to receive government support, in the form of co-investment, capital subsidy or capital and recurrent subsidies.

The Coalition would look to ensure that Australians in designated areas had at least 12Mbps within 12 months if possible, and 24Mbps within 48 months, not specifying how that would be achieved.

"The speed and extent of the upgrade would be a very material factor in determining the nature of the government's contribution," Turnbull said.

Greenfield sites would receive FttH, since this wouldn't cost much more than copper or HFC, he said. If the companies decided to roll out FttN, they would be encouraged to do it in a way that "facilitates a future upgrade to FttH", Turnbull said.

Turnbull acknowledged that Telstra would be the obvious front runner for much of the construction, but said that if it wanted the work, it would have to separate its customer access network from the part of the business doing the roll-out.

Turnbull said that the Coalition would prefer it if Telstra was split into separate companies as in New Zealand, but that "other models are possible", adding that "it is up to Telstra to make the case for why they better serve both the public interest and that of its shareholders".

Such a separated "Network Co" would have Telstra exchanges, its copper and its HFC, he said. NBN Co assets would also be transferred to the separated company, perhaps in return for NBN Co holding stock in the company.

Regulatory safeguards would be put into place to ensure that wholesale carriers would charge the prices required for a reasonable return on their asset base.

Turnbull believed that structural separation would be "value accretive" to Telstra shareholders, quoting the oft-used phrase that "the sum of the parts is more valuable than the whole", and pointing out that it would reduce the costs of dealing with regulators.

"The only people certain to lose from such a restructure would be the legal profession," he said.

This path would cost less, Turnbull said, adding that urban Australia could be completed via an FttN roll-out and HFC upgrade, which he estimated to cost $10 billion, although he didn't say the government would pay this, as much of it would be commercially viable. Turnbull pointed to Telecom NZ's FttN roll-out to 1.5 million New Zealanders, which he placed at $500 million.

When asked about further costing information, Turnbull said that it was impossible to provide it, given that he didn't know what the situation would be in 2013 when the next election is set to be held.

He said that it made sense, instead of speculating, to state the party's direction, principles and philosophy, which is to "recover as much value as possible; as many cents in the dollar for tax payers as [it] possibly can".

"Exactly how that plays out, we'll have to see exactly what the status is," he said.

He pooh poohed objections in advance that Telstra wouldn't play ball, saying that Telstra would recognise that the Coalition's plan would bring shareholders value. He also said that any company would be able to participate, which should force Telstra to act or risk losing out to competitors. He also scorned objections that such a plan wouldn't be future-proofing Australia's broadband future, saying that applications requiring 100Mbps didn't exist. To the objection that the Coalition's plan would spawn a patchwork network, he said that any network that involves more than one technology will be patchwork.

Topics: Government, Broadband, Government AU, NBN

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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Talkback

19 comments
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  • Wow, 12mbps upstream by 2013? Then what? 24mbps upstream in 2113? Try harder Turnbull.
    Hubert Cumberdale
  • Yes let’s opt for the oppositions cheaper BS, NBN, since the internet “only contributed” $50B/3.6% of GDP last year, and is growing…

    http://www.abc.net.au/news/2011-08-03/australian-digital-economy-tops-50b/2822196?section=business
    Rizz-cd230
  • Sounds like a good strong plan, it's quite simple that historically the best service has always been delivered through competition - not central government dictation.

    This plan should work well to enable proper competition in the telecommunications network, without the government unnecessarily wasting billions on a network that nobody needs and few will actually use.
    Matt51-6e0fd
    • The NBN plans to address (among other things) the medium and long term telecommunication infrastructure needs of Australia.

      The Coalition policy only looks at the short term.
      redrover-fac06
  • The government should buy all the farms and grow all the food, this will ensure that grocery prices are kept level. Of course they will have to buy the supermarkets as well. But that will only be to our benefit, since having a duolopoly is creating unnecessary costs, monopolies are the only way to drive down costs to the efficiency of having everything planned centrally by geniuses in Canberra.

    Also, there are people going around in wheelchairs because they can't walk. That's a bit sad for them. Can't we have the government break everyone's legs so that everyone has to go around in a wheelchair? Then the people who really need to be in the wheelchairs won't feel so sad!

