Rubbish NBN ‘Policy’: The Coalition At The Podium

There’s lots of arguing about the National Broadband Network (NBN), but there’s very little actual discussion. Positions on both sides are now so rusted on that the chance to discuss it meaningfully seems to have entirely evaporated, and the need to actually justify a position or contemplate market reality seems to have disappeared as well.

Yesterday, at the Kickstart Media Forum in Queensland, Liberal MP for Bradfield and former Optus executive Paul Fletcher offered a detailed presentation on the Coalition’s view of why the NBN is a bad idea. It was not an edifying spectacle. Indeed, as one of my colleagues sagely observed, it was more like the Sylvia Plath version of a keynote speech than an actual statement of how we could improve the status of broadband in Australia. “It is timely to reflect on the proper role for government in making ICT policy,” was Fletcher’s opening statement, but that never happened.

I’ll give Fletcher credit for offering a discussion that was more sophisticated than the usual “this is going to waste $50 billion and I hate it” ranting that talkback radio and most of the Coalition normally adopts. And I’ll also give him credit for taking questions from journalists, even if he failed to answer most of them. But his position — and by extension that of the entire opposition — doesn’t stand up to scrutiny.

In part, that’s because the assumptions underpinning it were never examined. Fletcher took as gospel the notion that services delivered by the private sector are inevitably, inextricably, unquestionably better than those delivered by government. This viewpoint is simply taken for granted, ignoring the possibility that in a country with a small population and a large area, some services aren’t going to ever be made available if we wait for the private sector to deliver them. If the private sector was the only provider, how many hospitals do you think we would see outside of capital cities? Schools? Highways?

But even allowing for differences on that question of political philosophy, Fletcher’s position was hopelessly contradictory. On the one hand, he argued that the biggest problem with the NBN is that we can’t outline dozens of reasons why the higher speeds of the network are actually needed:

If you can’t tell us what people are going to use the technology for, you do not have a very persuasive case.

On the other hand, he suggested that one of the challenges of technology is that you can’t predict what will be popular:

You can’t mandate take up. You cannot know in advance which applications people will find useful and incorporate into their lives, and which applications will leave them cold.

If you believe both of these positions, you’ll never do anything. We can’t predict what’s going to happen, so we just have to wait and hope the private sector might offer something. The history of ADSL is Australia suggests that waiting can take a very long time and doesn’t result in great consumer outcomes.

On that point, Fletcher also attempted to argue that the privatisation of Telstra had resulted in universal competition for providing services, especially in terms of unbundled local loop (ULL) offerings that allow consumers to switch away from Telstra entirely:

It was ULL based competitors who were the first to introduce ADSL2+ and forced Telstra to respond. It was ULL based competitors who were the first to introduce naked DSL – so a customer could take a DSL service without also having to pay $30 a month for a voice line rental service that the customer may well not require. In other words, it was ULL based competitors who drove prices down in broadband

As anyone who has tried to sign up for naked DSL knows, this is basically pure horseshit. If you can get naked DSL on your exchange at all, you will face a wait of a month or more while Telstra disconnects your service and the new service is added, even though this doesn’t normally require a change in your premises. If you move into a new house, Telstra might have to connect a service you will never use simply so you can acquire a service from someone else. It is a slow and flawed process, and Telstra has done everything it can to make it difficult.

Furthermore, those competitive options didn’t appear evenly or sensibly. Telstra’s first rollout of ADSL2+ only happened on exchanges where competitors had already appeared; if there was no competitor (often the result of Telstra, which controls the exchanges, saying there was no room for additional equipment), then no services were offered. There are still plenty of areas in capital cities where that remains the case, let alone what is happening in regional areas.

It’s the question I never see answered by NBN critics: if the NBN didn’t exist, what did you propose to do to handle the obvious market abuses by Telstra: the blocking out of rivals from exchanges, the selling plans to consumers at lower rates than you sell it to wholesalers, the lousy service via pair gain lines?

That situation was created when the coalition privatised Telstra, and in its decade in government the problem was never resolved. Quite aside from the speed improvements, the NBN forces Telstra to give up its wonky monopoly control of the copper network and ensures services can be offered by any provider who wants to sign up. I’ve yet to hear the Coalition explain persuasively how it would achieve the same result.

Fletcher stated when questioned that “separation is a desirable outcome”, but didn’t explain how that would be achieved. It wasn’t a point he made in his actual speech, even though that was meant to outline how broadband would be improved. Given that the Liberal/National coalition never pursued that outcome when privatising Telstra or in the period that follows, it’s hard to take the assertion seriously.

One of the few bits of concrete policy the opposition has is the notion that there should be a national database identifying existing speeds at every Australian household:

The Coalition has called for comprehensive and transparent database identifying the broadband speed available to each premises.

Fletcher couldn’t explain how this database would be created or what it would cost, beyond suggesting that the carriers already have this data. Balderdash. Try moving house and asking Telstra what options will be available at your new address. Try asking any mobile carrier if you’ll get coverage reliably in a particular location. Getting this data will be a very expensive process, and having no explanation of how it will be done underscores the lack of actual policy. Solving Australia’s broadband lottery — the reality that when you move house, you’ll have little idea of what you’re going to get and good odds of no competitive choices at all — is going to take more than an uncosted list.

Following his speech, I asked Fletcher what measures the coalition would introduce to try and eliminate the current ludicrous delays in service switching for ULL — an obvious problem if you believe, as Fletcher does, that competition is all that is needed to provide better service. He had nothing to offer. He agreed that there was a problem:

Are there flaws in ULL provisioning? I continue to believe there are.

But asked — repeatedly — how that acknowledged market problem would be resolved under coalition policy, Fletcher had, quite literally, nothing to say. He simply returned to his mantra:

It has been a tangible demonstration of competition.

Sadly, this is what it seems broadband discussion is fated to always be like. You don’t need any degree of consistency, any willingness to really engage with the issues, or anything like an open mind. You’re either for or against, and you don’t have to make sense. Contradicting yourself? Not a problem. Ignoring problems your party’s own policy created? Standard operating procedure. It’s a lousy way to conduct politics, and it’s a lousy way to improve broadband. And if we’re going to get a change of government in the near future, it’s a lousy omen for rational decision making in the future.

The right role for government in ICT policy [Paul Fletcher]

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