Turnbull’s NBN contention contention is out of contention

Turnbull’s NBN contention contention is out of contention

Summary: This week's Turnbull-Albanese debate on ABC's Lateline shows both parties are still up to their usual political tricks when it comes to the NBN. But will this approach convince swing voters – or alienate them?

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It must be a source of agonising frustration for Malcolm Turnbull to watch Tony Abbott – the man who stole his job years ago – making a bumbling play for the PM’s chair by kissing random women, garnering global fame for embarrassing word confusion making insensitive remarks about gay marriage and demeaning his own party’s candidates.

Like a real-life Cam Brady, Abbott continues to test the boundaries of acceptable political behaviour – and there is still the better part of a month left in this campaign.

Turnbull-Albanese
Back to school: Turnbull played the numbers while Albanese played it safe. Screen capture: David Braue/ZDNet

Meanwhile, the much better-behaved Turnbull is stuck arguing his party’s NBN policy for the umpteenth time, most recently on a Lateline appearance in which the experienced politico was repeatedly schooled by mediator Emma Alberici as he rolled out the same well-worn arguments against Labor’s plan.

What was most interesting in that debate, however, was not what Turnbull said about his party’s policy – or, for that matter, how Albanese responded. No, the most interesting takeaway was what Turnbull said – or, I if I may use the technically correct phrase, “made up” – about the current NBN rollout.

“The reality is that if you want to have a guaranteed 1Gbps service your retail service provider will have to buy 1Gbps of CVC for you, and that is going to cost $20,000 a month,” Turnbull pushed back moments after making the rather daring claim that Albanese “doesn’t understand how this thing is priced”.

“That’s a fact for any household,” Turnbull fabricated – either because he was on a roll and forgot himself, or because he was desperate to press his point about Albanese's incompetence – “Which is why nobody will buy it other than businesses that need a very big pipe.”

The experienced Turnbull was repeatedly schooled by mediator Emma Alberici as he rolled out the same well-worn arguments against Labor’s plan.

Given that many businesses can already buy 1Gbps fibre services for far less than $20,000 a month, even Turnbull would have known he was stretching the truth. But with a commendably fierce Alberici already at her technical depth and Albanese too focused on staying on-message to argue the nuances of what Turnbull was saying, the opposition spokesperson slipped that one past the keeper: Albarici was visibly surprised but the opportunity to nip Turnbull's contention in the bud was lost.

The problem with his statement, of course, is that Labor is not offering “guaranteed” 1Gbps services – in the sense that they will run at 1Gbps all the time – just like the Coalition's 25Mbps or 50Mbps services will run at 25Mbps or 50Mbps all the time. For that matter, Telstra too does not offer “guaranteed” 24Mbps services over its existing ADSL infrastructure – which not only does not carry 24Mbps of traffic all the time, but does not run anywhere 24Mbps for the majority of customers.

High-end telco customers speak of these speeds in terms of committed information rate (CIR), which can be delivered by commercial operators by using quality-of-service controls to carve out capacity from much higher-capacity networks. However, the NBN isn't designed that way: every speed in the debate is a peak speeds rather than a CIR, and Turnbull knows this as well as anyone else.

He also knows that no RSP is going to buy a single 1Gpbs circuit for a home customer whose Internet service will likely be idle through 98% of the day. Instead, those RSPs will buy a 1Gbps circuit for, say, 200 premises (feel free to substitute your own numbers below as the maths will of course vary somewhat) – knowing they can manage contention for that circuit and share it between many properties whose consumption fluctuates throughout the day.

Debates like the one on Lateline are designed to help inform voters and sway opinions – but when facts are stretched and manipulated, they do little but to drag fear, uncertainty and doubt out of the gutter, give them a shower and a shave, and dress them up in the respectability of a dinner suit.

In that way, the CVC cost will be factored into the service charge at $100 per month. Add this to the wholesale charges of $150 per month – which, for some strange reason, Albanese did not state even though it was clearly declared when the 1Gbps upgrade was announced in April – and you get a wholesale cost of around $250. Even with a comfortable margin added, RSPs could comfortably offer a 1Gbps/400Mbps NBN service at a $399 price tag, before value-adds.

What Turnbull will not admit is that most businesses would jump at the chance to get this type of speed at this price, to even several of their branch offices; current 1Gbps services are only available in certain areas and at five to ten times the price.

