Will NBN karma run over Libs' dogma?

Will NBN karma run over Libs' dogma?

Summary: The change of government in Victoria and its posture towards the NBN-enabling opt-out legislation highlights the persistent dichotomy between what needs to be done and what will be done.

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A few years ago, I asked representatives at a government spectrum conference why, if they were so serious about the digital TV switchover, they didn't mandate TV makers to build digital TV tuners into all their models. The reply — that they were going to let the private market sort that one out — did little to fix the then-current situation, in which some TVs had built-in HD tuners and others were just display panels that required external boxes.

Road block sign

(Road closed sign image by US National
Parks Service
, public domain)

The TV market has steadily moved towards HD tuner ubiquity, but its earlier days were a disaster of confusing marketing that has no doubt seen many consumers still watching TVs with external boxes — a serviceable but less-convenient solution. Yet as the dust from the Parliamentary Telstra-separation brouhaha settles and we brace ourselves for the release of the sure-to-be-bland NBN Co business case, it appears our political representatives are now favouring a hands-off approach that echoes the digital TV problems, but could be far harder to resolve, and cause major headaches for a Telstra that just wants to get on with things.

Moves by Victoria's newly-elected Baillieu government give a taste of the duplicity and frustrating inertia to come as the next round of NBN-related legislation is tabled and state governments weigh up their potential role in aiding, or handicapping, the NBN roll-out. Even though Baillieu's Liberals have said that they would support the NBN roll-out in their state, their recent leanings against an opt-out policy for the NBN show they, too, are favouring a non-interventionist policy and not afraid to incur the wrath of the IT industry in the process.

This newly-announced approach may echo the Liberals' collective scepticism about the NBN, but it's also an optimistic free-market play that ignores the political and technological reality around the project. Namely, with Telstra now on its way to structural separation and its copper network access agreement likely to reach shareholders within the next few months, the company will be moving quickly to take the government's billions and run.

This approach may echo the Liberals' collective scepticism about the NBN, but it's also an optimistic free-market play that ignores the political and technological reality around the project.

As David Thodey has repeatedly stated, the company does not want to be left holding the bag, maintaining the copper network and associated universal service obligation for any longer than it has to as it waits for the last dial-up and ADSL holdouts to decide they're ready to adopt NBN-based fibre services. Yet that's exactly what could happen if the NBN continues to suffer political kneecapping that favours political advantage over telecommunications policy reality.

I haven't gone door-to-door to ask, but I'd wager that most householders are only passably interested, if at all, in the mechanics of the wholesale internet market. While Liberal governments harp on about elimination of consumer choice, those consumers won't care whether their internet wholesale service is carried over Telstra copper or NBN Co fibre; they just want reliable, faster internet, and they want it yesterday. Positioning the choice of NBN Co and Telstra wholesale networks as some sort of important choice is just one more political smokescreen designed to sour consumers on the new network.

Long-time readers will recall my recent admonition that the Liberals should stop opposing the NBN on sketchy political grounds and let it soar or fall on its own. The latest proclamation from Victoria, where the previous Labor government had indicated an opt-out scenario was forthcoming, raises this issue again, but with something of a paradox.

That paradox reads thus: if the Liberals seize power across state governments and consistently refuse to support an opt-out approach, they will surely succeed in hobbling early-stage switching to the NBN. Internet service providers caught in the transition phase will have to lure customers to what is presumed to be a more profitable wholesale structure under NBN Co than the current Telstra arrangements; this will require a formal transition plan and, if customers don't already have NBN connections, an installation fee that will serve as a disincentive towards customers taking up the faster NBN plans.

I'd wager that most householders are only passably interested, if at all, in the mechanics of the wholesale internet market.

If this approach succeeds in keeping voluntary switchover to the NBN at low levels, the Liberals will claim at the next election that their scepticism has been right all along. Conversely, Labor will rightly be able to claim sabotage by self-interested Liberal state governments that will have been favouring their political dogma over opt-out legislation that is arguably in every householder's best interest.

The real question is: which picture of the truth will end users buy? And will the inevitably substantial number those who will inevitably stick with the plans they have now cause a cost blowout when NBN Co is forced to revisit millions of properties to terminate their local connection to the new network?

This last issue is a real possibility — a looming shadow over the NBN roll-out. It's easily solved by doing the right thing: mandating a fibre connection, just as electrical and plumbing connections are now mandatory. But whether or not the easy thing, and the done thing, are the same thing, may well be in the hands of those who have little interest in making it easier for the NBN.

