The missing piece from the Coalition's NBN plan

The man who claimed once that John Howard broke the nation's heart is about to take the NBN and embark on a Tin Man impression of his own.
Written by Chris Duckett, Contributor

Malcolm Turnbull is currently engaged in one of the largest spectacles of cutting off the nose to spite the face that has been seen in public policy for quite some time.

In an environment where the government is beyond being "on the ropes", and is now grabbing desperately at the ropes to avoid toppling over, the opposition had an opportunity to disarm one of the few avenues of attack left in Labor's arsenal. But rather than seizing the opening to prevent any stinging Conrovian attacks from the current communications minister, it's as though the Liberal party cannot bring itself to land the killer blow.

When Tony Abbott and Malcolm Turnbull launched the Liberal's alternative National Broadband Network (NBN) policy, it clarified much of the thinking on how the party views the NBN. As would be expected from a party claiming fiscal responsibility, a Liberal-run NBN Co is a business that can deliver results and returns quickly and efficiently. This is borne out in the Coalition's policy document.

"Broadband policy should be about efficiently meeting community needs, not advocating for a particular technology," the policy says. "Networks should be upgraded in the most cost-effective way, using the best-matched technology."

And the Liberal policy follows these ideals; the rollout will be cheaper and occur quicker than the plan put forward by NBN Co.

Much of the Liberal policy and background document is spent arguing over the present value of the money needed for the NBN.

"Faced with growing use of bandwidth, but no apparent appetite among consumers to pay increased prices, companies makes choices about their optimal investment strategy, taking into account evolving technologies, willingness to pay, incremental deployment and operational costs, and the time value of money," states the Coalition's NBN background document.

It's the sort of that argument that one would expect from a merchant banker, and it is a valuable question worthy of being asked.

Until last week, the Liberals were even in the same order of magnitude as the services offered by NBN Co. For a country that is struggling to top an average broadband connection of 4.3Mbps, the Liberals' minimum of 50Mbps is comparable to a pricing structure from NBN Co, which at the time topped out at 100Mbps.

But on Friday, NBN Co announced that it would be able to offer 1Gbps plans by the end of 2013.

It would seem that a 1Gbps fibre-to-the-premises (FttP) NBN would be enough to make Turnbull's fibre-to-the-node (FttN) NBN look antiquated by comparison, but there is a key section in the Coalition's policy document that has the chance to save Turnbull's bacon:

Future upgrade path where NBN Co extends fibre beyond an exchange, but not to user premises (ie, deploys FttN) it will be required to plan and build in readiness for future upgrades that take fibre further into the field. All FttN designs must be upgradeable.

By saying that "all FttN designs must be upgradeable", the Coalition had offered the country a chance to have its cake and eat it too.

A likely 2013 incoming Coalition government could roll out an FttN network, reaching more of the population quicker than the alternative FttP was ever likely to, and for far less money than the approach of the current NBN Co plan.

But as NBN Co's top speed has increased, and Turnbull has had more air time to explain the Coalition's viewpoint, an outlook has formed that has a chance to keep Conroy and present NBN Co rollout in the game.

To fully disrobe the Conroy FttP emperor, all Turnbull had to state was that at a future date, an FttN-based NBN Co would look into making the transition to FttP only when it was economically viable or the need for such speeds increased.

There are plenty of supporting arguments for the Liberals to take this position. They get to cut billions of "wasteful Labor spending", which is right down the Liberal party's ideology, while still providing a massive hike to John Q Citizen's broadband, with the option of a potential future update at some unknown time.

Truly, it would be the embodiment of the "mixture of technologies" mantra that has dominated conservative telecommunication policies since the turn of the century.

But instead of this prudent, and eventually technically visionary, approach, Turnbull and Abbott are happy to run with quotes that 1Gbps is a "marketing gimmick", and that 25Mbps is "more than enough" for Australia.

It is hardly the language of an open and flexible incoming Liberal government — a government that is conservative in its approach and reacts to the needs and demands of the electorate.

For a party that espouses an intense dislike in governments "picking winners", Turnbull and Abbott are quick to pick out copper as the winner for the future of the last mile of NBN.

To pig headedly pick out copper as the medium of the last mile, simply because it is not what Conroy chose, is merely a case of arguing for the sake of it. It will neither help the country, the Liberal party, nor Mr Turnbull. It smacks of two kids arguing in the back of a car because they are bored.

For the man whose leader claimed he will go down in history as "Mr Broadband", Malcolm Turnbull is more likely to be remembered as "Mr Copper" than a man interested in delivering a world-class but cost-managed broadband solution.

To Turnbull's credit, he has managed to move the Coalition's policy from one of decommissioning the NBN to one that embraces what NBN Co has built, and will build for the next 12 months after an election, before embarking on an FttN build.

But as long as Turnbull does not commit to an eventual fibre build, Conroy knows he has one trump card left in his thin deck.

A glimmer of hope for Coalition fibre appeared on Friday, with Turnbull stating that if fibre costs were lower, a Coalition NBN may use more fibre.

"If the cost of fibre to the premises is considerably lower than what we've assumed, it might be that we could cost effectively do a larger percentage of the build as fibre to the premises," he said.

"We know fibre to the premises is the best technological solution, and if you can build it cost effectively, then you should do so. If we're able to build more of it cost effectively, then we would do so."

Add to that the comments made on the same day to ABC radio:

"And so while postponing investment until it's needed may seem a bit hard headed and sounding too much like a canny accountant than a visionary politician, it actually makes great sense, because if you postpone that investment until it's needed, the opportunity cost on the money that you haven't invested and that would have earned no return in that time, so you've got your investment in your pocket or doing something else. But also, when you do come to invest, you're using the latest technology, and that's a powerful argument to take a more steady and businesslike approach to it."

It is a very powerful argument — but until the potential final state of the Coalition NBN involves a government-funded piece of fibre heading into the vast majority of premises across the country, Labor will always be able to successfully argue that it has a plan that is an order of magnitude better than the Coalition's NBN.

To make that threat go away, all Turnbull has to do is say that one day in the future, FttP will eventually have a place.

Attach all the strings to it, put a fibre upgrade start date out to 2025, and make an argument about opportunity cost for the next decade — the important part is to acknowledge that it will happen.

Failure to do so may result in Turnbull being the man who thought that 50Mbps was enough for the nation.

That's not the legacy of an "internet pioneer", let alone a "Mr Broadband".

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