The Coalition’s NBN – a huge waste of money

Despite his earlier fervent opposition and having voted very strongly against the National Broadband Network (NBN) under Labor, in recent times Federal Member for Bowman, Andrew Laming, has become something of an NBN evangelist, wildly spruiking the Coalition’s ‘Fast, Affordable, Sooner’ claims.
I count no less than ten articles in local press over the past year, something of a turnaround for someone who once described the NBN as ‘a great white elephant’. But just how do Laming’s and the Coalition’s recent claims stand up to scrutiny?

Sooner?

The Coalition went to the last election promising all Australians would have access to 25 megabits per second (Mbps) download speeds by 2016. Malcolm Turnbull’s ‘Multi-Technology Mix’, it was claimed, would deliver broadband to Australia ‘Fast, Affordable, Sooner’.
In December Laming claimed that 46% of Redlands would be able to use pay-TV (HFC) cable and Fibre to the Node (FTTN) to access high-speed broadband in 2015 with speeds of up to 200 Mbps but speaking at a Redland Chamber of Commerce meeting last week, NBNCo Manager of Government Relations, Justin Jarvis, said the now 2017 timeframe for the Redlands depended on a range of “unforeseen factors”.
One of these ‘unforseen factors’ may be that NBNCo simply does not have enough people. NBN Boss Bill Morrow recently told The Australian’s Beyond the Boardroom series that “If I look over the next two or three years, we have a shortage of about 4000 people and I don’t know where we’re going to get them to be able to do this at this point without launching a massive retraining program to move people from other industries to come in.”
The 2016 commitment it seems is long forgotten, 2017 looking somewhat shaky and Laming’s 2015 cable revolution dead, buried, cremated…

Fast?

Under Labor the initial Fibre to the Premises (FTTP )broadband plan, believed by many in technology circles to be the only ‘real’ NBN, would have connected 93% of Australia with optical fibre. The advantages of FTTP over the Coalition’s botched Multi-Technology Mix adventure are clear – FTTP connections would have initially delivered 1000/400 Mbps whereas the Coalition’s NBN will be lucky to reach their guaranteed 25/5, never mind Laming’s fanciful 200 Mbps claims.
Furthermore, based on existing and badly degrading copper, both HFC and FTTN networks are not only heavily affected by demand, usage of the network, distance from the exchange or nodes, but also environmental factors such as wind and rain. Despite their more recent claims, in 2003 Telstra’s then manager of regulatory strategy, Tony Warren, told a Senate enquiry, Telstra’s 100 year old copper network was at “five minutes to midnight”. With Telstra having happily handed off this problem to NBNCo for a tidy sum, the costs of maintaining the crumbling copper network have been estimated at up to $1Bn a year. Hardly good value.
Future speeds under Labor’s FTTP NBN would have been limited only by the technology developments at each end of the cable. With current technology, fibre networks can already reach Terabits per second. Once built, Labor’s FTTP NBN would have lasted generations. The Coalition’s NBN is unlikely to be able to keep up with demand and technology for a decade.
In May, Laming claimed that parts of Redland Bay and Mt Cotton would be connected to the NBN with speeds of 25-100 Mbps. This does not, however, stack up with the latest Draft Wholesale Broadband Agreement which clearly states that FTTN speeds will be limited to 12/1 Mbps while transitioning from ADSL which begs the question of precisely what advance we are making here?

Cost

Having spent years making large of the cost of Labor’s NBN network, the Coalition’s ‘affordable’ claim deserves some attention. The Coalition went to the last election with ludicrous claims that Labor’s NBN would cost $90Bn. In fact, Labor’s NBN was costed by KPMG-McKinsey and Analysis Mason twice, with the net cost found to be zero. This was based on the Government using Australia’s AAA credit rating to borrow $27Bn and the network paying for itself in at least 4 different ways in cost savings to existing infrastructure, health and power generation. Malcolm Turnbull’s Parliamentary Secretary Minister Paul Fletcher has more recently admitted that Labor’s NBN was costed by NBNCo internally at $56Bn and that the $90Bn scare campaign were ‘perhaps a little high’?. A little?
The Coalition’s wildly optimistic claims that the FTTN network would cost less than two thirds that of the FTTP network were also based on overseas examples where the incumbent telco already owned the network. The Coalition’s business model however will pay full commercial value for Telstra’s network making it one of the world’s most expensive FTTN networks.
In comparison the Coaltion’s FTTN NBN, which is unlikely to see out the next decade, is a short-term waste of money.

Environmental impacts

Under Labor’s NBN smart-grid technologies would have enabled more efficient power networks, resulting in significant power savings whereas, according to Melbourne University’s Rod Tucker, the proposed mix of VDSL and wireless technologies requires so much power that Australia will need to build 2-3 new small power stations to make it work. Good thing we’ve got all that coal…

The Spin

Despite all of these facts, it would appear Laming is intent on continuing to make all manner of claims he neither understands nor can back up. I expect this cyclone of misinformation to only increase as we creep towards the next election.
One of Laming’s most galling recent claims has been that the effective rebranding or assumption of the existing Telstra & Optus HFC cable network to ‘NBN’ is something new, something faster, something better. The harsh reality of the Coalition’s NBN plan is that if you have HFC cable in your suburb today, that is all you are ever going to have, so get used to that Friday-night Netflix fallover. And frankly, even if the cable handover were something new, is 46% of the Redlands connected something to shout from the treetops? What of the other 54%? What of the residents of Thornlands who have no connections at all or the Wellington Point residents who have had to take to Facebook to get their message through to Laming?
Laming also recently claimed that speeds of up to 91Mbps promised under the July rollout across the Redlands “Those speeds would enable a premises to stream up to 18 high definition Netflix streams simultaneously, or other bandwidth intensive applications such as online learning and telehealth consultations.” In fact this technology is already obsolete. Despite the wide availability of 4K TV’s in Australia, delivery of 4K content is up in the air. As NBNCo’s Tony Brown notes, “It is quite possible that an end user subscribing to a service over the NBN on a 100 Mbps fibre to the premise (FTTP) connection could still have significant problems streaming 4KTV video – or even HD video for that matter.” Somewhat at odds with Laming’s eighteen simultaneous Netflix HD stream over FTTN/HFC claims.
So where does this leave us? With Australia currently ranked 44th in the world in terms of broadband speeds and sliding rapidly, it appears the ‘Infrastructure Prime Minister’ is throwing Australia’s IT, creative, entertainment, health, power and other industries dependent on broadband communications, under the bus. A very expensive and rusty bus.
With the NBN under the Coalition in complete disarray it’s high time we heard from Labor precisely what they are going to do to rectify things should they regain Government at the next election.

Damien Buckley – 26 July 2015

Web Developer and Technologist Damien Buckley has operated multiple-­award-­winning digital agency, Propeller Graphic Design & Marketing with Wife Renee in the Redlands since 2004. In addition to numerous Australian and International Corporate websites, Propeller are responsible for well-­known local websites such as Stradbroke Ferries, RedFest and Karen Williams’ Mayoral Campaign website.