Home & Office

Telstra, not gormless Libs, plaguing Conroy

Liberals' opposition to the NBN may have rallied opponents around a cry of fiscal responsibility, but Tony Abbott's continuing insistence the money be spent on roads shows he's not afraid of spending; he just doesn't like the NBN. But as the industry further distances itself from Liberals' tide of negativity, one big question remains: can Conroy clinch the deal and make Abbott's threats irrelevant?
Written by David Braue, Contributor

It wasn't too long ago that Stephen Conroy's internet filter plans deservedly bagged him the award for internet Villain of the Year. But with the filter on ice for now and 2011 most definitely the Year of the NBN, Conroy is getting accolades of a different sort even as he's now staring down the biggest challenge of his career.

That challenge, of course, is the completion of NBN Co's deal with Telstra, which has dragged on and on — it's even worse than The Curious Case of Benjamin Button. The latest signs from the NBN Co-Telstra negotiations suggest that chronic delays to the completion of the agreement are in fact the fault of the Coalition — whose determination to kill off the NBN at the first opportunity has led to some serious conversations about what happens to the duct-sharing deal if the Coalition wins power.

Eyes wide shut: The Liberals' pin-the-tail-on-the-policy approach to the NBN echoes desperate efforts by cigarette makers to discount plain packaging.
(Plain cigarette packaging image by D'Oh!, CC BY-SA 3.0)

It is stunning that, despite a total lack of coherent broadband policy, Tony Abbott's campaign of FUD has succeeded in holding up the NBN for so long. Abbott's own perspective on telecommunications is so utterly anachronistic that it's almost not worth commenting on anymore. Abbott hates the NBN with such a passion that he's confirmed yet again this week that his government would likely cancel NBN Co contracts worth billions, absorbing untold punitive damages, just to keep Australia's broadband in its current wanting state.

Abbott feels the money could be better spent on major roads, hospitals and the like — but all this proves is that he (or, perhaps, his speech writers) can add. Heck, give me $36 billion and I'd have no trouble buying a few Barrier Reef islands and building a string of secret lairs from which to hatch evil plans for world domination. I'd probably have enough left over for a swish boat, or 10, and I could spend $6 billion finishing the Pacific Highway duplication just for good measure (never mind that the Federal Government has already promised $1 billion for the project and NSW's Liberal government is refusingto chip in).

Or, we could just spend the whole lot buying swimming pools and slippery dips for every house in Australia.

Yep, there are loads of things you can do with that much money — but unless Abbott is willing to lay down detailed alternative telecoms policies and commit to billions in infrastructure spending on the roads and hospitals he so loves to talk about — he is just blowing so much hot air. Abbott is only playing the if-I-won-the-lottery game with a few more zeroes stuck on the end. Coupled with his blindfolded pin-the-tail-on-the-policy approach to our telecommunications future, the Liberals' overall position on broadband is becoming little more than a carnival sideshow.

It's the telecoms equivalent of the aimless cigarette industry, which has taken to trying to fight plain packaging laws by banging on about pirated cigarettes harming our children; (I will not, here, delve into the double irony that Abbott refuses to reject funding from tobacco companies whose products waste billions of dollars of the taxpayer money he claims to be protecting by opposing the NBN).

Unless he's prepared to announce inviolable election commitments to reallocate that funding to specific road and hospital projects, Abbott is only playing the if-I-won-the-lottery game with a few more zeroes stuck on the end.

Meanwhile, Conroy's bloody-minded determination to make the NBN happen seems to have gained the respect of many within the industry he manages. Optus CEO Paul O'Sullivan, for one, was effusive in his praise for Conroy during his CeBIT keynote speech, commending him as "the most reformist communications minister since competition was introduced in 1992".

"I applaud him for creating the wholesale [NBN] network," O'Sullivan added. "I applaud him for finally grasping the thistle and looking at a regulatory framework whereby the incumbent would go through a proper separation regime in parallel with leading OECD economies globally ... Our minister has done a great job of catching us up and getting over many of the delays of the last 15 to 20 years."

His optimism was echoed by ex-Tasmanian Premier David Bartlett, who said "we got telecommunications wrong in this country 15 years ago with our deregulation model, and Conroy is doing absolutely the right thing in fixing that". Indeed, Conroy has become something of a folk hero in telecoms circles, this week taking out Global Telecoms Business magazine's award for "most significant personal contribution to telecommunications". And it's not the first award the senator has taken out for his NBN work; despite what the Opposition would have everybody believe, there must be something very good about the NBN.

