Just because NBN Co serve you doesn't mean they like you
Just so we get this straight: when Labor proposes spending $43 billion on an FTTP network it's "reckless spending". When the Coalition spends $41 billion on a hodgepodge it's "money well spent". This, from the government that's putting the 'con' back in 'condescension'.
Ziggy Switkowski isn't a career politician, but his latest interview suggests he's learning quickly. With just a few words to a recent business lunch, he confirmed that revisionism is alive and well in the Coalition-led NBN Co – and reminded us why, when it comes to the NBN, the government continues to put the 'con' back in 'condescension'.
The words in question: Switkowski's claim that spending $41 billion on the government's NBN would be “money well spent”.
This statement is patently ridiculous for two reasons.
The first is that “well spent” implies a process of assessment has taken place, but there still has been no completed cost-benefit analysis (CBA) to evaluate the expected benefits of the government's multi-technology mix (MTM) model for the NBN.
Until mid-year, when the Vertigan Review will hopefully give us a realistic and balanced assessment of the benefits that the MTM NBN will bring – and how they compare to the benefits expected from Labor's fibre-to-the-premise (FTTP) model – it is absolutely meaningless to make authoritative statements about the value of any investment.
Any honest CBA will have to also consider the benefits that would flow from the other five options highlighted in the NBN Strategic Review – two of which, we must recall, still involve the construction of an all-FTTP network. These must be assessed alongside the favoured MTM before Switkowski or anybody else can make conclusive statements about the value of the MTM.
Were the CEO of a public company to make a statement about such a massive investment without clear and irrefutable analysis to support it, he would be ridden out on a rail: statements about business value must be based on fact, not political convenience or sheer willpower.
The second reason we should recoil at statements like Switkowski's is because it highlights the almost eye-stinging hypocrisy that continues to surround the NBN in its current incarnation.
I know it was more than a week ago and therefore has fallen out of the current news cycle, but didn't we just all suffer four years of being told, as Malcolm Turnbull put it, that building Labor's “$43 billion National Broadband Network thought bubble” was an utter waste of money?
Weren't we told that the NBN represented “reckless spending” and that “billions of dollars were being spent unwisely with no real benefit to the community”?
Didn't we just all suffer four years of being told, as Malcolm Turnbull put it, that building Labor's “$43 billion National Broadband Network thought bubble” was an utter waste of money and represented “reckless spending” .... Now, we're told that $41 billion to buy a multi-technology mix (MTM) model – which, by the way, is still unbuildable and completely, entirely speculative – is “money well spent”.
That “the NBN is now a $43 billion project over 8 years with an unknown cost to the Australian public because the government is proceeding without analysis of the cost or customer take-up”?
Yes, we were told all of that – and much more. Of course, during the same press conference Turnbull also said that he would “certainly” be prime minister if the Coalition were elected. And we know how that worked out.
Now, years later and with a government fixated on stripping every last cent out of the project no matter the functional compromises, we're told that $41 billion to buy a multi-technology mix (MTM) model – which, by the way, is still unbuildable and completely, entirely speculative – is “money well spent”.
This, from someone who was once reportedly on the short list to chair the construction of Labor's $43 billion version of the network – and was a staunch advocate for that model and price tag.
Clearly, Switkowski isn't afraid of believing whatever he is told to believe. After all, he's the one who previously and publicly told Business Spectator (watch it here) that the fibre NBN was “a very important project” and that “the government strategy of investing in a high speed, fibre optic based broadband network is a good one.”
Of Labor's $43 billion plan, remember, he said “I think it's a project that deserves our support...I think an all-fibre network is a desirable endpoint and along the way it will render obsolescent the copper network.”
That, of course, was in 2009 and is therefore far in the past for Switkowski, who is now arguing that spending basically the same amount on an MTM NBN is “money well spent” even though its implementation depends on acquiring the very same copper network he said would become “obsolescent” back then.
Switkowski's flip-flopping on network architectures has been well documented by a media that increasingly has no idea which of his statements – like those of his boss Malcolm Turnbull – are actually meant to be taken as meaningful or enforceable in any way.
It's worth mentioning that, in the same discussion last week, Switkowski reportedly said that projecting NBN speeds of 100Mbps by 2020 “would be about right”.
Not even the NBN Strategic Review has predicted this outcome, nor did it suggest that NBN Co will even deliver 100Mbps by the MTM NBN's projected completion date in 2021. Apparently, we've just witnesses yet another change in scope for the project.
That's a pretty big contradiction for someone who has famously downgraded NBN Co's ambitions to the point where Switkowski will not even guarantee the download speeds his NBN will provide.
It's also rather difficult for someone who believes telecoms guarantees “have lost their currency” – and that the entire telecommunications industry is rapidly turning against NBN Co “for completely understandable reasons” – to expect that Australians will ignore the obvious hypocrisy of his assessment and accept that the $41b project is indeed “money well spent”.
The biggest problem in this revisionist and condescending NBN culture, however, isn't the blind optimism and the political-speak with which the government has promoted its purported economic credentials. It's not the way that we as a country are being so blatantly groomed for self-sacrifice in tomorrow's Budget.
Not even the NBN Strategic Review suggested NBN Co will deliver 100Mbps by the MTM NBN's projected completion date in 2021. Apparently, we've just witnesses yet another change in scope for the project.... That's rather difficult coming from someone who believes telecoms guarantees “have lost their currency”.
It's that, in repeatedly telling us that black is white, the new captains of the NBN – like those now running this country – are simply ignoring the legitimate concerns of the population. They have no real interest in meaningfully engaging with industry or potential users about the network, but are railroading their preferred model through based on nothing more than blind optimism and a callous disregard for even constructive criticism.
I'm reminded of the slacker convenience-store clerks in Kevin Smith's hilarious breakout film Clerks, which was marketed with the tagline “Just because they serve you, doesn't mean they like you”.
The premise of the movie is that the employees hate their jobs and mock their customers at any opportunity, while flouting propriety and laying waste to the very premises they've been entrusted to manage and protect.
Could a more apt tagline be attached to the way NBN Co and the Coalition government are treating voters on the eve of what they're selling as the Budget we had to have?
Sure, we don't have romantic angst and necrophilia (although some might argue to the contrary given the state of Telstra's copper network). We don't have incognito salesmen, broken roller blinds, stoners loitering out front, or hockey games played on the roof.
But we do have Hockey and Cormann smoking cigars in fat-cat style, plenty of voter angst and an overriding, despairing feeling that the current management and political structure is quite happy if the NBN is broken, just as long as they can convince themselves they're right.
In the process, they are setting themselves up for a huge fall if the CBA – miraculously and unlikely as it might be given the framing of this particular CBA – concludes that it is indeed not money well spent to drop $41 billion on a MTM network that's mostly rehashed from existing infrastructure and would create a management and technological nightmare.
When it comes to the NBN the government is so desperate to sell its purported economic credentials that it is writing massive cheques that it can't cash – and Switkowski has become its bookkeeper. If the many limitations of the MTM model prevent him from balancing the benefits column with the “well spent” $41 billion in the cost column, voters' tolerance for the government's condescension may well run out.
What do you think? Can a $41 billion MTM be “money well spent” even as a $43b FTTP network was “reckless spending”? And: will voters punish a government that takes them for granted for too long?