What do you think? Can the NBN succeed even if opt-out legislation is kneecapped? Should the Liberals give in to inevitability and support opt-out legislation to give the NBN a fair go? Or are they right in obstructing it in any way they can?

Topics: NBN, Broadband, Government, Government AU, IT Employment

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

26 comments
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  • Opt-out makes the most sense because its free, otherwise people might get charged to connect later on and of course be very annoyed about that (Why weren't we told etc etc). Also bear in mind that Opt-out means they simply connect a PCD box (premise connect device) to the outside of your house.

    The other point is that Opt-out does not mean you have to buy a service straightaway, you can still keep using your copper if you wish to do so until its eventually decommissioned.
    AngusRow
  • The Libs' strategy is pretty dog-in-the-manger. No surprise there. The real problem with the opt-in/opt-out mess always seems to crop up in areas with high numbers of renters - that landlords are either ignorant or apathetic about signing a bit of paper that they don't understand.

    This is an area where the real estate agents need to get their heads together and make a general recommendation to educate landlords that it is overwhelmingly in their interests to let the NBN installers connect the fibre when it is rolled out. Someone offering to do something to add value to your property, and they're charging nothing? Too easy!

    The flip side, which the agents will need to press home, is that by failing to allow the fibre to be connected, landlords will be making their property far less attractive to future renters, especially younger and more educated/professional renters. And more expensive to upgrade later on.

    However, there is not quite so much of a need to worry about the viability of the NBN itself. Mike Quigley has said on several occasions that while he thought the Tasmanian opt-out provisions were a positive step, the NBN business case does not depend on opt-out in order to meet its targets.
    Gwyntaglaw
  • What targets?
    advocate-d95d7
  • Still asking questions expecting others to answer, whilst you bluntly (now #9) refuse to own up to your contradictions in relation to monopolies.

    So A G A I N... advocate said...

    1. "Government built and run departments never make money and are wasteful.

    2. (Government run) "Telstra paid themself off 10 times" (via dividends etc - NOT the sale)!

    3. "The NBN will NEVER pay for itself because it’s not a total monopoly like Telstra’s last mile”.

    4. "The NBN is “one horse race”.

    5."The NBN is just like Telstra’s last mile”

    6."The NBN will be even more of a monopoly than Telstra’s last mile…"

    I look forward to a reply at last (well you've had some 3 weeks to think of something..."anything")...LOL!
    RS-ef540
  • You have to wonder how a Government that couldn't even get an insulation scheme right has any hope of getting the NBN right. Telstra shareholders should reject the Labor NBN deal and wait for the change of Government that is coming perhaps as early as 2011. When you have a Government in power as weak as this, opt in or opt out becomes irrelevant. In any case NBN will have to offer free connections just to get customers if it aims to be profitable and offer competitive deals. I wouldn't rush like a lemming to get connected to another one of Labor's lemons.
    noelpeters
  • When you have a government as weak as this...?

    You mean the only government to bring your precious Telstra to its knees and make them beg for separation (which they previously fought vehemently against)...LOL!!!!

    As for insulation, a few cowboys ****ed it for everyone. I have insulation and its fine...!

    All your whinging aint helping those Telstra shares...!
    RS-ef540
  • Heh noelpeters and RS; are you forgetting that as business, we are screaming out for reliable high bandwidth connections which don't costs $1000's a month. This isn't about fast net, its about the economy.
    Camm-a0c75
  • On the tiresome question of insulation, is it not the responsibility of state governments to police building related matters? How is it they have ALL got off without a gram of criticism?

    As to the rest of the original article, it paints a grim picture of the ability of the nation's citizens (especially landlords) to understand the simplest of transactions. Are we all so challenged? Won't publicity in local media deal with the issues as the project approaches each community? Just count the discarded computer monitors on the kerbsides during council clean up as evidence the masses are coping with technology.

    I would not underestimate the powers of kids to educate the older generations if all else fails. My 18 month old granddaughter gets cross when the her access to ABC for Kids on abc.net.au is not up to her expectations. And failing to deliver to toddlers is not a good idea.
    Listohan
  • A few cowboys???? People died due to the scheme being improperly managed.
    mwil19-a34f7
  • I'm reluctant to re-engage in this hopeless dialogue about NBNs, fibre and copper but there is only one issue at stake here, namely this:

    $50B or $36B or $27B of whatever the final figure proves to be is just too much to spend on an NBN when everyone knows that in 10 years time with the increasingly rapid evolution of comms technology the concept of running any sort of cable to private homes will be totally redundant.

    noelpeters is absolutely correct - this is another labor lemon.