Indeed, throughout the conference — which brought together thought leaders from every corner of Australia's IT industry — I heard from nobody who was seriously opposed to the project as a fundamental undertaking. I speak with a lot of vendors and suppliers and, while there are natural concerns about issues of cost and logistics, there seems to be a broad acceptance that — despite its logistical challenges — the NBN is a major step forward for our telecommunications infrastructure, and that it will shape the telecommunications industry's every move for the next 10 years and beyond.

So, if the overall direction of the NBN is all-systems-go, are the Liberals clinging to a morally correct opposition to the NBN, or just trashing the country's future in a sea of empty rhetoric and technological nihilism? Having been unable to derail the NBN directly, Abbott's Liberals have settled on a character assassination campaign trying to taint the project by association with Mike Quigley, who is being grilled over his position in Alcatel-Lucent, which was fined for offering bribes. Quigley may indeed have legitimate questions to answer when a hostile Senate Estimates committee convenes next week.

Meanwhile, Malcolm Turnbull continues to give ground on his fly-by-night anti-NBN campaign and is, philosophically, currently a hair's breadth from supporting it: he's now arguing that a fibre-to-the-node (FTTN) architecture is a better model and would deliver 60Mbps services. Turnbull's argument may be technically correct — iiNet pushed VDSL2 last-mile technology to 85Mbps back in 2008 — but he is hopelessly quiet on ideas about how a Liberal government would ensure access to Telstra's copper loop to make it happen, or how it would fix the parts of the network that are unsuitable for the technology. Reviewing Turnbull's string of anti-NBN arguments over the past 10 months is like looking at a whiteboard after a team brainstorm meeting — lots of scribblings, most with big red Xs through them.

If the government had offered to pay for installing Telstra pay-TV cable at every house in Australia for free 13 years ago, would there have been equal opposition?

The rest of the Liberal party isn't helping the situation: state representatives continue to rant against opt-out legislation as though it were a violation of Australians' civil rights to give them a free connection to a next-generation telecommunications network. If the government had offered to pay for installing Telstra pay-TV cable at every house in Australia for free 13 years ago, would there have been equal opposition?

Rubber, meet road. These issues go to the heart of what's wrong with the Liberals' anti-NBN campaign: while they're quite happy to blast the government at every turn, they've done precious little to bolster arguments about why the NBN is a bad thing. You know, other than that it's really expensive, and that Labor is building it. This stuff might have played well around election time, but growing momentum behind the actual NBN roll-out — and what seems by all accounts to be an increasingly positive, future-focused community excited about its possibilities — is making Abbott's contrarian Liberals seem more and more desperate every day.

The one-eyed pessimism has created a heavily politicised debate that has been is likely to cause major problems for the raving party faithful in the long term.

Fast-forward five years, and I'll bet tens of thousands of homeowners in NSW, Victoria and elsewhere will be spitting chips because they have to pay hundreds of dollars for NBN Co to install a connection that was previously offered to them for free — but which they rabidly refused because their Liberal party leaders told them to.

The situation is so bad that a former US presidential advisor on broadband policy warned continuing disagreement could end up costing Australia billions — not to mention delaying the NBN Co/Telstra agreement even more than it already has. These are the sorts of consequences the Liberals can expect from their ongoing blind opposition to the NBN, which may serve their own interests but can hardly be said to be serving the interests of their constituents.

The fact is that it's Telstra, and not the Liberals, that has proved to be Conroy's most powerful nemesis. Despite his early threats to block Telstra's access to 4G spectrum auctions and force its divestiture from Foxtel if it didn't separate, we now have a Telstra that's switching on 4G services; pushing Foxtel for an acquisition of Austar; stalled the NBN; and still has not taken one step towards separation.

Conroy is now staring down his biggest challenge to date: getting Telstra to sign the reportedly 2000-page contract on the dotted line so the NBN can start its roll-out apace. Reports suggest we are days away from a conclusion to this drama, and a signing date before the end of the fiscal year would seem a tidy resolution — as long as the negotiators don't collapse first.

Once that signing happens and the NBN roll-out starts in earnest, consensus — even, by some reports, from Turnbull — is that the project will be all but unstoppable. And for all their empty rhetoric, the Liberals may eventually need to consider accepting that despite their efforts, their job is no longer to stop the NBN but to see that it's done correctly. And that, for all the love Conroy has been feeling recently, will be his biggest legacy.

What do you think? Can Conroy and NBN Co drag Telstra over the line? And will there come a time when even Tony Abbott's Liberals have to concede NBN defeat?

Editorial standards