    It is also woefully apparent that some people are living longer than others. For instance, one person might live to an age of 90, while another might die at 76. This is completely wrong! Why should the 90 year old get 14 extra years of pension! Everyone should be given a set life span of say 78 years and killed on their 78th birthday.
    coolguy4
    • Very good. But I liked it better when it was Swift's [I]A Modest Proposal[/I].
      Gwyntaglaw
      • [WHOOPS]HTML Fail[/WHOOPS]
        Gwyntaglaw
    • foolguy4 sadly you don't seem to understand the difference between infrastructure and a product/service. Your whole post is an unmitigated disaster, suggest you rethink it and come back when you can present a valid comment on this topic.
      Hubert Cumberdale
      • It's true, one man's service/product is another man's infrastructure.
        coolguy4
        • Yes, isn't the circle of life great? I'm sure once the cogs start turning you'll eventually figure it out.. or not... "bu bu bu bu the government should buy farms and food bo bo bo bo wheelchairs blah blah blah I'm a drama queen yay!"
          Hubert Cumberdale
          • HC... seems my old sparring partner coolguy4 has thrown his "ring into the hat"...LOL for challenger to stupidest comment ever?

            Whaddyareckon, his or the immortal "before there were roads there were no roads"?
            Rizz-cd230
          • LOL I wish we could vote on this in a poll... wait, maybe we can over at the forum on Delimiter :-)
            Hubert Cumberdale
          • Nah, I'm in trouble over there...LOL.

            Seems Mr. Small l Liberal, doesn't like me poking fun at a few big L Liberal posters.

            Gee I am a swinging voter and hate all politicians, but those far right **** really take themselves and their cult like ideologies seriously...hence I play with them accordingly and they bite, LOL

            But oh of course it's ok for them to completely say as they wish, though...LOL!
            Rizz-cd230
  • If the Coalition, some how miraculously win the next election (god help us if they do) then this is what will happen:

    1) Turnbull will ask the Productivity Commission to do their report, they will go to the pub for a pissup (I suspect black jack, cocaine and hookers will be involved too), then the day before the report is due who ever is the least hungover will printout a copy of of RFC 2549: http://www.faqs.org/rfcs/rfc2549.html and hand it to Turnbull.

    2) Turnbull's next announcement will be that he has changed his mind again and that he is going to implement a wireless network using carrier pigeons because everything else is too expensive. Folks in the bush will get free aviaries and people in cities will get a 50% discount voucher for Bunnings to go towards a new aviary.
    Jingles-8366c
    • LOL, Jingles...

      Well even as a staunch NBN supporter, you've convinced me... I hope the coalition win.. AS LONG AS I CAN GO TO "THAT" PARTY... otherwise...nah!
      Rizz-cd230
  • The problem is, Mr Turnbull, that New Zealand is the size of Victoria. How do you expect to deliver a Australia's infrastructure for 10 billion? By cutting the speed to 24mbps which upwards of 30% of users can already get through adsl2! Not only does Turnbull need to go back to school to learn maths and geography, he needs to grow a brain.
    turnbull_is_wrong
  • @ Matt51. You missed the whole point.
    1. Turnbull & Abbot voted against splitting Telstra in 2, like NZ did and other countries have done. So for Turnbull to say its good now makes him a bigger fool than Abbot. So to get any sort of split, the Gov't paid Telstra 11 Billion for them to give up copper network, once NBN is finished.
    2. As for Abbots WiFi NBN setup, you need to have a phone tower on every street corner to get same coverage. Then the cost of maintaining these towers will outweigh the cost to build them.
    Mudrat63
    • Thank you!
      Someone else mentioned the problem with wireless. I thought I was the only one to read that article!
      cookie_42
  • Thought I should mention - if you haven't had a chance to read David Havyatt's article over at itnews.com.au, it is very well worth a read:

    http://www.itnews.com.au/News/265868,nbn-the-blowhole-and-other-political-analogies.aspx

    Havyatt expertly dismantles the basis of Turnbull's policy, and makes the point clearly and succinctly that the proposal winds back the clock to Labor's own 2007 policy - and repeats, for the benefit of anyone who has forgotten, exactly why that policy was found seriously wanting.
    Gwyntaglaw