Turnbull's NBN house of cards

The Coalition’s National Broadband Network (NBN) review report released last week attempts to provide justification for the Coalition’s NBN plan but contains more holes than swiss cheese.

Two weeks ago the Minister for Communications Malcolm Turnbull advised Australians not to believe reports written by review teams hand-picked by politicians. He is quite correct in his advice. Any NBN review designed to bolster a particular political agenda is worthless.

What we do know is that the Coalition’s ADSL, Fibre-to-the-node (FTTN), Fibre-to-the-basement (FTTB) and Hybrid Fibre Coaxial (HFC) (multi-technology) NBN approach will cost a lot more than what was promised pre-election. And the delivery timetable doesn't look that great either. The eventual cost to upgrade to Fibre-to-the-Premises (FTTP) if the Coalition’s approach is implemented will more than treble from the cost of Labor’s approach if it is seen through to project completion.

Turnbull's defence

Turnbull was told this last April when the Coalition’s NBN plan was first announced and the communications minister has been reminded many times over the past year by experts not aligned with one political party or the other. 

The NBN review report was always designed to provide a smokescreen for Turnbull’s backflips and somersaults but the stench associated with the NBN review report is spreading rapidly.

Turnbull told Fairfax that he didn't "feel any shame" about the government's inaccurate pre-election forecasts.

"They were (cost) estimates done in the best of good faith from opposition, and as far as the 2016 target is concerned, I'm very disappointed that the company is not going to be able to do that,” he said.

Turnbull recently stated that Labor wasted $20 billion on the NBN which should have cost $15 to $20 billion "had you approached it the right way from the start".

The right way according to Turnbull will now cost closer to $42 billion. But like a house of cards the Coalition’s NBN plan can collapse if any one of a multitude of assumptions made proves false.

Senate reboot

The composition of the new Australian Senate will prove crucial for the Coalition’s new NBN plans.

This will not be known until July 1 2014 until the High Court, sitting as the Court of Disputed Returns, decides whether the 2013 Western Australian senate election results should stand or whether another election will be held in Western Australia.

Currently the senate composition stands at the Coalition 33 seats, Labor / Greens 35 seats, Palmer United Party 2 seats, and six individual seats held by minor parties.

If the Western Australian senate election is held again it's possible that Labor and the Greens could pick up the 5th and 6th seats which would mean the senate composition would be Coalition 33 seats, Labor / Greens 36 seats, Palmer United Party 2 seats, with five individual seats held by minor parties.

The Coalition will need to win control of the senate because NBN legislation may need to be altered to permit the Coalition’s multi-technology access network environment, especially as there will be contrary views on the interpretation of the current NBN legislation regarding cherry picking and wholesale access to FTTB and HFC networks owned by companies other than NBN Co.

If the Coalition does not gain Senate support to change current NBN legislation then it's likely there could be significant delays while matters move to the High Court for clarification. There is a strong chance that one or more companies will realise that the Coalition's multi-technology, multi-wholesale network approach is inherently anti-competitive and will cost more than the ubiquitous FTTP network that is owned and operated by NBN Co.

Competition complications

It could be argued that existing NBN legislation does not need to be changed if multi-technology networks become available to all retail providers through wholesale arrangements.

But what happens if Telstra (copper and HFC), Optus (HFC) and TPG (FTTB announced) put submissions to the Australian Competition and Consumer Comission (ACCC) to argue for cherry picking and wholesale access charges that are higher than the NBN Co wholesale access charges?

Companies could take the opportunity to build a considerable margin into wholesale access to their networks. The ACCC chairman Rod Sims announced that the recently finalised Special Access Undertaking accommodates variations to take into account “any new directions from the government”, which could mean an increase in access costs to consumers.

It took the ACCC ten years and countless trips to court to achieve a reasonable level of compliance by Telstra for the provision of wholesale access to copper.

What guarantee will there be that all retail providers will be provided with reasonable wholesale access and performance guarantees? The ACCC is still not able to provide details of internet connections speeds, performance and quality of service provided over Australian access networks.

2016 federal election

NBN Co plans to commence the multi-technology rollout during the second half of 2015 which means that it will only have about 12-18 months before the next federal election. During that time the rollout might reach five to ten per cent of premises – discounting any inclusion of HFC figures because the HFC will need to be upgraded and transformed into a wholesale network.

If the Coalition loses the next election and Labor goes to the election with a plan to stop the multi-technology rollout the start-up costs, which could be as high as $10 billion, will be lost.

