Mark Gregory. Turnbull’s NBN Mess

Jan 12, 2016

It has been an inauspicious beginning to 2016 for NBN Co and the year only promises to go from bad to worse as the rest of the world moves ahead with NG-PON2 Fibre to the Premises (FTTP) rollouts and Australians slowly realise that the spin from Turnbull about how his NBN was going to be fast, affordable and here sooner is nothing more than a bad joke.

If you’re a critic of the Prime Minister Malcolm Turnbull’s Multi-Technology Mix (MTM) National Broadband Network (NBN) then you’ll have to get in line to be heard as there is going to be a constant stream of criticism about how Turnbull’s MTM NBN provides slow connections that are fraught with technical problems, suffers from poor performance, does not have enough capacity and has hobbled Australians with nothing more than basic broadband at significantly higher prices than what is paid in other countries competing for the global digital economy dollar.

And yes it is time that we acknowledge Turnbull’s ownership of the MTM NBN mess, and the broader malaise that beset the telecommunications industry during his tenure as Minister for Communications. Backhaul prices between 100 to 200 times higher than in competing countries, data retention fiasco, legislative and regulatory black holes including the perennial favourite that is mandatory data breach reporting.

To make matters worse Turnbull appears to be listening to people that definitely had too much Kool Aid in 2015 and rather than fix the telecommunications market mess he appears to be pushing for the Australian Competition and Consumer Commission (ACCC) to be stripped of its monopoly infrastructure regulation role. Now if this gem actually appears in legislation it will akin to the silly idea to raise the Goods and Services Tax to 15 per cent rather than address the underlying problems with the taxation system, for example, getting the multi-nationals to pay a fair amount of tax on turnover in Australia would be a good start. And we can all remember the Coalition telling us at the 2013 election how they would have the budget back in the black in the blink of an eye.

What is of immediate concern is the question why NBN Co, a government business enterprise, has adopted such a negative, defensive and at times openly adversarial position. NBN Co needs to look carefully at how its senior managers use social media and to ensure they do not appear to be taking a partisan position in the debate about the merits or otherwise of Turnbull’s MTM NBN.

Yes, there is a debate and at this point the government is doing a sterling job of stonewalling the media, redacting where-ever possible anything that might provide information about what is actually occurring at NBN Co and using the get out of gaol card that is “commercial in confidence” at any whiff of a question about the NBN.

It is expected that there will be some rough and tumble along the way. The NBN debate commenced in 2009 with the Labor government’s decision to intervene in the telecommunication industry and went into overdrive in 2013 with the Coalition government’s decision to vandalise the NBN by re-introducing obsolete copper technologies.

Both sides of politics have sought to use the NBN for political advantage rather than seeing the NBN as a nation building project vital for the nation’s future as a leader in the global digital economy. Along the way politicians have been forthright in their public criticism of anyone that disagrees with their views or statements. It is not for a politician to worry about being technically accurate and you’ll be “foolish” if you call them out for reinventing established science.

It is vital that NBN Co be a passive participant in the NBN debate and remain open to answering questions from the media and academia. Failure to be responsive to the media and academia will lead to more leaks from within NBN Co, an increase in the number of disgruntled employees and inevitably increased criticism in the public domain.

2016 will be a tough year for NBN Co and it will be important to offset the growing realisation that over a ten-year period the copper access network technologies will cost far more than what the cost for an all-fibre access network would have been. Over the typical ten to fifteen-year life-time of a fixed access network technology the cost for the copper access network component of the NBN will be tens of billions more than the cost of overbuilding and operating an all-fibre access network.

So we should expect an announcement in early February that the Connectivity Virtual Circuit (CVC) charge is to be reduced from $17.50 per Mbps per month to $15 per Mbps per month effective in from 1 June. This will give the embattled NBN Co something to spruik about in the lead-up to the Federal election and of course, the Minister for Communications and the Arts Mitch Fifield will be out and about telling all and sundry how the price reduction is a direct result of the government’s MTM NBN approach.

And most of us would have thought it was because of the ongoing data usage explosion brought about by NetFlix entering the Australian market and opening the door to improved low cost media streaming services. And as we know the silly sausages at NetFlix were anticipating the Australian broadband network to progressively become all-fibre thereby making the delivery of high quality video possible. Oh well, the fuzz that we see around anything moving faster than a snail isn’t really so bad after all is it?

But there will be no getting around the rollout problems for NBN Co and the need to push people living on the urban fringe that currently enjoy ADSL onto fixed wireless or in some cases onto satellite. It’s all about the science of why Fibre to the Node (FTTN) is a second rate obsolete technology that was never going to adequately cover the existing ADSL footprint.

At least the genie is out of the bottle regarding the furphy that the MTM NBN would be completed sooner than the originally planned NBN. The NBN was always going to be completed, whether it is or not, by mid-2020 so that its future can be determined by whomever is in government at the time. NBN Co’s future appears to be either sale as a single entity or as a number of disaggregated networks.

This year NBN Co will need to step-up the rollout significantly, if for no other reason than to head-off what would be very bad news for the government in the lead-up to the Federal election. And as more FTTN is rolled out there will be a slow but steady growth in the criticism of FTTN performance and a key facet of the public face of NBN Co in 2016 will be diverting attention onto more positive outcomes.

What would throw a spanner in NBN Co’s wheel would be one of the many councils around Australia that own and operate telecommunications networks deciding to rollout FTTP in the high value business centres and inner urban areas within their municipal boundaries. As municipalities in the US have found, it is a good business decision to extend their existing telecommunication capability because not only will FTTP bring in much needed revenue but the council will be able to rollout machine to machine communications (see the Internet of Things) and offer free Wi-Fi without becoming beholden to a Telco.

2016 promises to be a very big year for the NBN, especially with the first satellite coming online, and the management team at NBN Co will be well aware that any mis-steps will not be welcome news to a government that wants to wash its hands of the NBN as quickly as possible.

Mark Gregory is Senior Lecturer, School of Engineering, RMIT University. He is Managing Editor, Australian Journal of Telecommunications in the Digital Economy, and Managing Editor, International Journal of Information, Communication, Technology and Applications.

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