10 NBN questions to consider before voting Labor

Before you go to the voting booth on September 7, ensure you've weighed up the full implications of both parties' NBN strategies. In this instalment, David Braue looks at the government's policy.
Written by David Braue, Contributor
Image: Vote Laboral

If you're even marginally interested in technological issues, you've likely weighed the future plans for the NBN into your voting choice for September 7. And — despite Tony Abbott's efforts to paint the election as a referendum on the carbon tax and Kevin Rudd's efforts to paint it as a referendum on gay marriage — the respective parties' NBN strategies may in fact be the most relevant issue to you. They may even be a deciding factor in your vote.

However you ultimately decide, make sure that you go to the voting booth having weighed up the full implications of both parties' NBN strategies. Each has its weaknesses and its challenges, and each takes a lot on faith. Here, for your consideration, are 10 questions and answers to guide your decision making before voting for Labor's NBN.

Our 10 NBN questions to consider before voting Liberal is also available.

How long will it take?

Labor argues that the NBN will be finished by around 2021. Despite assurances by the party that the rollout is on track, it is not: Repeated delays, admittedly not necessarily due to failures by Labor, have taken their toll, and the project is almost certain to run over time. Just how far over time will depend less on Labor's NBN plan, and more on the ability of subcontractors to actually execute the rollout as quickly as they need to.

At this point, it would not be unreasonable to expect that Labor's NBN rollout will more likely finish in the 2025-26 timeframe. Whether that actually matters is another issue: The Liberal Party has worked to paint the NBN as an all-or-nothing proposition, but the fact is that, even at current rates, hundreds of thousands of Australians will get access to the NBN in coming years — and will be enjoying its benefits long before the rollout is complete.

How much will it cost?

Existing NBN plans already show that NBN services are cheaper than their non-NBN alternatives; with increased competition and larger potential market sizes, you can expect downward price pressure to keep NBN prices quite reasonable.

The Liberal Party keeps banging on about NBN Co's ARPU (average revenue per user) projections tripling in coming years, but this is a furphy, because ARPU is expected to increase not because internet services will triple in price, but because greater usage of the network is expected to see subscribers taking on additional services such as pay TV.

This, in turn, will require retail service providers (RSPs) to purchase more wholesale bandwidth from NBN Co — which will, in turn, deliver the ARPU increases to which NBN Co is referring. RSPs will build those increased costs into the rate they charge you for your pay TV, but your overall expenditure won't change, since you won't need to pay for Foxtel over hybrid fibre-coaxial (HFC) anymore. Ditto the eventual addition of complementary services such as e-health and interactive government. Therefore, the correct statement is not that the NBN will make internet access more expensive — but that it will benefit financially as consumers embrace new uses for the services it delivers.

Another Liberal favourite is to argue, as Malcolm Turnbull did recently, that it will cost AU$20,000 per month to deliver a 1Gbps service. Do not believe this; here's why.

Will it work?

Yes. Despite all of the political controversy around the rollout, the underlying technology of Labor's NBN is technologically sound and capable of delivering 1Gbps (and faster) services to every property it reaches. Actual service levels will depend on RSPs' network design, and it's likely that there will be some services performing more slowly than expected as RSPs work out the ideal contention ratios. There will also be some teething problems as long-established services such as security systems, remote health monitors, building management, and other systems are transitioned to fibre.

That said, Labor's core contention about FttP — that it is a reliable, fast, and future-proof technology — is correct. The project, as it is currently designed, is the best way to separate the telecommunications industry from its reliance on Telstra — and to deliver improved services and competitive outcomes for all Australians. Any attenuation of its rollout may be due to cost savings or other concerns, but claims that fibre is the wrong technology, or is outdated, are simply false.

When will I get it?

For many of us, this is the ultimate question that will determine our vote. The answer varies widely, of course, and the first part of it is to encourage you to check on the NBN Co rollout map.

If you're lucky enough to be in a one- to three-year rollout area, it probably doesn't matter which party you choose, since the contracts may very well already be in place to cover your area within the next few years. If you're not in an area already pegged for NBN coverage, however, it's anybody's guess as to when NBN Co will get around to it. You are more likely to get on the rollout plan sooner if you live very close to an existing FSAM (Fibre Servicing Area Module) coverage area, since NBN Co has designed the network in a way that seeds an FSAM in an area and then spreads the rollout from there.

