Here comes Abbott’s #NBN, by @SteveJ_CBR and @sortius

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Margo: Steve Jenkin and Kieran Cummings are regular contributors to No Fibs on the NBN. Here are their takes on its future under an Abbott Government.

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‘NBN Lite’ won’t happen, but served its purpose to take NBN off election agenda

Steve Jenkin

1 September 2013

To win the NBN Debate, Malcolm Turnbull only needed to convince the media that he had an NBN Plan that was acceptable to the great unwashed and was roughly the same as the Real NBN.

To do this he had to cast serious doubt on the NBN Co budget and ability to execute, and to confuse/conflate the critical questions so media never asked them:

  • Lifetime on-budget spending of both Proposals.
  • Lifetime Rate of Return from Equity
  • Pay-back Period of Government Equity
  • Downside Risks

Turnbull succeeded on 10-April when Alan Kohler announced “How Turnbull Saved the NBN” summed up as:

Malcolm Turnbull, with the help of the polls, has turned the Liberals into an NBN party. His plan isn’t perfect, but it’s better than dismantling the whole thing, …

After that, the mainstream media assumed that line and most ‘analyses’ uncritically accepted the unverified, unchecked Coalition figures as truth.

The ALP failed to counter this strategy, even under Conroy. Noticeably, they failed to ask Turnbull the central questions above and have the media, and so the electorate, question the fate of an NBN under the Coalition.

It’s now too late for them to put the fate of the NBN back on the election agenda. The only thing we can believe in everything that Turnbull has said and written is that they will commission three ‘reviews’ to report within 60 days. These will be headed by hand-picked high-profile Liberals, exactly as Peter Costello was brought in for Campbell Newman of Queensland’s ‘Commission of Audit’n(CoA).

Just like Newman’s CoA, the three NBN reviews will produce NO surprises. They are designed to:

  • Underscore and ‘prove’ the ‘Worst Government Ever‘ rhetoric.
    • All intentional economic destruction resulting from Liberal actions will be blamed on Labor, and
    • as things get worse, even dire, the Liberals will trumpet ‘Labor put you in this hole, aren’t you glad we’re saving you! We came along in the nick of time!’
  • ‘Demonstrate’ a complete failure of Governance under Labor.
  • Assign blame and considerable opprobrium to the individual Labor actors.
  • Reinforce the ‘Great Big Useless White Elephant’ view.
  • Make ‘official’ the unsubstantiated claims that it ‘will cost over $100 billion to finish”, and
  • Concoct an official Cost Benefit Analysis that ‘proves’
    • a Fibre NBN is not “Cost Effective”
    • that the only NBN build that can provide an economic benefit is based on existing HFC & phone-line copper assets, with small amounts of “remediation”, and
    • that as these assets are in private hands, that the NBN can only be built “Cost Effectively” by the private sector.
  • Turnbull can then be the wise business investor who ‘saves us from a $100 billion disaster’ by liquidating NBN Co and giving away its assets to the private sector.

    He might run supply and construction contracts to completion, or invoke force majeur clauses, or just wind-up the company, leaving the creditors to duke it out [Telstra wins]. Telstra and Optus, as the major creditors, would trade their future contract payments “at a substantial discount” for the NBN Co assets. Optus may take a one-time payment from Telstra. Telstra will abide by its Structural Separation Undertaking and keep NBN Co as a separate, but controlled, entity.

    The Australian Competition and Consumer Commission won’t have much to say because the legislation and regulations controlling it, and the Telecommunications sector in particular, will be changed to support consumer choice and diversity of suppliers, creating real competition’, meaning Telstra will once again control both the wholesale and retail markets.

    Welcome to the Brave New World brought to you by Malcolm Turnbull. Does he, or any Liberal, regret this deliberate destruction of National Assets? Will they have any pangs or twinges of conscience over deliberately destroying Australian national productivity P
    and making Australian business internationally uncompetitive for the next 50 years.