The Coalition would argue that the $10 billion is being wasted by Labor but this would be wrong because the Coalition must accept that there is a rollout occurring now and the decision to change direction has risks associated with it. The risk of failure at the next election is a risk that must be considered, especially if the latest polling is to be believed.

And what about any agreements and contracts signed by NBN Co before the next election? Will the contracts be reversible or will the Coalition put in place contracts that will be too expensive to renegotiate after the 2016 election?

Ultimately the decision to change direction with the NBN rollout is a political decision but there are governance requirements that must be met by the NBN Co board. After the next election it would not be unreasonable for an incoming Labor government to hold a royal commission into decisions made by the NBN Co board which could lead to billions being wasted.

Agreements and contracts

New agreements will be needed with Telstra, Optus and many other companies. Renegotiating existing agreements will increase costs because companies would be negligent if they did not look to optimise return on any new agreements.

Existing infrastructure contractors will take this opportunity to put their hands out for considerable increases in future contracts and who would blame them for doing this? The Coalition needs their support to change direction and build the NBN. Contractors are well aware the Coalition has no stomach for delays that might affect the rollout and provide ammunition to Labor at the next election.

By utilising HFC, NBN Co will be negotiating with Telstra and Optus who will be looking for an unexpected, yet welcome profit. This profit will balloon from any network operation, maintenance and upgrade agreements.

HFC

NBN Co’s non-executive director Simon Hackett wrote a spirited defence of HFC on his blog in response to ongoing criticism in the media of the HFC networks.

Hackett’s argument that the HFC can be rebuilt to cover black-spots, have traffic class management, performance and quality of service and congestion control retrofitted and upgraded to DOCSIS 3.1 in the next 3 to 5 years reads like the NBN review report – yet more assumptions and unknown costs that consumers will have to pay and no guarantee that NBN Co will actually do anything.

The argument the HFC network can be rebuilt to fill in black-spots adds a cost that NBN Co will look to put off as long as possible. This is because it will take time to identify where the black-spots are, prioritise and identify if it is economic for the work to go ahead. And the work crews will need to be trained, provisioned and allocated to do the work.

There will still be a need to rollout new fibre to multi-dwelling units which are not likely to be connected to HFC networks.

Hackett also argues that HFC and FTTP provide shared connections into premises and both can provide equivalent connection performance but he then provides a caveat that traffic class management, performance and quality of service and congestion control are not currently implemented on the HFC networks and will need to be retrofitted. There is no guarantee that this will be done because it has not been identified by NBN Co at this point. If it is done then yet another unknown cost that needs to be added to the Coalition plan.

FTTP GPON operating with 1 Gbps download speed is available now and NBN Co has previously announced that gigabit connection speeds will be available in January 2014 so why would anyone want to bear the risk of utilising HFC and introducing, as yet unknown. costs to rebuild, retrofit and upgrade?

FTTN

Last week the government and NBN Co representatives at the Senate Estimates Committee admitted that neither had spoken to Telstra about the state of the copper network. This was an amazing admission at a time when NBN Co was about to release a review report recommending FTTN and other technologies be adopted.

This week's proceedings at the Committee have further galvanised the enormity of NBN Co's copper gamble. As Telstra's government affairs director James Shaw said on Tuesday, Telstra does not know the full state of the copper and is unlikely to conduct an audit before FTTN deployment.

The NBN review report was apparently based on data about copper networks other than Australia’s copper network. The risk associated with the decision to utilise foreign copper network data is considerable and should give rise to concern because Australia’s copper network is unlike the international copper networks that have apparently been the source of data used in the NBN review report.

The copper network was at the heart of the decision to implement FTTP. In 2008, the Labor constituted review panel identified the risks associated with the copper network were unacceptably high, knowing that any inclusion of the copper network in the future NBN would mean Telstra remains central to the NBN.

The Coalition’s NBN plan places several telcos in an enviable position where they will be able to take a clip from any retail user that access their network and also provides for considerable profits for retrofits, performance upgrades and network operation.

What exactly is the NBN Co providing now?

The NBN review report is quite remarkable because we’re told $42 billion is needed to build a multi-technology NBN but the number of assumptions makes the report look like the lunar surface. What will the money be spent on, what will be provided and how much will the copper and HFC really cost?

NBN Co is now committed to providing 25 Mbps sometime after 2016, 50 Mbps sometime later and 100 Mbps at some point after that if you’re lucky and your stars are in alignment.

