John Menadue. Malcolm Turnbull and the NBN mess

Nov 3, 2015

As Minister for Communications Malcolm Turnbull had two major responsibilities. They were the public broadcasters, ABC and SBS, and the NBN.

As I pointed out in an earlier post, the ABC needs rebuilding after the harsh budget cuts and termination of the Australian Network contract while Malcolm Turnbull was the minister.

The plight of the NBN is much more serious. Consider comments by people who have followed this issue very closely.

In this blog on 10 September 2015, headed ‘The NBN; why it’s slow, expensive and obsolete’, Rod Tucker, Laureate Emeritus Professor at the University of Melbourne said

‘The Coalition sold the public a product that was supposed to be fast, one third the cost and arrive sooner than what Labor was offering us. Instead the Coalition’s NBN will be so slow it will be obsolete by the time it’s in place, it will cost about the same as Labor’s fibre to the premises NBN and it won’t arrive on our doorstep much sooner. By my reckoning we didn’t get a good deal

In The Conversation on 15 September 2015, Rod Tucker commented further:

Under Turnbull, the NBN budget has blown out as much as $A18 billion and on current projections is four years behind the original schedule. Worse still, additional funding to help cover the cost blow-out will need to be obtained from outside sources. This could be difficult given that the fibre-to-the-node (FTTN) technology to be rolled out will soon be obsolete and will not be attractive to an investor looking for a reasonable long-term return on investment. This problem is just one of many that the incoming Communications Minister is going to have to solve. … Broadband customers Atlanta, for example, now have the choice of between 1 Gbps connections with Google or 2 Gbps symmetrical (upstream and downstream) services with Comcast. The NBN’s FTTN service will be 20 to 40 times slowed than Comcast. … These are just some of the things that need to be done to help get the NBN back on track. Let’s hope that Turnbull picks a successor who is up to the task. It’s not too late to fix the NBN but time is running out.’ 

Renai LeMay in on 14 November 2015 pulled no punches

‘I was present at Turnbull’s very first press conference after Abbott appointed him as the new Shadow Communications Minister five years ago in 2010. And today, I was in parliament house in Canberra as Turnbull announced his challenge. I have borne witness to every step Turnbull has made along the way in the portfolio over the last five years. So let me be the first to say it. And I’ll say it loud and clear. Malcolm Turnbull has been an absolutely terrible Communications Minister. … The strength of the [ALP] policy was always that it would have laid the foundation for the next century of world-class telecommunications infrastructure in this country, fuelling the development of a massive digital economy and better health, education, business and social outcomes. Along the way it would also have completely broken Telstra’s stranglehold on market competition. Turnbull’s appalling multi-technology mix approach to the NBN, will in sharp contrast, set Australia significantly back. The policy will result in massive cash windfalls to the likes of Telstra and Optus, allowing Australia’s two major telcos to offload their outdated copper and HFC cable infrastructure at a premium cost to the taxpayer. Meanwhile, that same taxpayer will face a legacy of decades of technical failures stemming from Turnbull’s insistence that copper cables and 25 Mbps speeds are good enough for Australia’s broadband needs.’ 

On 29 September 2015, Paul Budde in BuddeBlog said

‘As we predicted when the government changed its plans for the NBN, this would take, not the six months indicated by the minister, but at least two-three years. So in all we have lost at least another two years. During that time the OPEX costs of the company continued, as well as significant extra costs in political reviews, consultancy reports, new designs, pilots and so on – all of these costs eating into a limited budget that, in the case of government funds, will start to run out in 18 months time. On top of that NBN Co also faces a skill shortage, so it has plenty of headaches ahead. … When the NBN was launched in 2009 one of the goals was to get the country into the top ten of the international ladder. Now in 2015 we have dropped to the 42nd position. … With the rest of the world now clearly moving towards FTTH Australia is set to linger on the bottom of the international ladder for many years to come, … if we want to be competitive in our Asian and globalised market we will need to lift our digital profile among our trading partners, and the NBN is key in that. We shouldn’t stop at the already out of date multi-mix technologies. These should be extended as soon as possible to a fully blown FTTH network in line with what other developed nations are building.’ 

In this blog on 2 November 2015 Mark Gregory, a senior lecturer in the School of Electrical and Computer Engineering at RMIT University said

‘The malaise that the telecommunications industry finds itself in has been exacerbated by the efforts of the Prime Minister Malcolm Turnbull who, as the Minister for Communications, spent two years doing very little whilst telling everyone that he was on the cusp of finding solutions for a variety of problems besetting the industry. … The decision by the Coalition government that was implemented by Turnbull in 2013, to adopt the obsolete FTTN technology for a significant percentage of the NBN will, in future years be seen as economic madness. … In what is likely to be the greatest con in Australian history, the government promised that the NBN would be completed at the end of 2016 and it would be built for $29.5 b. The latest projections from NBN Co indicate the NBN should be completed in 2020 or possibly later and the cost for Turnbull’s MTM approach will now be at least $56 b. … [The NBN] is likely to be the most expensive lemon in Australian history that was to be built with an impossible deadline as was widely pointed out by industry and academia at the time.’ 

Can the new Minister for Communications, Mitch Fifield, get us back on track? It is going to be very hard. A major problem will be to unscramble the fibre-to-the-node contracts that have been let.

Malcolm Turnbull has left us with an awful mess. It would almost seem that the NBN was set up to fail.


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