    No! Turnbull is a gun for hire and has ‘won the argument’ as he was asked to do. The consequences are for others to suffer.[/dropshadowbox]

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    Coaltion NBN Policy – Post Election

    By Kieran Cummings

    1 September 2013

    I decided to write a post on what I think will happen if the ALP lose the coming election & the LNP take over the NBN.

    The Swami

    To start off with, it’s clear that there are no solid plans for an election victory. Everything hinges on 3 separate review processes. Something I think will take time to complete. I’m not going to project 100 days, as this is too short for these reviews to complete.

    If we look to Queensland and what Newman did with the Queensland Commission of Audit, I think we can get some idea of the time it will take to complete the 3 reviews. It took more than 12 months to complete and release a government response.

    I’d suspect that the first thing an Abbott government would do is reshuffle Turnbull to either the backbench (political suicide) or to Environment or something like that again. I’d say someone like Robb will be given Comms, as he’s struggling with Treasury.

    I Give It 1 Star David

    Strategic Review

    The Coalition’s estimate of 60 days for a strategic review that looks into not only the current plan, but alternatives is laughable. It took multiple panels, committees, & so forth, two years to complete the recommendation for the current NBN, how an alternative will be found in 60 days is beyond me.

    This is the first hurdle, and I feel this could take anything from 6 to 12 months conservatively. Much of the information is already there, it’s just about crunching the numbers & finding new evidence to support inferior plans. NBN Co don’t have the staff or funds to dedicate a whole business unit to this, so there is little doubt it will take time.

    Independent Audit of Policy & Governance

    Costello

    Costello will be the man charged with destroying the NBN by review.

    The next step is the ‘independent audit’. This puzzles me, it’s almost like the LNP want to dig through the legislation to ensure that it is changed to benefit specific parties (I’m thinking Telstra & Murdoch).

    The terms of reference look at attacking the root reasons as to why the NBN was created & why the fibre target is 93% of premises. Almost like if reasons are for the audit is to remove a reason to roll out an NBN. Is the LNP overtly telling us they intend to keep a get-out-of-gaol-free card so they can axe the project? Seems that way to me.

    Cost Benefit Analysis

    This is probably the weirdest part of their policy, as CBAs are well known to ignore societal benefits of massive infrastructure projects, especially when they are government mandated. Much of the data is already available via NBN Co’s corporate plan that is continually revised. A CBA will merely give us the bastard’s snapshot of a company, not a true overview of what impact the project will have.

    This can be little things like being able to call your parents without drop-outs via video chat, or it can be life changing things like being able to interact with more than your carer & not be judged for your disability. How do you put a value on that? Is one housebound person being able to interact with the outside world worth $1 or $1b? I bet if you asked the housebound person the latter wouldn’t even cover it.

    Tick Tock, Post Election Clock

    Eternal Clock

    The key here is that these reviews will take time, a lot of time. I doubt a single node will be installed before mid 2015, as the reviews not only have to be completed, but the responses formulated & legislation drawn up. This is all without any negotiation with Telstra.

    Telstra is going to be the biggie. They have a huge team of lawyers, they know what their network is worth ($33 billion) & you can bet they won’t let go of it for anything under value. Looking at how long it took NBN Co to get access to Telstra plant (pits, pipes, & lead-ins), an agonising 9 months, we can expect negotiations for the copper network will take longer, anything from 12 to 18 months is my guess.

    Back To The Future

    With time running out on the mid 2017 target for 5.1m homes to be connected to whatever technology will be at play, there are few options left. With so much not planned, I’m going to give the LNP 18 months to complete the mid 2017 target. If the crews work 5 days a week that’s 13000 premises connected per day, or 1600 premises per hour connected to whatever technology.

    There are literally not enough technicians, engineers, contractors, & manufacturers in Australia to complete this task. I’d say they’d struggle to complete 1600 installs a day, let alone 13000. No doubt the reviews will pick this up & recommend against FTTN due to the time it will take to install 5.1m lines.

    So what will happen? You guessed it! The project will be scrapped in its current form completely. Possibly the LNP will keep NBN Co alive long enough to complete the 22% fibre footprint that’s in the policy, then again, there will be enough leeway from all the reviews to cancel contracts I think.

