History won't judge Turnbull's governance-free NBN kindly
The cost-benefit analysis is incomplete, Ziggy Switkowski has gone rogue and there's still no clarity around how or even if the government will access Telstra's copper – yet Malcolm Turnbull happily marked NBN Co's fifth birthday with a new Statement of Expectations putting the NBN on a road to nowhere. How will future Australia judge this day?
Some day, a decade or more from now, some future government – hopefully one with more insight than the current one – will be agitating for plans to upgrade Australia’s broadband infrastructure to the fibre to the premises (FTTP) network it will require through the rest of the 21st century.
Begging for another $30 to $40 billion to be carved out of the budget to upgrade the aging infrastructure that the one-term Abbott administration systematically hobbled in opposition and then short-changed in government, some aspiring prime minister will lament the short-sighted policy put in place back in 2014, arguing that better communications will be essential to helping Australia catch up with our Asian neighbours.
Instead of trying to improve and complete the FTTP rollout as quickly as possible, they will argue, the Coalition ignored its own demands for due process and pursued an ideologically driven network rollout based on the flimsiest of evidence and an utter disregard for the future of the country's information industries.
Arguments will ensue, finger-pointing will be rife, and Telstra's board will watch it all from the comfort of a boardroom where the chairs have been replaced by large stacks of money.
It cannot have escaped Malcolm Turnbull that today, the day he irrevocably redirected the NBN effort towards a future as precarious as it is ill-conceived, is the fifth anniversary of the founding of NBN Co (announced on 6 April 2009 and incorporated on the 9th) and the ambitious if challenged network rollout – which has only recently begun showing signs of the vitality it always promised – it begat.
Although Turnbull will argue that he has couched the NBN in reality at last, that reality is shaky at best and completely unpredictable at worst. He has delegated the NBN's future to what his Statement of Expectations (SoE) refers to as 'fibre to the x' technologies, arguing correctly that NBN Co should prioritise areas of poor service but offering no accounting for the stew of poorly-integrated technologies that his multi technology mix (MTM) architecture will deliver.
Optimists might point out that the 'FTTx' nomenclature leaves the door open for a greater investment in FTTP, giving Turnbull a Plan B should anything fail to match his florid fantasies. Yet both the NBN Strategic Review and Turnbull have argued vociferously that Australia’s broadband lies not in FTTP – which they see as some sort of futuristic anomaly available only to those lucky early adopters or people building new homes – but in fibre to the node (FTTN).
As Turnbull knows but does not readily admit in public, his ability to deliver any of his new NBN policy depends entirely on the largesse of Telstra, which is certain to take its sweet time in allowing the government to rewrite any part of the $11b deal it secured years ago.
Turnbull has been arguing that those renegotiations should be complete by June, but as recently as last night his 2IC, NBN Co chairman Ziggy Switkowski, has confessed that Turnbull's assessment is wrong; conservative estimates suggest Telstra could drag this process out through the end of the year, and Switkowski isn't arguing otherwise.
Despite years of calling for a cost benefit analysis (CBA) to inform decision-making around the NBN, Turnbull has now based his new NBN policy on the conclusions of a biased and questionable NBN Strategic Review that was designed from the outset to affirm everything Turnbull had already decided. The Senate Select Committee recently detailed the sins of that review, but Turnbull doesn't care a whit what the Senate says and continues to refuse to engage critics in meaningful discussions about its content or myriad errors.
The biggest slap in the face around the new SoE, however, is that it totally disregards the governance processes that Turnbull bayed for during his years in opposition.
Despite years of calling for a cost benefit analysis (CBA) to inform decision-making around the NBN, Turnbull has now based his new NBN policy on the conclusions of a biased and questionable NBN Strategic Review that was designed from the outset (with creative maths and deceptions around HFC) to affirm everything Turnbull had already decided.
The Senate Select Committee recently detailed the sins of that review, but Turnbull doesn't care a whit what the Senate says and continues to refuse to engage critics in meaningful discussions about its content or myriad errors. Rather, he simply dismisses legitimate critique as the work of "zealots" and moves on in his merry way.