The NBN review report remains vague regarding the provision of traffic class management, capacity, congestion and backhaul. NBN Co must provide clear statements about the multi-technology network design criteria, what will be achieved and when.

The NBN Co board has been asked to build an NBN, and if this latest review report is a guide, NBN Co has a long way to go before anyone will have a firm idea of what they’re doing or why.

Mark Gregory is a Senior Lecturer in the School of Electrical and Computer Engineering at RMIT University

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I agree the "Coalition’s NBN plan but contains more holes than Swiss cheese" but that still makes it better than the original Labor plan.

Labor's plan grew out of Labor's original failed tender, Labor decided to double up and gamble almost $30billion based on almost no analysis. The latest estimate is that cost has grown to $73 billion.

Hi Sam, Turnbull's hand-picked team has provided guidance that Labor's plan would cost $73 billion. There is no independent evidence that this is the case and we should not accept the NBN review report simply because Turnbull has advised us not to trust reports written by political hand-picked teams.

I second that. At this stage it is shaping up that the Liberal FTTN plan is more expensive, more disruptive and much much more complex.

Also the FTTP plan does not involve anymore digging up of the streets than the FTTN plan. That's because existing conduit access has been bought of Telstra and they are contractually obliged to offer it.

I'm glad I have NBN Fibre to the Home and the service is fantastic. I just feel sorry for the rest of you if the Libs pull this scam on the Australian public.

well there goes your credibility!! we can believes Conroy/Rudds estimate conceived during a plane trip but not Turnballs independent review?? And then there is the well-know adage that the bigger the project the more over-budget and over-time it gets. but now when labor runs it right?? Except that the NBN is 80% behind schedule and well over budget while connecting almost nobody.

So who do YOU trust??? Apparently, anyone who tells you want you want to hear.

Hi Geoff, what we know now is the real difference in cost between the plans is $1 billion - this is in the review report. What the problem is now is the time to install FTTP. The Coalition is arguing it would take until 2027 to complete and this is correct, if you don't boost the installation process, use an in house construction department and get communities involved. There is a lack of innovative thinking going on.

Can you explain why nations like the USA, UK, France, Germany , Canada etc have all went for the FTTN option as their NBN, which is now finished... while Australia is building FTTP?

Any why only a few countries like Sweeden, Sth Korea and Japan have FTTP to any significance?

And why the FTTP providers like Verizon in the USA are suffering low revenue and high maintenance cost?

Hi J Mascis, the reason is timing. The FTTN years are now over and really if Australia was going to do FTTN it should have been 10-15 years ago. The "gigabit race" using FTTP has now commenced. The US telcos have been no shining light, similar to our Telecommunication Industry, and this is why Google Fiber occurred and why we're seeing individual cities in the US going it alone on FTTP - chattanooga and Los Angeles and many others.

There is nothing wrong with FTTN if it was done 15 years ago and completed now. However to start doing FTTN now is madness and the Coalition NBN review has clearly pointed out that by 2027 the difference in cost would be about $1 billion. But at this point Australia would have a fibre network and would be able to compete in the global digital economy - something that we will not be able to do fully under the Coalition's NBN plan.

So the writer doesn't have too much difficulty accepting in principle the estimate of $42 billion for FTTN but has trouble accepting the $73 billion for FTTP - under the same review. Then through comments reinforces his view there is only $1 billion difference between the 2 plans. Quite laughable.

My advice is not to trust bias and speculation.

Hi Anonymous, you've read my articles for the past 18 months and know that this is what I predicted from the beginning - based on 30 years in the industry. The problem's are Telstra and the construction approach. The report highlights that a large chunk of the NBN Co income is going to Telstra and Optus. Another failure to resolve the telecommunication industry problems by the former government and the current government.

The Coalition's approach could ultimately cost more than the Labor approach and will certainly not deliver what they promised - but know this because of Turnbull's backflips and somersaults. What we also know is the review has found that in 2027 the cost differential would only be $1 billion - read the report.

So do you want copper and 25 Mbps or FTTP and 1 Gbps if the cost is only $1 billion more?

If

But what future requirements and the comment "The eventual cost to upgrade to Fibre-to-the-Premises (FTTP) if the Coalition’s approach is implemented will more than treble from the cost of Labor’s approach if it is seen through to project completion."?
We should be looking at this through a 50+year lens so that we do this once and do it right. Not stuff around with technology that might provide for today's needs but not my kids needs in the future.
This is short term thinking. I'd be happy to wait longer and pay more to do this right today rather than have an inferior, short term solution that is delivered slightly quicker and slightly cheaper (not counting upgrade costs) now.

