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Sans costs, Turnbull's 'policy' is no policy

Malcolm Turnbull may not have been announcing Liberal Party policy last week, but he might as well have been. Yet while his statements featured fewer technical fantasies than previous attempts, his unabashed optimism about Telstra and refusal to substantiate his claims with fact prove that the Coalition still lacks the gravitas to formulate workable NBN alternatives.
Written by David Braue, Contributor

I didn't end up with bruises from banging my forehead against the desk, as when I read the Coalition's gut-wrenchingly awful election communications policy last year. However, after reviewing Malcolm Turnbull's recent revelations about the party's current NBN "policy", I was struck by his determination to continue the fine Liberal tradition of promising the world but forgetting to check the price of the tickets.


For someone with such a strong business background, Turnbull remains surprisingly reluctant to talk costs.
(Credit: David Braue/ZDNet Australia)

That Turnbull's comments, made during a Q&A session at a Sydney conference, have been universally assessed as some form of official Liberal Party policy confirms that the industry is desperate for clarity about the potential ramifications of a 2013 Liberal election win.

There were, on balance, some relatively reasonable motherhood statements, such as Turnbull's support for a "pragmatic approach" that included fibre in greenfields roll-outs — a rare area where his amendments managed to gain support, if not legislative weight. There's the expected commitment to a cost-benefit analysis that will stall the NBN roll-out for six months (call it a year) from the date of a Liberal election win. There's the usual lack of firm commitment to rural areas beyond a wishy-washy subsidy scheme that will shift infrastructure risk back onto a jittery private sector that still has no interest in servicing unprofitable rural areas.

And, of course, there is the jaw-dropping optimism with which Turnbull has dismissively addressed the cancellation of the company's contracts with Telstra and Optus — whose hybrid fibre-coaxial (HFC) networks he will preserve in the name of competition but even, as an "ambivalent" Optus head Paul O'Sullivan subsequently made clear, in the face of a lack of a demand by those companies to actually keep those networks.

What Turnbull does not do is commit to opening up those HFC networks to competitors, which are currently unable to access wholesale services that would allow customers to get 100Mbps services from other operators. Without government intervention to force the wholesaling of those networks, he's not so much preserving competition as destroying it — and handing Telstra and Optus a non-competitive duopoly over the provision of 100Mbps services to the 25 per cent of homes that are currently cabled. Since both companies have been proved happy to take money instead of operating those networks, forcing them to keep the networks operational — and rewarding it with elimination of competition — is only likely to increase costs.

Without government intervention to force the wholesaling of those networks, he's not so much preserving competition as destroying it.

Everywhere else, Turnbull will deliver fibre-to-the-node infrastructure in those areas where people live too far away from the local exchange to be able to get decent service over copper. And that, as you and I know all too well, includes both rural areas and suburban areas from one end of our country to the other. For example, I live in a dense suburban area 5km from the local exchange but Turnbull will, apparently, bring fibre to my street corner so I'm within VDSL's ability to get me a 50Mbps service — or would, if he wasn't going to leave me to the ravages of his cosy HFC duopoly.

While Turnbull's technical vision is not as reprehensible as the Liberal Party's wireless-is-best approach from last year, his logistical insight seems to be blurred by the cataracts of party dogma. He casually refers to renegotiating the government's deals with Telstra and Optus — which would be essential before any fibre-to-the-node deployment could proceed — while ignoring the fact that Labor's just-signed deals took years of struggle to negotiate.

He also wants to convince us that the plan would be faster than Labor's — although by the time you add up delay after delay, that assertion is revealed as a joke. Analysts expect if Turnbull's plan is implemented, we could face a four-year delay until everything is sorted out and building can proceed. Maybe I'm missing some semantic detail, but I wouldn't call that faster than the plan currently in place.

Even worse: despite his supposed rationality, Turnbull is continuing the fatal flaw that allows the discounting of so much of the blather that comes out of the Coalition's policy-making machine: it is simply unable to assign real, backable costs to its policies. Throughout the entire process, he makes no assertions as to just how much cheaper this whole plan would be — and when called to do so by Conroy, he fell back on the time-honoured strategy of dodging the question and bagging the government.

