Turnbull Wants To ‘Set The NBN Free’

Turnbull Wants To ‘Set The NBN Free’

The Coalition is anti-NBN, right? If you listen to Tony Abbott, maybe so — he’s apparently more about the highway than the information highway. But if you listen to Malcolm Turnbull, not at all — although predictably he’s very against the current government’s approach to the NBN.

In a speech at Broadband World Forum Asia, Turnbull repeated the more recent Coalition mantra: namely that it’s not anti-NBN at all. That seems to me to be more a case of politics than policy. I suspect that the Coalition has realised that the support for the NBN is somewhat wider than it had first anticipated, and being seen as stubbornly anti-NBN might actually cost some votes.

Turnbull’s speech relates (mostly) to the broadband scene in Asia, which makes sense given the audience he would have been addressing. There’s an interesting admission right at the start relating to the errors surrounding the creation and sell-off of Telstra, where Turnbull admits that “both sides of politics” contributed to the creation of the monolith problem: firstly by merging domestic and international carriers to create Telstra, then by allowing Telstra to enter the Pay-TV market, and finally by selling Telstra off as a completed entity.

Turnbull notes that many argue the final step was the worst mistake made, but he believes that it was allowing Telstra to enter the Pay-TV market that was the more serious error, because… well, actually his point here is a little muddled, and I’m not sure I get it.

He’s anti-Telstra rolling out HFC in competition to Optus, because he figures that HFC networks shouldn’t be owned by telcos — but in that case, what is Optus, exactly? And how does that differ from the general thrust of his speech that he wants to “set the NBN free”, and that competition is a good thing and a necessary driver of market growth?

I suspect he’s happy enough to say that mistakes were made across both sides of politics because the potential damage is low; this is history, after all, not current affairs.

There’s one area of comparison to Asia where I reckon Turnbull’s analogy falls over, and it’s in the price arena. In relation to Malaysia, he says that

“Telecos everywhere struggle to persuade consumers to pay a premium for superfast broadband.”

Well, yes, they do, but only if the prices are actually higher. It is, in essence repeating the Coalition mantra that prices under the NBN will automatically be higher. So far, it’s simply not so; the vast majority of available NBN plans from providers are generally equitable with their ADSL counterparts for faster connections, and that’s without a full scale rollout and an entire market to compete for. Even if it were true, I’m not quite sure how Turnbull’s later plans for a Coalition NBN wouldn’t face the same problems.

Turnbull’s position — which he labels every once in a while as an NBN, because, again, I suspect he sees votes in being seen to be broadly “pro NBN” — is essentially one that calls for a mix of technologies to:

“…be technologically agnostic – there will continue to be FTTP, but also FTTN and, if it can be satisfactorily negotiated, wholesale access to existing HFC networks. Our focus will be on a service quality outcome – not a particular technology.”

I’ve got a particular problem with this, and it’s a quite a simple one. Turnbull talks as if the Coalition’s version of the NBN would automatically be technically equivalent to a fully FTTN NBN, but from a network perspective, that simply can’t be so. What’s on offer there is a patchwork solution that would mean an NBN connection in a smaller rural town could and most probably would be markedly different to those in the big cities. That, to me, doesn’t speak of a “national” broadband network at all; it’s a slightly-faster-in-some-areas version of what we’ve already got.

Would it be cheaper, and could it be delivered faster? I suspect he’s right there, but simply because his mantra (which makes some sense from an economically conservative viewpoint) is to deliver things with a purely financial/economic viewpoint, as though the NBN were a competitive investment rather than an infrastructure project. That’s also where I think the arguments around competition get rather shaky. We’ve had telecommunications competition in Australia for several decades now, and where did it lead us in a broadband sense? An HFC rollout that saw the two existing companies chase each other down the same limited suburban streets, limited cable penetration elsewhere (TransACT is still a minority player, after all), and not much else.

All this makes sound business sense — as Turnbull notes, there’s a cost involved with running out broadband to the entire country. It’s actually an area where I’d be far more wary of the existing government’s plans in relation to the NBN, simply because the plan calls to sell it off within a short timespan. That will create a Telstra-like monopoly — or at best, a heavily government regulated monopoly, which could conceivably be a messier version of the same monopoly — and I can see problems there. Why not hold onto that kind of asset and avoid the very problems that Turnbull raises the spectre of?

Turnbull’s speech notes that the current NBN plan is “unique”, but in his view, that’s not a good thing. Not that long ago, I attended a lunch hosted by a major networking vendor (not one, it should be noted, with a financial stake in the NBN rollout), where a visiting US executive was highly enthusiastic about what he knew about the NBN, describing it as “world leading” and “exciting”. His enthusiasm was dampened when it was pointed out that it may not come to pass at all; he couldn’t quite see why it didn’t make sense to invest in such a project at a government level to stimulate the general economy. Is there something wrong with being world-leading in an age where information is becoming such a key part of the economy?

[Malcolm Turnbull]
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