Sam
How does a plan with more holes than Swiss cheese, based on a random mix of obsolete technologies make a any sense at all?

The Coalitions NBN plan is reward for Murdoch, so Australian's don't have fast usable internet in the near future, so that Murdoch can continue to flog his Foxtel with limited competition.
The Coalitions NBN gives us speeds we currently have in 4 years, at a wasteful expense, as we don;t get any signfiicant improvement, and it cannot be easily expanded. it is around 25mbps in four years, what a joke.
At least a full much simpler NBN Fibre to the Home roll out, gives us a solid 100mbps with a relatively inexpensive step up to faster speeds without major recabling, the fibre cables are in places, just exchanges could be upgraded for increased speed again. Look at the numbers NBN from Turnbull is a massive thank you to Murdoch, an obscene waste of money, hugely complex, relies on dodgy copper cables, relies on Telstra and Optus, it is a dodge and it is shameful.

The public commentary (e.g. above) keeps on referring to the Coalition's NBN policy being a "reward for Murdoch", but I have never seen any reasons given as to why this is the case. Could one of you who state this please explain why, because I am unable to deduce this?

David
An effective, ubiquitous, high speed NBN gives us two things
Firstly, it makes it easier and cheaper for alternative news sources to get to their readers. So journalists and opinion writers would have less need for a centralised news service.
Secondly, it enables other sources of entertainment that would compete with Foxtel.
Both of these are a threat to Murdoch. The coalition's NBN makes it much harder for new entrants to either of these markets because of the random mix of obsolete technologies they prose to use.

Rubbish. the way you write you'd think we are all on dial-up. Current ADSL 2+ gives people the ability to do all of those things you talk about. The Murdoch claim is among the most pitiful argument yet thrown about by the NBN-hysterics. Not one thing you refer to cannot be done using the current network, nevermind the FTTN network.

Rubbish. My current ADSL 2+ service in metorpolitan Melbourne is not capable of providing a Foxtel like service - but FFTP would give me a choice of multiple suppliers. That is the risk that the Murdoch conspiracies speak of. Is it fact that Murdoch has pulled strings for this reason? None of us mere punters know - but the logic of the argument is entirely plausible.

So that would be "completely unfounded" then.

FWIW. I currently live about 2.5km from the local exchange with access to ADSL and CABLE broadband. In the next couple of months I shall be moving to a new house 2km from the same exchange that because of RIM pair gain infrastructure is unable to get ADSL (of ANY sort), nor CABLE. The NBN (FTTH) was not going to get there in the current 3 year rollout and was unlikely to be included in the next 3 year tranche. The only option is 4G broadband - and it is an expensive solution for a fixed "high speed" broadband solution.

This is the type of edge-case that made a mockery of Conroy's NBN process. It is entirely plausible that Turnbull's FTTN will provide me with wire-based broadband that can also support entertainment services years ahead of the previous "plan".

But this has nothing to do with Murdoch - except that I chose to install a foxtel satellite dish because NBN TO THE HOME was/is NOT an option.

Dear GF. The coalition NBN policy was launched at Fox Studios, with both Turnbull and Abbott looking uncomfortable. I do not think they were reading from their own script.

"NBN Co is now committed to providing 25 Mbps sometime after 2016"

That's no longer true is it? Ziggy said earlier this week to the senate: “I do not buy questions that demand us to guarantee anything".

So for $40B or so we'll still be stuck with an "up to" service.

Expect anything up to 50MBps delivered anywhere up to 2100. (At this rate)

From what I have seen it does not appear that one can trust Turnbull. I recall his theories about wireless and copper a couple of years ago. And now we are getting a stitched up NBN which will never work properly. And expect the whole project to be canned just like climate change policy and Gonski. Oh I forgot....private schools will not lose anything and more than likely gain funding. Yes Tony Abbott you will turn this into class warfare. Shame.

This article is typical of one eyed propeller heads who focus on one sided representations of the technical excellence of fibre-optic to the home without reference to the cost and misrepresentation by Conroy and Rudd.

The NBN solution was a political solution and not a logical one, and was never subject to appropriate cost benefit analysis. It was full of rural pork-barrelling, misrepresentation as to the true cost of the project, and reversed engineered financial analysis to keep the project out of the Federal budget.

Notwithstanding that it was Australia's biggest infrastructure project, the internal machinations of the NBN Co were precluded from FOI by deliberate intent to hide the true picture from the Australian people.