The stench of rhetoric

Turnbull has from the get-go assumed that his solution is cheaper than the government's NBN — and it very well may be. But if he cannot cost his own policy and — as he predictably did just hours after Stephen Conroy called on him to provide firm numbers — simply hits back in a flurry of empty and evasive rhetoric, how are we supposed to take this policy any more seriously than the Coalition's previous ones?

The costs of the existing NBN plan are well understood and, despite hysterical fearmongering that has planted speculative figures into the public debate, have been made clear to the public since the policy was announced. We know approximately how long Labor's NBN will take to build, approximately how much it will cost, and exactly what it will deliver.

What Turnbull seems to have forgotten is that the country is not, for now, choosing between two alternatives: the NBN is being built right now, and it is the government's current policy. What Turnbull is proposing is a change of plans — and for that proposal to be accepted, it is imperative that he stop hiding behind political deflection and come up with some real numbers by which his alternative can be evaluated.

If he cannot provide those numbers, the Coalition is simply spouting empty rhetoric, as it has done with such aplomb on all manner of topics. It has become so adept at spouting baseless attacks on all manner of topics that commentators are now regularly calling time on Tony Abbott and the vitriolic culture of the party he leads: Business Spectator's Rob Burgess, for one, highlighted how the Liberals love to ignore financial reality and the ABC's Annabel Crabb summed it up beautifully in writing about Abbott's "one-man battle against demonstrable logic".

If Turnbull cannot cost his own policy and simply hits back in a flurry of empty and evasive rhetoric, how are we supposed to take this policy any more seriously than the Coalition's previous ones?

Ever more rational than his master, Turnbull has at least shown a willingness to modify his policy as reality over and over proved his earlier NBN ideologies to be hollow fantasies. However, just as Tony Abbott made it clear he would ignore the results of a pro-carbon tax plebiscite, Turnbull made no commitment to continue the NBN if a cost-benefit analysis found that Labor's plan was indeed the most cost-effective approach.

And surely — given that a cost-benefit analysis conducted in 2013 would have to factor in far broader investment-to-date than one conducted in 2010 — even Turnbull would have to concede that the plan could well turn out to be the most cost-effective way forward. With contracts in place and presumed momentum gained, the incremental cost of finishing the NBN will be far less than going back to square one, or even stepping back to square four as Turnbull is suggesting.

When it comes to infrastructure building, the basic problem with the Liberal philosophy is that it approaches budgeting with the fundamental mindset that any spending is fat ready to be trimmed, and that anything can be made more efficient by reducing its funding. It's like your Grandpa Barry who keeps the house at 16 degrees year-round and, if you're brazen enough to complain, tells you to shut up and go put on a jumper or three.

Mediocrity, Liberals argue, is good for us because spending money is anathema to progress. And this philosophy reverberates throughout everything the Liberals do — whether it be slashing funding from already-struggling schools, promising to knife an ambitious but world-leading electronic healthcare records project, or basing the party platform on delivering a mediocre improvement to broadband services that — the Liberals unabashedly proclaim — will keep Australia right there in the middle when it comes to broadband innovation.

"Good-enough" broadband, the Liberal creed goes, is good enough for Australia. We should not aim too high, or look too far into the future, because it is expensive. Turnbull's policy not only axes Labor's revolutionary vision for world-class broadband, but aims for middle-of-the-road outcomes on the back of an argument that is still both unfounded and speculative. Unless he can come to the OK Corral for an honest fight, armed with real numbers and firm plans, he's just blowing more smoke up the noses of those who need just a whiff to turn anti-NBN posturing into bloodsport.

What do you think? Was Turnbull's "policy" a game-changing breath of fresh air? Or a warning for a change-weary industry that more upheaval is inevitable if the Libs gain power? Should we accept his assumptions that the Coalition's approach is cheaper without demanding numbers? And — days later — are you still buying it?

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