Where Is The Coalition Going With The NBN?

Where Is The Coalition Going With The NBN?

The Australian Bureau of Statistics has just released its six-month update on Internet Activity in this country. The update keeps reminding us of something we already know: our appetite for data continues to grow.

Ed Husic is the Federal Member for the Western Sydney electorate of Chifley. He has previously held positions as the Government Whip, Parliamentary Secretary for Broadband, Parliamentary Secretary Assisting The Prime Minister. Husic was also played a key role in the recent IT Pricing inquiry. He recently gave this speech at the CommsDay Summit about the future of the Coalition’s NBN.

Statistics have previously shown that for the 12 months between 2011 and 2012 alone, the amount of data downloaded by Australians over fixed-line internet grew by 61 per cent. In the six months captured by this new survey, data use by fixed lines grew another 20 per cent.

While the connection makeup remains a rough split between mobile wireless (51 per cent) versus fixed line (49 per cent) – another 200,000 Australians have been added to the total internet subscriber base. What’s interesting is the speeds at which people are choosing to connect.

Big growth can be seen in people taking up advertised plans offering between 8mbps to 24Mbps — up 21 per cent. And connections taking up advertised speeds of greater than 24Mbps is up 7 per cent. Everything below 8Mbps is contracting. Everything above the 8Mbps is growing. I don’t think I’ll be the only person thinking that growth above 24Mbps is warming up.

More data. Generated by more users. Consumed at higher speeds.

While people tell you that change is constant – I imagine we will be seeing those factors remain a constant in the foreseeable future. Or will we? Where’s the Coalition going? Signs aren’t good.

If there is one thing that Labor had an absolute, undeniable mandate for over the last two parliamentary terms it was building the National Broadband Network. Whenever you asked people if they supported the NBN and getting super-fast broadband you know what the answer would be.

Detractors of the network would argue that the general population just wants the internet for recreational purposes – these same people keep using Netflix and movie downloads as examples of this … or as justifications that their policy will allow this to keep occuring.

But — having stumbled our way over repeated failure in getting a coherent plan under previous governments — the need for the nation to have a modern broadband platform is critical for future economic growth. It’s critical for lifting productivity.

I don’t need to repeat the figures. This audience knows what having access to super-fast broadband means for business, for jobs, for speeding up the way you work and lowering the costs of undertaking that work.

Beyond the economic sphere, a modern broadband network has other impacts.

It’s critical to the way urban environments will evolve. For example, changing the way people engage with the world of work can impact on the movement of people across cities. Which then creates further social and economic benefit.

For instance, if 10 per cent of Australian employees were to telework half of the time, the total annual gain to the Australian economy would be around $1.4 to $1.9 billion.

And for Sydney-siders here, I read that this is the similar to turning traffic times into those experienced during school holidays. But these benefits aren’t limited to an urban context.

They’re critical to the way we develop our country’s regions and the way they can retain talent, grow economic opportunity and – help take further pressure of urban environments.

Changing the way people in our regions engage with educational opportunity, or changing the way people in remote areas can access health care and attention. In this way, you could see that Labor’s philosophy underpinning the rollout of the NBN was a catalyst, not an end in and of itself.

We didn’t look to just rolling out infrastructure and leaving up to others to work out how to get the most out of it.

We wanted this to drive economic and social improvement. We saw the potential for this network to cause the nation’s digital economy to bloom.

For example, we developed and updated a National Digital Economy Strategy to progress work in such areas as promoting:

• a safe and secure online environment;

• a strong ICT sector and skills base;

• regulations that support online engagement, and

• a willingness to adopt technologies such as cloud computing.

The awkward compromise

What the nation’s economic and productivity prospects have to grapple with is a broadband offering – put forward by a now Coalition Government – built off the back of an awkward political compromise.

That is, the Coalition went from:

• Trying 20 times and failing 20 times the last time they were in office to get a coherent national plan for broadband investment;

• They then – in Opposition – committed to destroy the NBN; and,

• After realising the public demand for improved broadband – and in an attempt to “product differentiate” – they came up with an awkward compromise: Fibre To The Node (FTTN).

A compromise we will pay for in so many ways.