Ripping out perfectly functional infrastructure, to satisfy political whim, and blatant misrepresentation of costs and benefits underpinned Labor policy representations.

Furthermore because of the continuing budget woes confronting the government, open-ended commitments to technical excellence without consideration of cost cannot be sustained.

"Perfectly functional" for analogue voice calls maybe!
You obviously don't use the Internet or at least don't use it for anything more demanding than reading your emails and browsing the web.
Extremely short sighted in my view. If we followed this reasoning we would all still be on 300 baud modems using the copper telephone lines. Look at the speed requirements over time a reasonable speed to expect to use would be 157Mpbs by 2017. The Coalition's NBN will struggle to provide this and future high speed requirements.
Year Baud Rate kbps Mbps
1979 300 0.3 0.0003
1981 600 0.6 0.0006
1983 1200 1.2 0.0012
1985 2400 2.4 0.0024
1987 4800 4.8 0.0048
1989 9600 9.6 0.0096
1991 19200 19.2 0.0192
1993 38400 38.4 0.0384
1995 76800 76.8 0.0768
1997 153600 153.6 0.1536
1999 307200 307.2 0.3072
2001 614400 614.4 0.6144
2003 1228800 1228.8 1.2288
2005 2457600 2457.6 2.4576
2007 4915200 4915.2 4.9152
2009 9830400 9830.4 9.8304
2011 19660800 19660.8 19.6608
2013 39321600 39321.6 39.3216
2015 78643200 78643.2 78.6432
2017 157286400 157286.4 157.2864

Here comes Greg lastName, breaking out of the backline making a last minute dash for clanger of the year - "Ripping out perfectly functional infrastructure". The Judges should judge that one quite highly as it shows a complete lack of a grip on reality. He has totally ignored ADSL connections that when it rains halve and quarter in speed. He's totally forgotten connections speeds on 24Mbps plans that are lucky to hit 2 - 4Mbps. The pictures of cable pits where the wiring is "protected" by shopping bags and some gaffer tape have totally slipped his rose coloured mind. He's also managed to throw a bit of conspiracy theory in there, "hide the true picture from the Australian people" and then, the icing on the cake, a nice bit of Ad hominem work, "one eyed propeller heads". I think we are seeing GOLD in the making here ladies and gentlemen.....

The value proposition for the NBN seems to have slid into nothingness. What would happen if we just switched the programme off and sold off whatever assets it has.

The industry was deregulated many many moons ago and the opportunity back then of regulating the wholesale component (Telstra Wholesale and International) and deregulating the consumer / retail component has gone.

Use some of the gains from the NBN to provide R&D for domestic high-tech industry development at the delivery and application layer instead. For low yield regions and locations provide a policy framework that incentivises private sector to provide the service and get some form of offset or tax relief.

macallan@bigpond.net.au
0419 504 255

Turnbulls review of the NBN project is at the very least far more thorough than the Conroy /Rudd rush to announce a $43Billion off budget project.Their announcement of a switch to a Fibre to the home project came so quickly after Telstra's non bid for their previous FTTN tender that it could not possibly have been studied and critiqued in depth. The Turnbull critics all seem to have an underlining belief that opportunity cost doesnt matter.The comment by some critics that use of copper from node to home wont work when as Ziggy Switowski has observed many other countries are doing exactly that is wrong albeit it will be inferior.Low value users can survive at lesser speed .Not everyone has to be able to download movies at warp speed.. This is a project which never should have been off budget because it has neglegible chance of making the return necessary to justify that step. Putting it off budget was dubious accounting designed to disguise rather than reveal.Like everyone I want faster access but have to recognise that in the real world everything has a cost .Continuing the NBN on Labors plan would have had a much greater cost than Turnbulls revised version ;meaning the opportunity cost of other government projects foregone to build the NBN of some peoples dreams.Its necessary to prioritise major business and institutional users to pull the project toward economic reality.