    There Can Be Only One

    HighlanderLambert

    In true LNP tradition, I suspect that the first thing they will do is hand the money to Telstra. Just grab $30b of public debt, hand it to Telstra & say “build wireless”. It’s not an earth shattering revelation, Hockey made it clear he thinks wireless is the future, the Young Libs have been spreading FUD on social media about fibre being outdated by wireless “in 2 years”.

    It all leads me to believe there is no intention to offer wireline access to Australians. Turnbull himself made clear that FTTN is only a suggestion & the real technology that will be used is yet to be determined. So all the arguments about FTTN being the right technology are as hollow as the background document supporting the policy.

    We will not get anything like the network suggested in the policy, & to me, that’s wholesale fraud.

    The reason why I think Telstra will be handed money to build wireless is fairly simple: it is physically impossible to build a wireline network to 5.1m people in just 18 months in Australia. The ONLY way to deploy a network that quickly is to have most of it already built & just increase the capacity slightly: Telstra’s 3G/LTE network.

    This hits the mark on all Turnbull’s current claims:

    • 25Mbps minimum (even though actual speeds can be under 1Mbps)
    • 100/40Mbps at 400m (Category 4 devices are capable of 150Mbps/51Mbps, but rarely reach this)
    • Cheaper than FTTP (because it’s already built)
    • Sooner than FTTP (again, already built)

    Howard & Costello

    It’ll be like they never left us, except it’l be Abbott & Costello. Wait, where have I heard that before?

    Ok, so many will not believe this is possible until it happens. The LNP are notorious for fucking over comms. Telstra went to the Howard government no less than 3 times with plans to upgrade Australia’s telecommunication network, 3 times the Howard government rejected them.

    At one stage Coonan had no room to move, so just threw her hands up & basically said “we don’t want to do it because we don’t want to do it”. There’s no need for the reviews, & with the NBN sliding in what matters to voters, I doubt there will be any depth to them. If anything, they’ll be expensive excursions that take longer than expected & add no value to the government’s communications portfolio.

    My cynicism may be taking over, but I have no faith in Turnbull, Abbott, or any of the other technologically illiterate frontbench mates of Abbott to continue the NBN as is, or even as their policy describes.

    If it’s not on the 6 point plan, can we assume the NBN is a non-core promise?

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    Comments

    1. Malcolm Scott says:

      The author overlooks the current state situation with NBN. The project is horribly over budget for earned value, is very much behind schedule, the company is lacking management leadership, and the board seems to have lost control of the commercial risk. NBN project as currently planned is a financial disaster in the making. No matter whether $10 billion or many $10s of billions over budget to complete, the borrowed money might be better spent elsewhere, or not borrowed/spent at all. The overspend could build a very fast train system, or it could fully fund the CAPEX for a 100% renewable energy plan.

      There is no reason to believe that Turnbull will be other than very pragmatic about the least cost way to achieve the performance specification the Coalition has committed to. This is a sensible approach, and is what any sensible project manager would do.

      PS. If it was not for the Labour Government, most of the nation would already have a reasonable basic broadband service provided by both government contract for rural and regional Australia, and commercial investments would have achieve the rest. It would have provided the competition that is sadly lacking today, and will remain so with a NBN first right monopoly on fibre access.

      The time has well passed where the NBN sales brochure is still the project plan


      • “If it was not for the Labour Government, most of the nation would already have a reasonable basic broadband service provided by both government contract for rural and regional Australia, and commercial investments would have achieve the rest.”
        WTF! If Howard hadn’t sold a fattened calf to the Australian electorate in the form of the T1, T2 and T3 fleecings, then Telstra would have done what it has always done in it’s various government owned guises over the decades. Built the FTTP network on it’s own and it would have been done by now.


    2. “If it was not for the Labour Government, most of the nation would already have a reasonable basic broadband service provided by both government contract for rural and regional Australia, and commercial investments would have achieve the rest.”