We pay for it because of the huge investment of scarce government resources in a network that looks likely to be outdated by the time it’s rolled out – based on those usage and speed figures I quoted earlier.

We’ll get fizz – not bang – for the buck.

As a result we also pay for forgone economic opportunity because we will be lumbered with a network whose capacity will be out of step with others on the planet.

Imagine it: at a time when more places embrace the need for fibre rollouts, we will crouched over a copper network, applying an equivalent of CPR in a vain attempt to squeeze the last moments of life out of it.

After an election outcome that led to a change of government, the orthodox view would be to accept a new regime and a new policy.

I argue the nation can’t afford to do that.

Accepting the orthodox is not what made the people in this room successful.

Accepting the orthodox does not enable us to grow or be prepared for future growth.

And I am not alone in the view that this government simply does not have a mandate or support for building a sub-par broadband network. The 200,000 plus Australians who were prepared to sign an online petition calling for a better broadband network than what the Coalition was offering – within hours of that petition’s creation – is sign in itself that others aren’t prepared to accept the orthodox.

Australia cannot continue “clutching for the cringe” when it comes to technology.

We should be prepared to force our way to the front of the pack of those nations that have fibred up.

Now, instead of a uniform national platform, built off what is widely accepted as being able to deliver the fastest speed with the greatest capacity, we have “trials” with copper based technology. Now, instead of a national broadband platform that can provide competition among retailers, we look set for this government giving the green light to competition between rival network operators… who are retailers. Sound familiar?

Instead of learning from past mistakes, we look set to dialling up the past to re-live those mistakes.

Where are we at?

It seems to me that the Coalition is determined to resurrect past failure in policy approach.

So much of what can be seen now is about throw-back.

Throw-back to policy.

Throw-back to people.

It’s not outside the bounds of memory within this room to recall a time when the then Howard Government scrambled to come up with a cogent, working broadband plan. One that was national in approach. Consistent in manner. Not cobbled together or the product of countless inquiries.

But now we’re subjected to another review after being told the Coalition had a plan. Now we’re told that the Coalition is agnostic on technology after telling everyone they had a plan.

A plan for the future.A plan for the future … that involves a lot of copper. All this with the clock ticking. Remember, the Coalition has said nearly 9 million premises will be connected by 30 June 2016. It’s been estimated that that equates to 12,000 connections a day. 8,000 if you presume they take out the 3m or so that currently can access cable broadband.

Policy of throw-back

So, with the pressure on, and after all the time the Coalition had to come up with a plan – and then think about the people to execute that plan – how are we racing into the future?

We now have the Coalition attempting a throw-back.

We’ve been told we’ll have people that will run NBNCo, but they have been brought in from the past.

And this act of resurrection sees the Coalition fail its own tests.

Remember, our Communications Minister was the one who led a campaign against a well regarded figure in former NBNCo chief Mike Quigley, stating in September last year:

“Personally I don’t think he was the right choice for the job…I’m not making any criticisms of Mike Quigley personally but his whole career has been working for Alcatel. He’s never built a network, he’s never run a network. This (the NBN project) is essentially a construction job.”

So, the suggestion is that NBNCo needed people of such a calibre – with the skill set to oversight a ‘construction job’.

That’s the test. Set by the Coalition.

First move in one of his first media conferences as Communications Minister? Mr Turnbull brings in someone to chair NBNCo – and manage it in the short-term – that wouldn’t meet his own test. Now it appears to me that on paper – and to paraphrase Mr Turnbull – I’m not making any personal criticism of Mr Switkowski but has he ever built a network, has he ever been hands-on in running a network?

Let me make this point very clear.

If the Coalition Government says it has a plan, it needs to be held account for that plan. Every step of the way.

If it says it has found people to execute that plan, it’s the job of the Opposition to forensically assess the capabilities of the people being brought by the Coalition to see if they’re up to the task. And a broadband triumvirate won’t cut it for the NBNCo Board.

Now in Government, the Coalition will have to account for how it will broaden the experience of the board in the way it said had to occur while it was in Opposition.

Talking of resurrections

Talking of resurrections, of sorts, what about Telstra? Having breathed a sigh of relief after completing a gruelling negotiation to secure one of the biggest corporate deals in the country with NBNCo, Telstra now has to re-negotiate with a Coalition Government.

