The long and winding road to a Coalition NBN policy

The Coalition is set to release its broadband policy this week, but it's unlikely to hold any surprises

The Coalition is reportedly set to release an alternative National Broadband Network (NBN) policy this week. But while critics of the Coalition have lambasted it for continuing to target the NBN without presenting an alternative vision for the network, the contents of the policy is expected to hold little surprise.

The Coalition’s initial reaction to the NBN was complete opposition to the network. Opposition treasurer, Joe Hockey, used a National Club Press speech in May 2010 to state the opposition would dismantle the NBN, stating the government should not use taxpayer money on what may become “expensive white elephants”.

However, it didn’t take long for the Coalition to soften its stance towards the NBN. In August 2010 it said it would spend up to $6.25 billion of public and private funding on an alternate broadband policy to provide 97 per cent of Australians with a minimum peak speed of 12Mbps. The remaining 3 per cent would have access to satellite at an undisclosed speed.

Report: What is the future of for the NBN under the Coalition?

Opposition leader Tony Abbott still continued to hurl insults against the NBN, labelling it an “icon of waste and incompetence” in September 2010.

While the Coalition has not released a policy around the NBN, it has announced some details about what it would do with the network if it wins the next federal election.

The Coalition has committed to using a combination of fibre-to-the-node (FTTN), fibre-to-the-premises (FTTP), fixed wireless and satellite for the NBN, only installing FTTP in new housing estates.

Turnbull has consistently stated the Coalition could deliver an NBN cheaper and sooner than the current FTTP network being rolled out by the Federal Government. This would result in cheaper prices for consumers as NBN Co would not need as high a return on investment, Turnbull said.

Most people could achieve speeds of 50Mbps, while those farthest away from the node will experience speeds of 25Mbps and a third of people will achieve speeds of 80Mbps, the shadow minister has claimed.

This assumption is based on the experience in the UK, Turnbull said, but he has refused to confirm exactly what speeds Australian consumers would be able to access under the Coalition’s NBN.

In September last year, Turnbull said he would seek to reverse existing NBN agreements and have Telstra and Optus retain their HFC networks, which are based on a combination of optical fibre and coaxial cable, in order to remove “barriers to competition” if a Coalition government was in power.

This includes two key NBN contracts – the $11 billion contract with NBN Co and Telstra and the $800 million contract with Optus and NBN Co.

The idea of cancelling contracts was floated in June 2011 when Abbott said the opposition would consider cancelling some of the $7 billion worth of contracts already signed between NBN Co and networking vendors.

Turnbull said he would expect Telstra to co-operate with any changed agreements, with David Thodey, chief executive at Telstra, stating a change in government would not affect the company’s financial figures. Thodey has stated a Coalition NBN could even be positive for the telco.

“If there’s a change of government, the current contracts give us a degree of protection – there’s the infrastructure services agreement, which is a 35-year contract, and depending how far we get, we get the payout on that or we get the revenues as they flow,” Thodey said.

Five months later, Turnbull told Computerworld Australia the Coalition would honour existing contracts for the NBN. Instead, he said the Coalition would consider negotiating a round of further contracts to complete the rollout of the network based on FTTN.

With FTTP capable of achieving speeds up to 100Mbps, and potentially 1Gbps in the future, Turnbull has acknowledged that some people who want fibre may not receive it under a Coalition government.

He said one possibility was a user-pays system where customers could pay for fibre extensions from nodes on the street to their premises.

Communications Minister, Stephen Conroy, said this type of fibre extension could cost up to $3000, and telco analyst Paul Budde has said the price could be as high as $5000, with several factors determining the cost of fibre extensions. For example, where the premise is located, the distance from the fibre footprint and the time and cost involved with civil works for the extension.

Part of the Coalition’s plan could also include dismantling NBN Co, with Turnbull a staunch critic of the government-owned company.

He took aim at NBN Co when its Special Access Undertaking (SAU) was rejected by the ACCC, stating NBN Co’s backdown with its revised SAU proposal meant the CEO could no longer claim a government-run “communications monopoly” would be friendlier than a private sector option.

Turnbull has also blamed NBN Co for not having a “transparent approach to information” and making it difficult for the Coalition to carry out a costed analysis of its alternative NBN plan.

Any aspirations Turnbull has to dismantle NBN Co could be problematic. Nick Economou, senior lecturer in politics and social inquiry at Monash University, has said in order to replace NBN Co, a Coalition government would need to pass new legislation, which could be problematic if the Coalition did not control the Senate.

Turnbull has also conceded that while it is not ideal to continue to operate NBN Co if the Coalition is elected, there may be no other option.

Critics and supporters of the Coalition’s NBN

The Coalition’s approach to the NBN has been lambasted from all sides of politics and by some in the industry.

Greens Senator Scott Ludlam believes the NBN will end up looking like a “dog’s breakfast” if the Coalition wins the federal election.

A long-time supporter of the NBN, Ludlam is highly critical of the idea of a network based on FTTN, stating that Turnbull had been given a “bad brief” from opposition leader Abbott.

Independent MP Rob Oakeshott believes based on his own “rough figures”, a Coalition version of the NBN would only be $5 billion cheaper than Labor’s $37.4 billion NBN.

Oakeshott, who helped Labor form government after the last federal election and cited the party’s NBN policy as a key reason, previously told Computerworld Australia any NBN cost benefit analysis by the Coalition needs to consider the cost of maintaining the existing copper network or it risks coming up with “false figures”.

“[The Coalition is] denying the maintenance of and the retention of the copper network in what I’ve seen quoted by them so far. That would be a cost that would continue to grow over time as the copper network becomes more difficult to maintain,” Oakeshott has said.

MyNetFone’s CEO has also rebuked Turnbull’s claims the Coalition could deliver a cheaper model for the NBN, stating the cost of maintaining the copper network will add to a FTTN deployment.

However, the idea of an FTTN network is not bereft of supporters.

AAPT’s CEO David Yuile previously told Computerworld Australia that while consumers may prefer FTTP, rolling out FTTN is more economical and the financial return of the network versus the cost to roll it out needs to be factored into the equation.

James Spenceley, CEO at ASX-listed company Vocus Communications, has also said that FTTN technology should make up part of the NBN. He said Conroy has dictated what customers need for the NBN instead of assessing whether different consumers around Australia need different things.

“They also have varying amounts as to how much they’re willing to pay. I think that’s the biggest folly … of Senator Conroy’s is not looking at technology for the right application,” Spenceley said.

Labor is now reportedly staring down the barrel of a landslide loss at the federal election, with Newspoll finding 50 per cent of voters would vote for the Coalition, compared to 30 per cent for Labor.

Unlike the previous federal election, when the NBN was a highly debated election issue, Monash University’s Economou has said the NBN will not play a major role in the broader public debate during this year’s federal election. Instead, it is likely to be overshadowed by other issues, such as the mining tax, the carbon tax and apparent leadership problems in the Labor party.

With Turnbull set to release a broadband NBN policy tomorrow, it might not play a central role in the upcoming election, but it will be one of the most anticipated tech policies to be released this year.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

Follow Computerworld Australia on Twitter: @ComputerworldAU

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Tags Malcolm TurnbullNational Broadband Network (NBN)

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