      Dreaming…

      Both the house I’m in now and the last one have lousy internet because the exchange is too far away. No amount of competition is going to fix that because in Australia there isn’t competition on the delivery. Mobile is too slow and too expensive – tried to get internet in an airport? That is what it would be like with a suburb on wireless.

      So how does the Government provide a ‘basic broadband service … for rural and regional Australia”? They build a fricken NBN, and they also build it in the cities cause those users can help subsidise the rural and regionals ones.

      “horribly over budget for earned value” …. how much?

      “is very much behind schedule” … how far behind?

      The Labor is incompetent and everything they do is a disaster meme, e.g. “the NBN sales brochure is still the project plan”, is tiresome when it is just assertion without fact. The truth is the Libs have no form on these projects. They don’t start them, the sell them. There is nothing to suggest they can carry this through. They will be looking to offload the NBN ASAP and we’ll be set back a few years.

    3. Geoffrey Payne says:

      I hope the Laborites (& all others) focus on this issue heavily this week. This is the most important reform for Australia in the 21st century, wealth producing for our kids,grandkids and their kids too. I hope Australians forget about personalities and see the logic of Fibre To The Home (Premises).

      My interest is Railways & they began back in 1850 (in Australia) with a similar political debate, vested interests delayed construction, cost was always an issue and they are still being built today, so time is not an overarching factor for Fibre NBN although very important.

      Just a nitpick for No Fibs, the formatting of the articles has cut off some of the text on the right hand side, some people may not persevere to read.

      This method of delivering Technologies (Fibre) will last for a very long time and produce wealth for all Australians.


    4. As stated above the Libs made the big mistake as far as the average punter is concerned and sold of Telstra infrastructure to their corporate mates. Had this infrastructure been set aside in the Telstra sell off during the great fire sale of the Howard years it would not be a problem and the NBN would be well and truly on it’s way to completion. Labor deserves to lose this election and I for one have sent a letter to my Union asking that they put a stop to funding this electoral road to nowhere, or at least pull the Labor Party and advisors up and ask for a damn good explanation of what they are/were thinking.

    5. Robert McKenzie says:

      “If it was (sic) not for the Labour (sic) Government, most of the nation would already have a reasonable basic broadband…”

      Huh? The coalition did nothing for twelve years, and the present government started the NBN.

      If it were not for the Labor government, broadband in Australia would still be where it was in 1996.

      • Malcolm Scott says:

        Not correct Robert.

        If Labor had decided to work with the Opel contract rather than be an adversarial customer, rural and regional Australia would already be using a basic broadband service using WiMAX, ADSL2+ and satellite at metro prices, similar in service performance to urban broadband services provided today by commercial suppliers. The unilateral cancellation Apr 2008 over coverage was strongly criticised by Optus as a flawed analysis. There was no substantial attempt by government to resolve this difference between what Opel considered with compliant and the analysis the government was using.

        The government of the day was instead keen on its FTTN proposal which would have had coverage overlap with the Opel contract. If Opel had been proceeded with by government, then a much more competitive environment would exist today.

        And we all know where Labor’s FTTN RFT ended up. For ideological reasons and childish ‘man-up’ big dick behaviour by Mr Rudd, we are now all paying the cost for an excessively expensive and late to market solution that creates another monopoly that requires special ACCC oversight and directives.


    6. When I was a young apprentice my boss, the owner of the business, a tradesman who became a self-made man offered this bit of advice.
      “You’ll find twenty people to naysay on any project, always listen to the one who suggests why the hell not.”

      Dr Vint Cerf, along with a team of scientists “invented” the internet in the 1970s. He has been awarded the US National Medal of Technology, the Turing Award for Computer Science and is a member of the National Academy of Engineering has said recently:

      “I am so envious that you have a government that is willing to make the long term infrastructure investment of this magnitude and of this type [in the NBN]. I will be pushing very hard for similar activities in the US but quite frankly you guys are way ahead of us…I consider this to be a stunning investment in infrastructure that in my view will have very long-term benefit. Infrastructure is all about enabling things and I see Australia is trying to enable innovation.”

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