But this deal will be completely different in some pretty major ways. Because before, we negotiated – if I can put it this way – for “space”. That is, the space in the ducts of Telstra’s underground network. To push that fibre through, we needed their remediated ducts. It cost over $10bn to get that access.

But we did it.

Now, after telling everyone that it was going to rely on copper to deliver the broadband network of the future, the Coalition has to set up a bargaining process with the only player that has the copper network in place to make that happen: Telstra.

This changes the game remarkably.

Because, again, we negotiated for access, the Coalition is bargaining to lease or buy copper. I don’t believe a firm, publicly released costing of the copper network has ever been released by Telstra but the figures I have seen go from $17bn to, in some cases, over $40bn. And the network is not of uniform quality across the country. Therefore negotiating remediation should be an interesting process too.

The other important point is that we don’t have a firm, hand on heart figure put on the table by the Coalition as to what this access will cost – and then what impact this will have on their overall price tag.

We know Telstra’s David Thodey has said they won’t accept anything lower than $11bn. But the Coalition needs to come clean on this.

Because the other significant issue worth pondering now is the one of economic influence.

Labor secured the reform that had eluded it and the Coalition for decades: structural separation, making sure a network owner didn’t influence the retail environment in ways we previously experienced.

My concern with opening talks with Telstra on access to copper is the economic influence that re-emerges for a network owner.

Further, and this isn’t a criticism of Telstra, we have a situation where commercial talks will be held with a network owner whose network does require significant remediation investment.

Whose copper network will be relied upon – rain, hail or shine – to deliver for retailers.

If it doesn’t deliver it needs to make sure it’s attended to in a timely way, but to customer service standards that don’t currently exist comprehensively for the provision of data.

Having finally got to a point where a new national network would be built using reliable, secure fibre, we are now faced with the prospect of throwing-back to a copper network owned by a retailer with a big interest in a growing broadband market.

Truth be told, I actually had no issue with Telstra being relied upon as a construction partner for the NBN.

I could also easily see a situation where Telstra could become an asset manager, post 2021. But that was a decision for a Board to make, not a politician to dictate.

My big issue now is the prospect of the Coalition inadvertently re-sealing parts of a structurally separated network owner in an attempt to bring life to its political compromise.

This situation is just a mess in the making on so many levels.

Future priorities for Labor

While as an Opposition we currently have an interim frontbench, our leadership ballot will be concluded shortly and the line-up of the shadow ministry will be determined soon after that.

People in these roles will bring their own focus and style to the position.

But I think you can be certain, that the Labor Opposition will have a big focus placed on the future of broadband in this country.

You will expect us to hold this Government to account every step of the way as the Coalition attempts to reach its major deadline of 9m premises connected by 30 June 2016.

You will expect us to hold them to account on their key personnel appointments.

But you’ll know that – as people who passionately believe in the economic and social benefit of better broadband – that we will continue to make the case for a plan that is fundamentally better than what the Coalition offers.

The challenge for us all is to shift a supposedly technology agnostic Coalition into the believers camp.

Along the way we need to move the debate from one bogged down in a war of attrition over method to one focused on goal – that is, getting the Coalition to embrace the objective of delivering fibre to 93% of Australian homes and premises.

Our job as an Opposition is made phenomenally easier because we have a team of people who hold a deep affinity with the sector.

Let me run through the talent that exists in our ranks building off the work pioneered by Stephen Conroy.

You have Anthony Albanese, Kate Lundy, Sharon Bird, Michelle Rowland, Stephen Jones, Nick Champion, and newly elected MP Tim Watts.

Here are a collection of people who believe – as I do – in the value of this sector to our nation’s long-term benefit.

And who are committed to tackling what Google’ new Australian MD Maile Carnegie lamented about recently, where she said:

“It’s a little bit frustrating in Australia. It feels like we could be on the cusp of renewal but I’m frustrated that we’re not recognising the benefits.”

Our job is keep a focus on the advantage we get as a nation from investing in better broadband.

Our job is to not to accept the orthodox and to push for better.

It’s something we’re committed to as a Labor Opposition and it’s something we know you’re committed to as leaders in your field.