You make some stong assertions Graham but the truth is, like most people that comment on these forums, you are guessing - and possibly swayed by the arguments that suit your point of view. Here is how I see things:
1) the need to uprade the nation's telecommunications network is largely uncontested; most developed countries are doing so for the long term advancement of their countries.
2) Whatever method you use is expensive. There is no way round that.
3) Virtually all technologists and most politicians (including Mr Turnbull) seem to agree that FTTP is the ultimate end game.
4) We have had one expert panel recommend, after six months of deliberations, that none of the FTTN proposals submitted back in 2009 represented value for money and proposed a "build it once, build it with fibre plot".
5) Their estimated costings were confirmed by internationally respected consultants.
6) that plot is underway but, unsurprisingly, has struck some difficulties along the way. That is normal for an undertaking of this size.
7) A new set of consultants has now recommended a more complex plot that relies on a mix of exisitng trechnologies plus FTTP in some places.
8) A different set of of respected international consultants, after five weeks of deliberations, have come up with a different costings.
9) I have no doubt that both sets of estimates are as valid as each other; they both rely on the assumptions that have been made; neither will be 100% correct.
10) The new plot relies on re-negotiated deals with the owners of the exisitng infrastructure. The terms of those eventual agreements - assuming they can be reached and signed off by the ACCC - remain unknown at this point. There may have been some redacted guesses in the report - but, if there are, they are still guesses.
11) The gap between the "continue with the FTTP plot" and the "re-use the copper and HFC plot" is now guessed at being around $30 bill. Once all the negotiations are completed, any significant narrowing of that gap may yet show that the "build it once, build it with fibre" is the better deal.
This saga has along way to run yet....

I love it. Only three months and Labor is already a real contender again. C'mon Tony, just fall off your bike so we can all get on with things.

No way
Keep Murdoch and his turd gilders in power to handle the consequences of their deceit and manipulation.

http://delimiter.com.au/2013/12/18/greens-labor-slam-coalitions-nbn-trai...
http://delimiter.com.au/2013/12/18/greens-labor-slam-coalitions-nbn-trai...

JC
Posted 18/12/2013 at 12:08 pm | Permalink | Reply

Summary of yesterdays findings in the Senate Committee, from what I can tell…

+ gigabit FTTP available now to anyone who already has FTTP on NBN – one positive!

- $8million spent on the Strategic Review which has been shown to be full of dodgy financial figures and factually incorrect rollout figures
- Cost of Telstra CAN not included in MTM & FTTN plans
- Cost of Telstra & Optus HFC networks not included in MTM & FTTN plans
- Telstra claims CAN is in great shape, then admits that 2mbps on a 20mbps ADSL connection is considered acceptable
- Malcolm Turnbull has advised NBN co to not release the figures to Senate Select committee under any circumstances, even a closed in camera session
- Telstra shareholdings for execs in NBN Co aren’t required to be disclosed as conflicts of interest despite execs pushing for more of the funds to go to Telstra
- Ziggy and JB Rousselot think there is no demand for higher speed (up to 1gbps) connectivity
- 25/10 and 50/20 as ideal VDSL2+ speeds, but not guaranteed
- The HFC networks will not need to be resold through RSPs – it will be Telstra and Optus HFC only
- no upgrades to the HFC networks costed into the MTM plans
- When questioned about option 4 in the strategic review, no answer was given as to why option 6 was preferred
- NBN Co board members and exec team hired due to personal relationship with Malcolm Turnbull, not due to skill or competence
- JB Rousselot confirms that places with bad broadband access currently will not be prioritised for the NBN rollout, and that they will be focussing on the more profitable areas, whilst not rolling out the product which can provide the largest profit margin (FTTP)
- Internal house-hold wiring remediation will need to be done at the cost of the end-user
- VDSL2 modems will need to be purchased by consumers for their FTTN connections
- The Strategic Review found no material issues with NBN Co’s FTTP rollout expenses to date yet states the rollout cost blowout to $73bn
- Many of the Telstra execs involved in halting the FTTP rollout due to asbestos issues are now working as execs for NBN Co
- The CFO of NBN Co is conveniently on holiday out of the country, and the chairman of the board/ acting CEO thinks his input isn’t relevant to the Strategic Review
- NBN Co have slowed the rollout of FTTP at the direct instruction of Malcolm Turnbull which adds $11b to the cost of the projection of a full FTTP rollout
- Rollout is currently going approximately 20% slower than directly before the election compared to present day (5000 premises to ~4000 premises per day). No confirmation when the slow down started and vague information as to what has caused it.
- Admission that maximum 700m – 900m in length Copper tails were used to estimate the cost of Option 6 in the Strategic Review.
- No confirmation of the number of nodes required for Option 6
and finally
- $41b* (final figure not confirmed due to aforementioned omissions) to guarantee no speeds to anyone.

In light of these revelations, go read http://nbnco.com.au/about-us/our-values.html#trust and see how ridiculous all this is.

I despair for this country.

Here’s the Hansard. It’s a long read…

http://parlinfo.aph.gov.au/parlInfo/download/committees/commsen/f27fdc68...

http://delimiter.com.au/2013/12/18/greens-labor-slam-coalitions-nbn-trai...

