Tuesday, 4 March 2014
National Broadband Network
Not many people would have heard of the Danish scientist Jakob Nielsen nor realise his relevance to one of Australia's current political debates. Dr Nielsen has a PhD in human-computer interaction and worked for various technology companies, including Sun Microsystems, before founding his own company. He also lent his name to Nielsen's Law, which states that internet bandwidth for high-end home users will increase by 50 per cent every 21 months. In other words, demand for broadband speed will keep rising exponentially.
For such a geographically vast nation as Australia, in an increasingly digital world, the success of our economy relies on overcoming distance. This means fast broadband. This is why Australia needs Labor's fibre-to-the-premises national broadband network—the real NBN. If we accept Nielsen's Law, the users who are happy with 25, 50 or 100 megabits per second now will be demanding 75, 150 or 300 megabits per second by 2019. By 2024 they will be demanding up to 1,000 megabits per second, which cannot be delivered without fibre to the premises.
At the end of 2012, Australia was ranked 40th in the world for broadband speed, with an average of 4.4 megabits per second. Yet new broadband applications are emerging in business, community and government services that demand faster and faster speeds. For example, businesses storing large volumes of data need higher bandwidth to back up regularly to offsite servers or cloud storage; a hospital delivering health services to several remote areas simultaneously via telemedicine will need enough bandwidth to stream several high-quality videos; virtual classrooms require high bandwidth, not just to stream content from videoconferencing but also for the content that is being shared among the students, which could also include high-definition video. As these applications become popular, several users in the same household, business, school or hospital will want to access them at the same time. But we need faster broadband speeds, not just for those applications but for the applications that have yet to be discovered.
That is why I think it was quite profound that when Mr Turnbull, then shadow communications minister, said he could not imagine why anyone would need a 100 megabits-per-second broadband connection, the then minister, Senator Conroy, pointed out that that was a failure of Mr Turnbull's imagination. Another good reason why we need the full rollout of Labor's NBN is that the coalition's policy is a shambles. We know that the Minister for Communications, Mr Turnbull, received 154 pages of secret advice shortly after the election—advice which was highly critical of their policy.
Among the criticisms of the coalition's fibre-to-the-node network were: the policy to build the NBN in two stages, delivering speeds of 25 megabits-per-second by 2016 and 50 megabits per second by 2019, will cost more and take longer; a minimum speed of 50 megabits-per-second cannot be guaranteed with copper anyway; a fibre-to-the-node network will result in 30 per cent less revenue, making it more difficult for NBN Co to raise debt financing; the cost of fixing Telstra's ageing copper network is unknown to NBN Co and even to Telstra. Also, the cost of maintaining the network is estimated to be between $600 million and $900 million a year, which, by the way, was not even considered in the coalition's pre-election costings; a managed lease agreement with Telstra for the copper network could create issues with the structural separation of Telstra, which is an important initiative if we are to achieve a truly competitive telecommunications industry; and a fibre-to-the-node network will have to be upgraded in future by deploying fibre closer to end-user premises to meet demand for higher speeds. This will result in higher capital costs in the future.
This is the real strategic review of the NBN, rather than the published review that was produced by Mr Turnbull's handpicked advisers, so he could get the answers that he wanted to hear. The failed broadband policy the coalition took to the last election—the 22nd in a series of failed policies—is now known to the Australian public as 'fraudband' because of its sheer inadequacy in meeting Australia's future needs.
But the fraud goes even further, because the policy being put forward by the coalition now falls well short of the policy they took to the election. First of all, the minister has abandoned his promise to deliver minimum speeds of 25 megabits-per-second to every Australian through the NBN by 2016. In fact, despite claims by those opposite that they will deliver the NBN faster than Labor, construction of the NBN has actually slowed down under the Abbott government.
In response to questions in the Senate Select Committee on the National Broadband Network in December last year, the CEO of NBN Co, Dr Ziggy Switkowski, confirmed that the rollout of the NBN would slow from 5,000 premises per week to 4,000 premises per week under the 'fraudband' model. There were repeated promises by the coalition to honour existing contracts when it came to the rollout of the NBN.
On 17 August, the communications minister, Mr Turnbull, was quoted in Tasmania's TheExaminer newspaper as saying:
… the alternative would be to breach them …
that is, the contracts—
and that is a course we would not countenance.
There is no doubt that thousands of Tasmanians voted federally for the Liberal Party in the mistaken belief that they would receive superfast optic-fibre-to-the-premises broadband regardless of who won government. I sincerely hope that the Tasmanian people do not fall for that trick again in the coming state election.
The government's decision to instead use a mix of technologies—I would call it a hodgepodge of technologies—for the rollout of their second-rate NBN has resulted in the bizarre situation where some urban communities are in a broadband lottery, where the quality of their broadband service literally depends on which side of the street they live on. For example, people living on one side of Leslie Street in Launceston will receive fibre-to-the-premises, whereas those living across the road will receive Mr Abbott and Mr Turnbull's second-rate 'fraudband.' That means, while the service on one side of the street has peak speeds of 100 megabits-per-second, increasing to 1,000 megabits and even more, their poor cousins across the road will be stuck on a paltry 25 megabits-per-second, unless they want to shell out up to $5,000 for an optic fibre connection to their home.
Last week, NBN subcontractors rallied in Hobart against the government's broken promise. Many of them hired staff and invested millions of dollars in equipment, which is now redundant because the government has abandoned a fibre-to-the-premises rollout. These small family businesses, such as Bill Clark's small contracting firm, which has been in his family for four generations, are now going bankrupt and hundreds of staff are being laid off. So much for this government's promise of creating jobs!
At a press conference recently in Hobart, Mr Abbott refused to respond to questions about his broken promises to the Tasmanian people. The best he could come up with in response to the media's question was—and listen to this:
I think we've had a good go on this issue and we'll go onto other issues if you don't mind.
Luckily, one of the media did mind and a journalist asked a follow-up question:
Do you accept that it's a broken promise to no longer commit to full fibre to the premises rollout given what was said by Liberal Party candidates and members before the election?
Mr Abbott's response:
Are there any other subjects people want to ask questions about?
Perhaps Mr Abbott should take some of his own advice when it comes to his broadband policy. Speaking at his press conference in Tasmania, Mr Abbott said:
If you want things done, if you want to go ahead as a State and as a nation let's have the State Government and the Commonwealth Government working together.
While the Prime Minister seemed to be implying that a coalition government in Canberra would be more cooperative with a Liberal government in Hobart, the latest overtures for cooperation by Tasmanian Liberals have been laughed off by this government.
The Tasmanian opposition leader, Will Hodgman, went cap in hand to Sydney to convince federal communications minister, Mr Turnbull, of the merits of a full fibre rollout and came back empty handed. It is to his credit that Mr Hodgman has finally come to the realisation that his federal colleagues are selling Tasmanians short when it comes to broadband. After all, he has been unusually silent on a raft of other federal cuts affecting Tasmania, such as the cuts to regional development programs, crime prevention grants, the Midland Highway and Commonwealth agencies in Tasmania. That is in addition to the money Mr Abbott is ripping from Tasmanian pockets by cutting the schoolkids bonus.
I would like to remind those opposite that their leader, our nation's Prime Minister, promised the Australian people before the election that he wanted to lead a government of no surprises. He wanted to lead a government that would underpromise and overdeliver. When it comes to the NBN, Tasmanians have got a very nasty surprise indeed from the so-called government of no surprises. Far from underpromising and overdelivering on broadband policy, this government has done the complete opposite.