    Forget it you guys - let’s spend the taxpayer funds on more important things like health and social welfare. Who knows in 5 years time I may then be able to get my hip replacement.
    Brianab
  • I think you need to look at what NBNCo is after in the job section:
    http://nbncojobs.taleo.net/careersection/external/jobsearch.ftl?lang=en
    Nitrofiet
  • Rubbish.

    There is no other technology other than LTE, which is used at hand in hand with Fibre deployments.

    Yes, there is rapid technology expansion, but thats at the customers end of the network, not inside of the network generally. Just like technologies for iPhone, Android, Computers, Video Cards, GPU's, CPU's.

    If we raise our Debt to 20%, we can say spend $20 Billion per year on infrastructure projects and still be the lowest debt country in the west, or even still pretty much the world.

    Brian, open up your eyes abit.
    Nitrofiet
  • Also, Brian,

    Another flaw in your arguement, your replacing NBN with the same debt with health and social welfare, they are big money spenders themselves.

    At least with the NBN, provides jobs and training at the same time, as well as fixing a industry that should of been fixed with the sale of Telstra(And A Shiny new network).
    Nitrofiet
  • Nuts to you Zero - of course health and welfare are big money spinners because they are vital to the wellbeing of our country. Don't you think if we spent another $20B on health that it too might also provide a few extra jobs and training? What is running fibre to every home going to achieve? It will allow propeller heads (like you?) to play high bandwidth games and download movies - big deal - you open your eyes a bit, tens of thousands of people in this country are really suffering from lack of health care, social housing, mental health services ect, ect; the list goes on. It is so easy for the 20 to 35 demographic to think that all that matters is the latest high tech gizmo. Just wait until you get into the 55 to 80 age group and you may find your priorities have changed just a tad.
    Brianab
  • mwil19…

    Do you really believe those tragic deaths (and I say tragic in all sincerity, so as to not trivialise the issue, as you seem to infer I have) were caused by Kevin Rudd or Peter Garrett, personally…?

    Sure the buck stops with them as the managers, but they cannot personally go into each and every house to ensure conformity, that’s what the insulation experts are meant to do…

    It was sheer greed which caused the problems (gees, these people were given a golden opportunity and still wanted to milk it for more) which in turn, also lead to the actual quality tradespeople doing the right thing, losing out, when the scheme had to be stopped!

    So yes, cowboys…
    RS-ef540
  • No Camm, I'm not forgetting... this is one of many reason I fully support the NBN!
    RS-ef540
  • OK Brianab I'm 66yrs old & I find much better health/medical info via the net than from the abundance of imported, often incompetent, barely English fluent "doctors" in my area.
    My late wife would have died years earlier without reliable internet access for support & to pick up on & correct the constant errors made by our public health "Professionals"
    There's a lot more to be had from a reliable, high speed broadband service such as the NBN than the "games & movies" you deride!
    grump3
  • In Rudd's case no but in Garrett's case I do. His office had already been shown evidence that houses and lives were at risk yet did not shut the scheme down for another month. Out the in real world, OH&S law would have him as liable as the dodgy businesses putting in.

    The insulation programme was a knee-jerk reaction to the GFC and the lack of controls around the project and the money validate this. Getting back on topic, my concerns are that with all the secrecy to date, what stops NBN being as bad as the insulation and BER schemes?
    mwil19-a34f7
  • Fair enough...but I'm afraid (as most of the time) we'll have to agree to disagree.

    I guess in relation to the NBN it all depends on your views of the governments schemes, the previous comms regime and/or your political biases.
    RS-ef540
  • Ok grump3 I hear what you are saying, but, unfortunately, you are quite wrong. Remember the old adage - "the man who acts as his own doctor (or lawyer) usually has a fool for a patient (or client)." Whilst the web might be OK for getting info on ingrown toenails or some such other health triviality try using the web to have a hip or knee replacement, your appendix removed or a course of chemo therapy. I agree that there are some doctors (or lawyers for that matter) that leave a little to be desired in terms of their competence however the clear fact is you can not do without them and when and if you ever need major surgery (God forbid) you will find the internet cold comfort.
    Brianab