Now, with that dodgy review under his arm, Turnbull is now steering the Good Ship NBN towards his MTM model without even waiting for the results of his own CBA – which should (one would hope) provide something resembling an impartial judgment about whether the MTM is actually the best way forward.
A CBA could expose the soft underbelly of Turnbull's MTM, whose genesis is irretrievably linked to Turnbull's utter failure to give even cursory attention to the relative benefits that a full-FTTP infrastructure offers compared with the more-of-the-same MTM.
Given that the Coalition's only concern with just about anything seems to be its costs, and that there is absolutely no discussion in a Turnbull ministry about the relative benefits of the models to be discussed, it's fair to believe the CBA's outcome is already certain.
Turnbull's third mistake is that he still has not waited for the results of his negotiations with Telstra to see if FTTN can even be realistically rolled out at nationwide scale. If Telstra proves stubborn – as it has, over and over, in the past – we can add years and billions to the MTM timetable as well as returning control over Australia's broadband future to the company it tried to free itself from 15 years ago.
Indeed, there has still not been any large-scale trial of FTTN technology to see if it will actually be able to be rolled out across Australia’s suburbs and regional areas with the cost and technological efficiency he seems to believe.
Nobody is saying that FTTN and its underlying VDSL technology do not work; the real question is, how well will it work in Australian conditions? Turnbull has crowed about the results of fibre-to-the-basement (FTTB) trials that correctly identify the benefits of that model over the short-run cable installed in apartment buildings, but that does not automatically translate to the broader FTTN rollout.
If Turnbull can't tell the difference between FTTB and nationwide FTTN, he shouldn't be communications minister – and if he can, he should refrain from using the results of a single FTTB connection to justify his own FTTN folly.
These sorts of issues all speak to the extremely selective governance that the Coalition has wrapped around the NBN effort. Turnbull's decision to release a new SoE without waiting for the same level of probity that he demanded from Labor for three years in opposition, has streamrolled all illusions of due process and made a mockery of his calls for transparency and good governance around the NBN.
Any governance in the future will be entirely on his terms and designed specifically to gloss over the many, many questions that persist around the NBN's new direction. Those that question his strategy will be invited to reapply for their jobs so they can be replaced with less problematic minions.
In advocating for the purchase of Telstra's copper network, Switkowski is also effectively shellacking the former Coalition government, which oversaw the sale of that very network....Switkowski is suggesting that the Howard government was premature and incorrect in selling off that asset; for NBN Co to now be courting Telstra to buy it, hat in hand, is frankly embarrassing.
Surprisingly, Switkowski is now publicly advocating the purchase of Telstra's copper network – going against technical advice, common sense, and business logic.
He's also ignoring NBN Co's own advice, which said the unknown costs of remediation – which could be four to six times higher than those of FTTP – made the purchase of Telstra's network ill-advised. The government will rent Telstra copper services for the eventual FTTN trial, but clearly it is ownership of the copper that is – embarrassingly – now Turnbull's endgame.
In advocating for the purchase of Telstra's copper network, Switkowski is also effectively shellacking the former Coalition government, which oversaw the sale of that very network to a public that was systematically deceived about the true extent of the reform that the government would drive.
In the context of today's telecommunications environment, Switkowski is suggesting that the Howard government was premature and incorrect in selling off that asset; for NBN Co to now be courting Telstra to buy it, hat in hand, is frankly embarrassing.
This new SoE certainly sets a new direction for the NBN but it also, in true Turnbull style, glosses over the many difficult truths of his policy to give the appearance of actually doing something. Until that deal is renegotiated and signed in blood, Turnbull's new NBN infrastructure plan is just a large, fluffy pile of nothing – and sets expectations that NBN Co simply cannot deliver until Turnbull gets around to doing some actual minister-ing.
The effects of Turnbull's declaration today may not be felt for years, when FTTN is widespread and people actually start banging their heads against its technological limits. But in 2024 – when this whole debate starts all over again, and the government of the time begins considering the cost of upgrading the Coalition's folly to what even Turnbull's strategic review admits would have been delivered by 2024 – I hope Turnbull is still ready to argue that he did the right thing on that day back in April 2014.
What do you think? Is Turnbull's Statement of Expectations putting the NBN on the right course at last? Or is it the real beginning of the end for Australia's broadband future?