Tuesday, 09 April 2013 14:53

Coalition’s NBN policy – now it’s official Featured

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Opposition Shadow Communications Minister Malcolm Turnbull has launched the Coalition's broadband policy.

He says it will much cheaper than the NBN and bring broadband to most Australians earlier. But it will mean slower connection speeds.

The odds are on a Coalition victory in this year’s election. By logical extension, therefore so are the odds of its broadband policy being adopted.

Malcolm Turnbull has been spruiking the Coalition’s policy (and criticising the Government’s) for years now, so the release of its formal strategy contains no real surprises. But it does put some figures on what it is proposing. It also takes the obligatory swipe at the Government’s and NBN Co’s projections.

Flanked by Opposition Tony Abbott, Turnbull announced the Coalition’s policy at a press conference in Sydney. The preamble to the policy reads:

The Coalition will deliver fast, affordable and reliable broadband to all Australians. We will complete the National Broadband Network as quickly and cost-effectively as possible, using a mix of technologies that will provide high speeds at a reasonable cost.

Our goal is for every household and business to have access to broadband with a download data rate of between 25 and 100 megabits per second by late 2016 and between 50 and 100 megabits per second by 2019. Downloads average less than five megabits per second at present.'

Suburbs, regions, towns and business districts with the poorest services and greatest need for upgrades will receive first priority.

Key prices for a Coalition NBN will be capped nationally, ensuring Australians in metropolitan and regional areas alike can obtain services at fair prices. In contrast, under Labor's NBN wholesale charges per user will triple by 2021.

We will resolve the greatest failure of the current broadband policy: the up to two million households and businesses across Australia that cannot get basic fixed broadband after more than five years of Labor government.

No surprises there, but lots of promises and assertions. We now have three models to compare: what the Government and NBN Co say about the NBN, what the Opposition says about the NBN, and what the Opposition proposes as an alternative. To that we could add what the Government says about the Opposition plan, but it has yet to do a detailed comparison.

“They rely on misleading statistics and misleading data to try and make these scare campaigns,” said Conroy on ABC radio yesterday. “This is a classic policy-free zone claim by the Coalition.”

Comparisons are odious – Who’s saying what

 

NBN (according to the Government)

NBN (according to the Opposition

Opposition Plan

Capital cost

$37.4 billion

$71 billion

$20.44 billion

Total funding

$44.1 billion

$94 billion

$29.5 billion

Completion date

2021

2025

2019

Wholesale / month

 

$90

$66

Retail / month

$90

$62

$38

Connection mode

FTTP

FTTP

FTTN

 

A glance at the table shows why the Opposition is so intent on talking up the cost of the NBN. If the comparison were simply between the Government’s plan and the Opposition’s, the Government would appear to offer the better value. Yes, it’s more expensive – the NBN will cost about half as much again. And yes, it will take longer, but only by two years.

For that we get FTTP. Fibre into every home and office, except those too remote (about 7% of premises). With the Opposition plan we get FTTN, with existing copper or new fibre (which would be paid for by consumers rather than the Government) from the node to the premises

 Of course the picture quickly changes if we compare the Opposition plan with what it says will be the actual cost and timeframe of the NBN. Then the Opposition plan seems vastly better. But the picture also changes –in the opposite direction – if we factor in the cost that the private sector would have to pay to connect fibre to the premises that want it. In the UK that is costing about $3000 per connection. The Coalition plan says:

“Fibre generally should run all the way to premises in new ('greenfield') housing estates and wherever copper has to be replaced, unless this isn't commercially feasible. Fibre would also typically extend to anywhere there is sufficient demand to justify it – business centres, industrial and commercial parks, schools, hospitals, medical centres and universities are just some examples.

“The Coalition acknowledges that some users may want higher speeds than can be provided over FTTN, before any evidence of such needs in the broader market, and are prepared to pay for it. The Coalition also acknowledges that market needs will clearly evolve over time, and eventually may require further upgrade of the network in areas where fibre has not been extended to user premises.”

The Government will now no doubt prepare a detailed rebuttal of the Opposition’s plan. Meanwhile, the debate will drag on. Independent MP Rob Oakeshott, Chairman of Parliament’s NBN Committee, has called the Coalition policy “madness.” He echoed the words of his fellow independent Tony Windsor – “You do it once, you do it right, and you do it with fibre.”

Both independents said at the time that the NBN was one of the key reasons they supported the Government rather than the Opposition in the negations following the hung parliament in the 2010 election.

There are sound argument for both the Governments FTTH plan and the Opposition’s FTTP plan, but we are not hearing them. The NBN in its current form will most likely be collateral damage in an election decided on wider issues.

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire. He is one of Australia’s longest serving and most experienced IT journalists. He is author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’

He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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