For smaller businesses and average homeowners who find $399 a month too pricey, there are many, many slower NBN plans that will suit their needs perfectly well. Just because many homeowners will be content with a 25Mbps or 50Mbps NBN service doesn’t make the project any less valuable: as Albanese intimated, they will still be participating in a competitive, level-playing-field market that is putatively free of interference from Telstra.

Debates like the one on Lateline are designed to help inform voters and sway opinions – but when facts are stretched and manipulated, they do little but to drag fear, uncertainty and doubt out of the gutter, give them a shower and a shave, and dress them up in the respectability of a dinner suit.

Ultimately, it appears, this is what the Coalition’s election campaign will be about: discrediting Labor’s plan not on its hit-and-miss performance to date, but arguing simply that the Coalition will do the NBN better.

In other words, more of the same. Whether or not this will convince any of the swing voters Turnbull is targeting, will become clear in a month – but let’s hope that both Turnbull and Albanese can focus on the facts a bit more for the next few weeks, if only to clarify the argument for non-technical voters wondering why either party is pushing for an NBN at all.

What do you think? Is an election-mode Turnbull burying his FUD behind a patina of assumed legitimacy? Or did he come off strongly on the night?

Topics: NBN, Broadband, Fiber, Government AU, Telcos, Australia, Next Generation Networks

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.

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Talkback

4 comments
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  • Really?

    "Given that many businesses can already buy 1Gbps fibre services for far less than $20,000 a month..."

    I'm sorry? What's your price of 1gpbs with a 1:1 contention (ie guaranteed)? $20k would appear conservative, with tight download quotas.

    Albo couldn't respond because he has no idea about his portfolio. If he did he could have stated residential users wouldn't require a 1:1 contention ratio.

    David's comment re businesses are also off mark. They'll have the option to connect directly to fibre for a fee (few to several thousand).

    The first paragraph was pathetic, we could turn the spotlight on Rudd if you like (as anyone who has actually meet him knows):-)

    It'll be great to read to audits reports after the election and David's commentary (as it is today reading his past posts in light of NBNCo's now known performance).
    Richard Flude
  • On tha Ball Richard

    Wow such diligence Richard.
    First of the mark here almost every time the NBN gets a mention.
    Hope He's paying you adequate penalty rates for all that overtime?
    Sultanabran-
    • Being in Romania helps

      Articles appear end of day. I don't get penalty rates:-(
      Richard Flude
  • Turnbull claim may be not that far out

    While I can see that Malcolm Turnbull took an exteme case to inflate the cost, David Braue has taken an equally extreme approach in order to come up with an unrealistically low figure. Let's take David's scenario of 200 premises and 1 Gbit/s of CVC bandwidth. Assume for simplicity that all 200 subscribers are on 100 Mbit/s services, so that the total theoretical demand is 20 Gbit/s - a contention ratio of 20:1. Now add in a single 1 Gbit/s subscriber. The total demand and contention ratio have hardly changed, but that one subscriber can generate 5% of the total demand. Why would you charge him only 0.5% of the CVC cost? It would be much fairer (and much more likely) that the RSP would apportion about 5%, or $1000 per month to the 1 Gbit/s subscriber, particularly if he wants to keep his contention ratio at around 20. (I confess that I don't know what contention ratios RSP aim for, but I suspect that they are higher than 20.)

    There is another factor that could come into play. Suppose that an RSP is leasing 500Mbit/s CVC bandwidth into a POI, and along comes a customer wanting a 1 Gbit/s service. If he offers the service, the RSP is obliged to increase his CVC bandwidth to at least 1 Gbit/s, or the ACCC will prosecute him for not delivering the advertised service (See http://www.itnews.com.au/News/319326,greenfields-fibre-operator-fined-for-slow-broadband.aspx). So the cost to the RSP is an additional $10,000 per month. MT's figure doesn't look so outrageous in this case. We know that the cost of CVC's is a concern to RSP's. Simon Hackett said that it was a factor in the decision to sell his business to iiNet, and NBNCo has been forced to offer RSP's the first 150 Mbit/s of CVC bandwidth at each POI free of charge (until the number of premises past exceeds a theshhold value). This situation has come about because of the ACCC's insistence on 121 POI's, fully 60% of which are in the mainland capital cities. To cover the whole of Sydney and Melbourne metro, each RSP has to lease CVC's into about 50 POI's!
    Achilles-9158f