Steve large projects inevitablyhave costings issues but $30Billion plus or minus is an awfully large amount; particularly with our burgeoning debt.It also represents a huge amount of capital which cannot be spent elsewhere and a huge amount of construction equipment and skilled labor diverted from other projects.Malcolm Turnbull has no choice as it would have been irresponsible not to order immediate review on assuming office particularly given the lack of proper business planning before commencement of the project.

http://delimiter.com.au/2013/12/18/greens-labor-slam-coalitions-nbn-trai...
http://delimiter.com.au/2013/12/18/greens-labor-slam-coalitions-nbn-trai...

JC
Posted 18/12/2013 at 12:08 pm | Permalink | Reply

Summary of yesterdays findings in the Senate Committee, from what I can tell…

+ gigabit FTTP available now to anyone who already has FTTP on NBN – one positive!

- $8million spent on the Strategic Review which has been shown to be full of dodgy financial figures and factually incorrect rollout figures
- Cost of Telstra CAN not included in MTM & FTTN plans
- Cost of Telstra & Optus HFC networks not included in MTM & FTTN plans
- Telstra claims CAN is in great shape, then admits that 2mbps on a 20mbps ADSL connection is considered acceptable
- Malcolm Turnbull has advised NBN co to not release the figures to Senate Select committee under any circumstances, even a closed in camera session
- Telstra shareholdings for execs in NBN Co aren’t required to be disclosed as conflicts of interest despite execs pushing for more of the funds to go to Telstra
- Ziggy and JB Rousselot think there is no demand for higher speed (up to 1gbps) connectivity
- 25/10 and 50/20 as ideal VDSL2+ speeds, but not guaranteed
- The HFC networks will not need to be resold through RSPs – it will be Telstra and Optus HFC only
- no upgrades to the HFC networks costed into the MTM plans
- When questioned about option 4 in the strategic review, no answer was given as to why option 6 was preferred
- NBN Co board members and exec team hired due to personal relationship with Malcolm Turnbull, not due to skill or competence
- JB Rousselot confirms that places with bad broadband access currently will not be prioritised for the NBN rollout, and that they will be focussing on the more profitable areas, whilst not rolling out the product which can provide the largest profit margin (FTTP)
- Internal house-hold wiring remediation will need to be done at the cost of the end-user
- VDSL2 modems will need to be purchased by consumers for their FTTN connections
- The Strategic Review found no material issues with NBN Co’s FTTP rollout expenses to date yet states the rollout cost blowout to $73bn
- Many of the Telstra execs involved in halting the FTTP rollout due to asbestos issues are now working as execs for NBN Co
- The CFO of NBN Co is conveniently on holiday out of the country, and the chairman of the board/ acting CEO thinks his input isn’t relevant to the Strategic Review
- NBN Co have slowed the rollout of FTTP at the direct instruction of Malcolm Turnbull which adds $11b to the cost of the projection of a full FTTP rollout
- Rollout is currently going approximately 20% slower than directly before the election compared to present day (5000 premises to ~4000 premises per day). No confirmation when the slow down started and vague information as to what has caused it.
- Admission that maximum 700m – 900m in length Copper tails were used to estimate the cost of Option 6 in the Strategic Review.
- No confirmation of the number of nodes required for Option 6
and finally
- $41b* (final figure not confirmed due to aforementioned omissions) to guarantee no speeds to anyone.

In light of these revelations, go read http://nbnco.com.au/about-us/our-values.html#trust and see how ridiculous all this is.

I despair for this country.

Here’s the Hansard. It’s a long read…

http://parlinfo.aph.gov.au/parlInfo/download/committees/commsen/f27fdc68...

http://delimiter.com.au/2013/12/18/greens-labor-slam-coalitions-nbn-trai...

" The eventual cost to upgrade to Fibre-to-the-Premises (FTTP) if the Coalition’s approach is implemented will more than treble from the cost of Labor’s approach if it is seen through to project completion.

Turnbull was told this last April when the Coalition’s NBN plan was first announced and the communications minister has been reminded many times over the past year by experts not aligned with one political party or the other. "

This reads suspiciously like another LNP foray into National Communications. Wasn't Howard and his mob warned many times to split Telstra prior to selling it off? Otherwise an almighty dog's breakfast would result . They didn't, it did!

Result - NBN

Here we go again! What is it with politicians, ideology trumps engineering and commonsense.

