Liberal dogma bites as Turnbull faces NBN's 'repugnant' reality

He may not like it, but communications minister Malcolm Turnbull is going to have to make some hard decisions – and accept some hard truths – to turn his alternative NBN policy into anything more than thick reports and empty soundbites.
Written by David Braue, Contributor

This weekend will mark 150 days of the Abbott government and Malcolm Turnbull's communications ministry – putting them around 15 percent of the way through the government's current term – yet the government is still in election mode when pressed on its lack of progress in effecting policy change more substantive than media soundbites or the factual manipulations of the NBN Strategic Review.

We were reminded of this when, on the ABC's Q&A this week (watch it here), Turnbull was asked by a rural resident struggling to get decent Internet services what he was going to do to resolve the fact that the current Interim Satellite Service (ISS, which he mistakenly referred to as the Interim Satellite Solution) is struggling to keep up with demand.

It may be hard to swallow, but Turnbull's going to have to compromise party dogma to fix the NBN. Hot dog image CC BY-SA 3.0 Sunbeam60 (http://en.wikipedia.org/wiki/File:Hotdog_three.jpg)
Hot dogma: It may be a hard solution to swallow, but Turnbull must compromise Liberal-party convictions to build his NBN. Image CC BY-SA 3.0 Sunbeam60

Limited capacity on existing satellite solutions has long been understood to be a limiting factor, with Turnbull's predecessor Stephen Conroy on record explaining the prohibitive cost of buying all of the available capacity across a host of available satellite services.

It was always going to be a significant part of Turnbull's ministry to resolve this issue, which was already well understood back in 2012, when NBN Co announced its plans to launch two new Ka-band satellites in 2015 (a decision that, if you recall, Turnbull vociferously attacked for being a "Rolls-Royce" solution).

Yet Turnbull – who as opposition communications spokesperson argued that the private sector was more than capable of meeting demand – wasted not a second this week attacking the former Labor government, calling its satellite solution "absolutely appalling" and trying to skewer Labor on its figures about the number of premises passed.

"It is a compete shambles", Turnbull spat, correctly highlighting the fact that industry attempts to apply normal Internet-industry pricing and service mechanisms to the existing services had resulted in service so poor that iiNet stopped selling them back in August.

Yet the limitations on private satellite capacity are hardly the fault of either political party, but a product of the telecommunications private market that Turnbull continues to believe can somehow be prodded to suddenly and dramatically resolve all outstanding issues with Australia’s telecommunications services.

Rather than saying what most Australians would instinctively say about the situation – "thank goodness the former government had the guts to commit $2 billion to fix this problem correctly" – Turnbull went into campaign mode yet again: "it is an appalling state of affairs and I am trying to find some solutions to it at the moment," he said. "As with most messes the Labor Party has made, the only solution is spending more money."

Well, yes. When your existing infrastructure doesn't have enough capacity to meet demand, someone has to spend money, somewhere. And, in this case – unless Turnbull wants to contract Google to fly some of its blimps over Australia's regional centres and rural areas – this means adding additional satellite capacity.

Turnbull has had to admit – quietly, privately and quite painfully, I'm sure – that the Coalition's dream of the broadband market being adequately serviced by a free-market capitalist telco Utopia is little more than a pipe dream.

Look past the copious and predictable volume of political grandstanding that, inexplicably, has continued months into the new government's term, and you see that the need for additional satellite capacity is just the latest in a long string of cases where Turnbull has had to admit – quietly, privately and quite painfully, I'm sure – that the Coalition's dream of the broadband market being adequately serviced by a free-market capitalist telco Utopia is little more than a pipe dream.

TPG's decision to roll out fibre-to-the-basement (FTTB) to half a million potential NBN customers is another nail in the coffin of the Abbott dogma. An extensive FTTB network built by TPG would not only allow the upstart company to cherry-pick customers in those areas – typically younger, IT-hungry types who appreciate the value of good broadband and are willing to pay for it – but would compromise the necessary infrastructure monopoly that, NBN Co explained to Turnbull months ago in a briefing document he simply brushed off, must exist if the project is to pay itself off.

The FTTB issue puts Turnbull between a rock and a hard place, and it is perhaps here that he is right to blame Labor: the previous government's blind insistence on running fibre to every apartment, rather than implementing a more-pragmatic FTTB solution, created more problems than it solved and kept rollout numbers far lower than they should have been.

Had Labor spelled out an FTTB strategy early on, TPG wouldn't even be bothering to try to compete on an infrastructure level with NBN Co as its expenditure would be quickly rendered redundant.

Yet there is equal blame here for the Coalition: it's now obvious that TPG, Optus and the other companies considering FTTB deployments were aware that ubiquitous FTTP would make their own FTTB unsustainable. TPG announced its plans just over a week after Abbott was elected – all but confirming the reason it hadn't announced its move earlier.

The fact that, in the wake of the Coalition's election and its still-evolving policy, those private companies feel its NBN alternative won't be adequate competition for them, speaks volumes about the industry's perception of Turnbull and his NBN revisionism.

Like a hungry vegan at a hot-dog eating competition [resolving these conflicts] will require Turnbull to overcome his internal revulsion for what, just after the 2010 election, he called a "repugnant monopoly".

Whereas Conroy was seen as a fierce policy bulldog who was not afraid to roll up his sleeves and pummel Telstra into submission, Turnbull's performance to date – and his failure to commit to any real action beyond his casual "carry on" hand-waving – appears to have been received by the industry as ineffectual and empty.

Just as the only improvement to the satellite situation will come from Labor's 2012 cash splash, Turnbull's insistence on dismantling the current rollout is seeing him paint himself into a corner. He now faces the prospect of having to concede that his party's utilitarian telecommunications policy is simply out of step with the realities of the industry.

Blocking might will help preserve the tenuous revenue model on which Turnbull's alternative NBN model depends, but – like a hungry vegan at a hot-dog eating competition – it will require Turnbull to overcome his internal revulsion for what, just after the 2010 election, he called a "repugnant monopoly".

The Coalition's NBN was born in party-room fantasyland but must, as Turnbull is increasingly and painfully becoming aware, be built in the real world. And, in that real world, "I am trying to find some solutions" will only get you so far.

As Yoda famously said: "You must unlearn what you have learned... Try not! Do. Or do not. There is no try."

If Turnbull can't stop blaming Labor and start actively reconciling the many discrepancies between his vision and that real-world reality over the next 945 days (give or take a few), trying will be far from enough. If he can't start offering definite answers rather than finger-pointing and confusion, he may find his vision ended by people determined to vote for somebody – anybody – who will.

What do you think? Is Turnbull right to blame the satellite issue on Labor? Should he allow TPG to build its FTTB network? Or, can the new NBN properly grow despite cherry-picking?

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