What role will Telstra play?

Assuming that Telstra is able to resolve the asbestos issues preventing access to its ducts, the company's role under a Labor NBN should be largely consultative, although there's always the possibility that Labor could try to enlist more of Telstra's technical infrastructure army to help boost its momentum.

What will be most relevant about Telstra is the way its structural separation plays out. The NBN fundamentally changes Telstra's service delivery role — and if Labor is re-elected, David Thodey will have to give up on what must be a lingering hope that the company can continue to milk its massive broadband business in the way it has. Under Labor's plan, Telstra will lose its stranglehold over Australian fixed broadband services — encouraging the competition that was legislated for back in 1997.

Are there enough skilled staff to finish it?

This is a tricky one. Subcontractors have so far managed to put a fair few boots on the ground, but the failure of Syntheo's NBN construction effort will have sent shudders through NBN Co, Labor, the Liberals, and everyone else involved in the rollout. Australia has a broad and deep pool of telecommunications talent, but much of it is already committed elsewhere — so NBN Co's ability to secure long-term subcontractor commitments will depend on how appealing it can make the NBN rollout work for them. Indications are that prices for NBN labour are on the rise, which could ease uncertainty for subcontractors.

The return of a Labor government would also provide certainty to subcontractors that have been understandably shy about committing to NBN-related staff training in the short run-up to an election that's expected to result in a change of government; with three years of certainty either way, staff development should become easier.

How will the government manage NBN risks to keep its momentum?

Risk management has been difficult for a Labor Party whose own tumult has spawned years of uncertainty. That said, NBN Co CEO Mike Quigley has paid considerable effort to developing governance structures in the knowledge that the project is a high-profile, highly scrutinised effort. That said, there have been issues with the opaqueness of the rollout — particularly around access to its rollout numbers.

A returned Labor government would need to reward the electorate with increased transparency into the rollout, particularly in terms of using it to fight an incensed Malcolm Turnbull-led opposition. It would also need to work with NBN Co to refine governance arrangements so that subcontractors' resources are appropriately vetted to ensure that there are no more surprises. This might, for example, involve shorter, more enforceable milestones and more regular review of progress to date so that trouble spots can be identified and dealt with before they blow up into political fodder.

What role will a Liberal opposition continue to play in the NBN debate?

If the electorate rejects the Coalition's NBN alternative for a second time, the Liberal Party will have to accept the vote as a mandate for Labor's fibre-to-the-premises (FttP) rollout. A returned Malcolm Turnbull, who has indicated that he will stay in his communications portfolio, would have to shift his focus from advocating an alternative to Labor's NBN to ensuring that he stays on the rollout in a checks-and-balances sort of role. This would lend stability to the NBN rollout and potentially improve its execution if Turnbull can focus on productively contributing to make Labor's rollout work better.

What are the alternatives?

Labor's entire rollout is based on avoiding the alternative — a lingering, sub-standard fixed communications network controlled by Telstra and delivered to customers by either Telstra or those few service providers that have been able to eke out long-term, profitable business models based on its largesse. The recent implosion of ISPOne, Kogan, and other mobile wholesalers shows how stable a business model this is.

The other alternative, of course, is the Liberal Party's fibre-to-the-node (FttN) policy. This policy takes a lot for granted, in terms of the government's access to existing copper and HFC infrastructure, and would almost certainly involve Liberal concessions to Telstra in order to gain its support. This might facilitate the delivery of an FttN solution, but Telstra is a shrewd operator and would be negotiating from a position of strength, which makes it unlikely that such an alternative would deliver the level of telecommunications competition that Labor's model will.

What could possibly go wrong?

Plenty. If Labor is returned to government, it faces very real issues in building up the momentum of its rollout, which must reach peak velocity soon if the network is going to be finished before the late 2020s. The departure of well-respected NBN Co CEO Mike Quigley will create a leadership vacuum that won't be easily filled, and attendant delays during the leadership transition could contribute to a sense that NBN Co is rudderless. Expect unions to capitalise on this as subcontractors, recognising Labor's weakness, move to renegotiate arrangements and potentially disrupt the rollout in the process. There's also the question of Telstra, which has been idling in the run-up to the election and will ramp up its competitive alternatives — for example, its booming 4G wireless rollout — if Labor wins government. This will lead to further pressure on Labor to justify its approach, and to continually defend its progress as it fights to get the rollout up to speed.

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