'House of cards'...When you decide to build on land because it's "cheap" without having it checked by qualified engineers...and when your proposed structure uses structual components that are well past their 'use by date', what do you think will happen? Ah, you haven't got 'round to thinking yet. OK, now I get you Malcolm.

I can't help wondering if it would be better if we simply moved deliberately in the direction of a double dissolution election in July next year, or as much within that time frame as the Constitution would allow.

Contrary to all the propaganda, the last election really solved nothing except to give the ALP the chance to flush itself out and install a new leadership, and for new Liberal and National Party MPs to gain some Parliamentary experience and demonstrate their own need for a new leadership team. Surely the new faces would prefer an entirely new approach to that of Abbott in opposition

Abbott is already something of a lame duck, and his fellow leadership seems decidely talentless. Whichever side wins or loses a mid year election, at least we might get some certainty - and a proper mandate.

It would not be hard to deliberately fulfil requirements for a Double Dissolution. Let's go for it.

Turnbull was made Communications Minister for reasons of internal Liberal Party politics.

Turnbull was popular particularly with young voters. Young voters are also more likely to care about the NBN.

Delivery of an inferior NBN will damage his popularity and reduce his potential for leadership challenge.

Even after only a few months under the Coalition, we are back to the old Howard days of bumbling, incoherent "do nothing" policy that is not in the national interest.

Abbott and Turnbull are hoping the private sector steps in to fill the void left by their incompetence. The trouble with that is we just go back to a free-for-all city-based cash grab by the telcos while those who live in the outer suburbs or the country are left with absolutely nothing.

Australia is rapidly becoming becoming the backward white trash of Asia. A nation full of Homer Simpsons too lazy and stupid to do anything for themselves.

Last line is unfortuneatly partly true.To make it worse a lot of the Homer Simpsons expect those who work hard ,create employment and pay taxes to pay extra so that they can continue their lazy existence.

Hi Graham, your wrong to make statements about debt here because the NBN debt is off budget. Hidden deep in the review report it indicates that between now and about 2025 the difference in cost between the Labor and Coalition NBN approaches will be about $1 billion if maintenance and operating costs are added into the mix. So why pay all that money for 25 Mbps when you can pay $1 billion more for 1 Gbps, traffic class management, QoS, better upload speeds, better capacity, etc., etc.?

The NBN Debt is guaranteed by the government and the government is paying the interest right now.The off balance sheet status was a Labor accountingtrick not to include it in their budgets.

Hi Graham, you should not be implying the government is paying interest etc when it is not in the budget sense. The NBN will be required to pay back the capital and costs like the interest.

Possibly you have missed reading the review report? The little bit about by 2027 the difference in cost is about $1 billion? And at that time under the old plan we would have a shiny new fibre network and under the Coalition's plan we have an obsolete non-upgradeable FTTN network?

Also, possibly you missed the news that NBN Co is now offering 1 Gbps to FTTP customers - albeit at ridiculously high prices.

The use of off-budget models for national projects is nothing new and all governments have done this over the past 30 years so please don't make an argument that does not hold water. I'm not advocating debt but the best use of funds to achieve a forward looking long term solution.

Mark your assuming that the NBN is profitable enough at some point to pay all the accrued interest.That might turn out to be the case but Lazard suggested it would have a negative value of $31Billion.No doubt none of the numbers thrown around will prove to be even close given the magnitude of the project.Right now the risk of the NBN debt is on the taxpayers shoulders and the taxpayer is funding the interest payment.

Hi Graham, merry xmas. There are reports and there are reports. The NBN will be a commercial success if the FTTP was rolled out. Like most things there comes a tipping point where enough people jump on board and then it becomes a must have and the rest jump on board. The recent shift to digital TV took 5 years longer than it should due to government dithering but if you think back you should remember a point where large numbers of cheaper digital ready 42 and 52 inch screens became available and people bought in large numbers.

The NBN is no different. As people were shifted across the uptake would increase and information about usage rates is already showing that people on the NBN have started using a lot more data - why? - because of the speed, reliability, quality and lack of congestion.

But you're right about the need to limit public exposure and that is why I have been writing for three years about the wrong approach being taken with the construction process and the need to speed it up by getting communities involved. Unfortunately the new government is going to pursue the same broken approach and will add the wrong technologies to the mix as well.

Looks like Turnbull will have another Gordon Grech moment.

By the way why is the NBN outsourced? The Australian Government has no history of successfully completing large programs e.g. the Collin Class subs, infrastructure etc.