NBN Takeup And The Coalition 'Real Solutions' Broadband Statement

NBN Co has just updated its connection figures for the National Broadband Network (NBN), revealing that as of December 2012 34,500 premises had been connected to actual NBN services. In the same week, the Federal Opposition has released its ‘Real Solutions’ policy document, which contains some details of its own plans for the future of broadband — a future where the NBN’s role is somewhat uncertain. Let’s try and make sense of the NBN data and the new Coalition claims.

Networking picture from Shutterstock

The numbers are bound to trigger predictable rhetoric from NBN opponents along the lines of “we’ve wasted all this money and no-one wants it”, while making broadband enthusiasts who aren’t connected yet wonder what’s holding back all those people who could be on the network but aren’t. That’s the nature of NBN discussion. But what have we learned this week?

The NBN Numbers

At the end of December 2012, 34,500 people had connected to the NBN. That number is up considerably from June 2012, when the figure was 13,600. The vast majority of those users to date (23,100) are on satellite, which has the advantage of being instantly available to qualified users if they install suitable receivers. By June 2013, NBN Co is predicting those scales will have tipped, with 54,000 fibre connections against 47,700 satellite and wireless connections. But that’s a prediction, not a current number. Photo: Lisa Maree Williams/Getty Images

Actual adoption is very different again from potential access. Earlier this month, NBN Co said that it had begun construction in areas with a potential reach of 784,592 premises. By June this year, it is due to have actually passed 286,000 premises — just under 10 times the number of active connections right now. The takeup total will presumably be higher at that point, but it will be a long time before it even approaches 50 per cent at this rate.

In looking at the takeup rates, there’s a point worth remembering: the copper network hasn’t been switched off yet. While there are speed benefits to moving to an NBN connection, no-one has yet been obliged to make the choice. As we’ve pointed out before, the NBN isn’t compulsory — you can refuse to have it connected. Eventually (assuming the NBN continues in its current form), the copper network will be disconnected and you’ll be reliant purely on mobiles or satellite if you don’t choose an NBN connection, but we’re not at that stage yet. Depending on the politics of the day, we may never get there.

The Coalition Solution

In these discussions, it’s always worth remembering that the NBN in current form isn’t due to complete its rollout until 2021. That’s a long way off, but it does represent a commitment to a specific time frame, with milestones set along the way. If you want to suggest it could be done quicker or more efficiently, you’d need to explain what you’d eliminate, the alternative technologies you’d use and how you would deploy them more quickly. You might hate the NBN on principle as government-funded infrastructure or believe there are better solutions that could be deployed, but it’s a major national infrastructure project, which is not something that can be replaced with a one-sentence statement. Photo: Sergio Dionisio/Getty Images

We still haven’t yet seen a detailed plan from the Federal Opposition for how it might alter or restrict the NBN. But its ‘Real Solutions’ policy document launched this week does contain some broad statements on broadband, including the claim that the plan will “deliver broadband faster, sooner and at less expense to taxpayers and consumers than Labor’s National Broadband Network”. Here is the detailed broadband section from that document:

  • We will for the first time do a fully transparent cost-benefit analysis of the National Broadband Network, to find out the quickest and most cost-efficient way to upgrade broadband to all areas where services are now unavailable or substandard. This is the cost-benefit analysis Labor didn’t do before committing to spend tens of billions of dollars on the NBN.
  • We will roll out super-fast broadband using whichever is the most effective and cost efficient technology and we will use existing infrastructure where we can.
  • We will roll it out faster to high priority areas.
  • We will end billions of dollars of wasteful spending on the NBN and deliver more of the modern infrastructure we urgently need while encouraging competition wherever possible to put downward pressure on prices.

The key obvious element that is missing from this statement is any definition of what “substandard” means (or “super-fast”). Is that current ADSL speeds? ADSL2? Without knowing that, it’s hard to see how a cost-benefit analysis would work.

We also have no firm commitment on technologies. Ultimately, when you plan a network, you have to pick something specific to deploy. NBN Co has been criticised for using 1GB equipment at fibre endpoints when 10GB would offer faster speeds. But it can only be criticised on that point because it has committed to a specific technology (albeit one which can be upgraded; you can change the endpoint gear without replacing all the fibre).

“We will use existing infrastructure when we can” is an impossibly vague statement. If that means maintaining existing copper networks, then the deal with Telstra to access those pits will have to be renegotiated again. That won’t be cheap, and it’s certainly hard to see it being cost-effective at this point. What other infrastructure is being proposed? Wireless doesn’t scale. Cable deployments are limited and shrinking.

The “billions of dollars of wasteful spending” line appears to be based on the fundamental Coalition assumption that infrastructure spending is best left to the private sector. Some people will agree with that; some won’t. However, simply stating that we shouldn’t spend money doesn’t address any of the evident problems with the existing broadband infrastructure in Australia.

The NBN is a massively expensive undertaking, but it is one that is being funded as an infrastructure investment that is expected to make a return. A statement that wasteful spending will be eliminated is nothing more than an ambit claim. This particular statement doesn’t even mention whether fibre-to-the-premises is the favoured Coalition approach, something that has often been suggested as a possible approach. There’s also no discussion of how it would wind back existing NBN contracts if it did choose alternative technologies (whatever they are).

Tellingly, this statement doesn’t actually suggest that the Coalition would kill the NBN altogether, merely that it would make it more “efficient” in some largely unspecified fashion. That might be helpful for Coalition candidates in areas where broadband is awful and where the NBN is due in the next three years. But if you’re going to claim billions of dollars in saving, you really need a lot more detail than we’ve been offered here. It’s hard to compare the 96-page NBN Corporate Plan with a 150-word outline and not have the latter come out looking half-formed.

As for the statement that competition will be encouraged? Our comprehensive Planhacker guide to available options lists close to 400 currently available plans which vary widely in pricing and features. The notion that there isn’t competition in the NBN environment already doesn’t stand up.

The NBN project deserves close scrutiny and criticism. A common complaint amongst Lifehacker readers is that the selection of deployment areas seems driven as much by political needs (placement in multiple states and in marginal seats). The Coalition document touches on that theme by suggesting that it will service areas of “greatest need”, though again there are no metrics specified for that. Does a suburban area stuck on pair gain deserve broadband more than a rural community stuck on satellite? Is it unreasonable to focus on Tasmania (as the NBN did) as an area of evident need?

If experience is any guide, the discussion isn’t going to even approach that basic level of sophistication in most quarters. We’ll just see more rusted-on arguments about waste, devoid of any recognition of the problems in the current wholesaling system or the inherent limitations of the copper network. Equitable high-speed broadband access is a tough problem to solve, and one where fundamental political philosophies clash unpleasantly with technical and fiscal realities. The devil is in the detail, and we still don’t have a lot of that.

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