What is the future for the NBN under the Coalition?

NBN Co has a 10-year plan for Australia’s high-speed broadband future, but a change in government after September’s federal election – with the latest Newspoll showing the Coalition with a lead of 52 per cent to Labor’s 48 per cent on a two-party preferred basis – has created uncertainty about the project’s future.

Shadow broadband minister Malcolm Turnbull has made it clear he plans to do things differently with the National Broadband Network (NBN), which is Australia’s largest ever public infrastructure project.

NBN Co has also thrown the doors open to a potential change in the roll out of the network, with NBN Co CEO Mike Quigley recently calling for a study from the Communications Alliance to decide what is the best technology to use to roll it out.

However, little is know about the Coalition's NBN policy other than it would employ fibre-to-the-node (FTTN) for large parts of the network, rolling out fibre to cabinets in the street and using copper for ‘last mile’ connection from the cabinet to premises.

The shadow minister has said that fibre-to-the-home (FTTH) would still be rolled out to new housing estates (greenfields developments).

This compares to the Federal Government's roll out of the NBN utilising FTTH, which delivers fibre to the doorstop of premises, for 93 per cent of Australia.

Turnbull has also said he would retain Telstra and Optus’ HFC networks, which are based on a combination of copper and optical fibre, in order to remove “barriers to competition” with the NBN.

If the Coalition wins the election it won’t be the first time an incoming government has been tasked with completing an already in-progress infrastructure project, and Nick Economou, senior lecturer in politics and social inquiry at Monash University, said there may be limits to how much a new government could change the direction of the NBN.

One example is the construction of a desalination plant in Victoria, which was announced by John Brumby’s Labor government in late 2007 and includes a 30-year contract with the AquaSure consortium.

The Liberal Party's Ted Baillieu became premier in Victoria at the end of 2010 and said the Liberal government was stuck “with a very expensive white elephant” because it would have cost too much to extricate itself from the project’s contracts.

“The opposition went bananas over [the desalination plant] and pilloried it every waking moment of their existence. But upon coming to government, when confronted with the cost of extracting itself from all those contracts, it said ‘no, no, we’re more or less tied in’,” Economou said.

He expects the same will happen with the NBN if the Coalition wins the election.

“I wouldn’t be at all surprised if there were only minor alterations to the direction of NBN policy after the election [under the Coalition],” he said.

However, independent MP Rob Oakeshott has said it is still possible for the NBN plan to be changed, but “the worst thing that could happen now is a complete change of direction”.

NBN Co’s future under the Coalition

Economou said it is possible that Turnbull might try to dismantle NBN Co and create a new organisation in its place.

The shadow minister has been a staunch critic of the NBN wholesaler, blaming the company for not having a “transparent approach to information” and making it difficult for the Coalition to carry out a costed analysis of its alternative NBN plan.

“It’s a statutory authority,” Economou said. “Now of course statutory authorities have a certain degree of autonomy from ministers, so what presumably the Coalition government will do is they will go back to the enabling legislation, redraft it, alter its charter of operation and I dare say it will then move to get rid of whoever’s running it at the moment.”

In order to replace NBN Co, a Coalition government would need to pass new legislation.

“If the Coalition did not control the Senate, this could prove to be tricky,” Economou said.

What will a Coalition NBN look like?

In 2010 the Coalition said it would demolish the NBN. Since then, the Coalition has changed its tack, indicating it won’t demolish the network but roll it out faster and cheaper.

Turnbull recently stated the Coalition would honour existing NBN contracts, which include the $11 billion Telstra contract and the $800 million Optus agreement and suggested it might introduce a plan where users could pay to have fibre extended to their premises.

However, rolling out FTTN instead of FTTH would require altering existing contracts, something which Telstra’s CEO, David Thodey, told the Australian is out of the question if the contract’s dollar figure is changed.

While speeds up to 100Mbps are achievable on the FTTH NBN, Turnbull has said most people would be able to achieve speeds of 50Mbps on a FTTN-based network, while those farthest away from the node will experience speeds of 25Mbps and a third of people will achieve speeds of 80Mbps.

This assumption is based on the experience in the UK, Turnbull has said, and he has refused to confirm what speeds Australian consumers would be able to access under the Coalition’s NBN.

Turnbull also has refused to provide figures on how much sooner or cheaper the Coalition would be able to roll out the NBN, telling ABC Radio’s AM program it is unable to produce a costed analysis of its NBN plan as it is unaware of the “extent to which [NBN Co] have made commitments”.

Regardless of what road the Coalition takes, Economou said it will have several challenges ahead.

“On one hand there will be the principles that they set out when in opposition about the need to find a more cost-effective way of doing things,” he said.

“On the other hand I think they’ll be under enormous pressure from rural constituents, who are usually quite strong supporters of the Coalition, to go ahead with the aspects of the broadband rollout.”

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Australia needs a ubiquitous NBN: former ACCAN chairman

Michael Fraser, director – Communications Law Centre at UTS and former chairman of ACCAN, believes in order for Australia to achieve its full potential in a global digital economy the country needs to roll out ubiquitous high-speed broadband.

“I think that the approach that the government is taking is a visionary approach. It is a ‘build it and they will come’ sort of approach, but I think it has an important element to recommend it,” he said.

Under the current Labor plan, most Australians will potentially have access to 100Mbps.

This type of ubiquitous high-speed broadband network will allow other services to be rolled out off the back of it, such as education, healthcare and social services, Fraser said.

“Whether you agree with [Labor’s] vision or not depends on your view about whether those services will indeed develop, that if you build such a physical infrastructure, new businesses, new social services [and] community services will populate the network,” he said.

“I think there’s a great capacity to build those kinds of services once you have the infrastructure in place.”

Fraser called the Coalition’s approach an incremental one and doesn’t believe it will deliver the same opportunities as Labor’s FTTH plan – in order to provide national healthcare services or education, everybody needs to have access to the same infrastructure. If they don’t, changes would take longer to penetrate throughout a community and the rest of the country, he said.

Fraser pointed to the example of Apple’s approach to rolling out new products.

“If they had gone out into the market and said … ‘do you need an iPod?’ or ‘do you need an iPad?’, not many consumers would have said that they needed it, but [Apple] had the courage to build these new technologies,” he said.

“So sometimes you have to make a strategic step-change and use technologies in imaginative new ways and I think the NBN is an example of that … An incremental approach doesn’t achieve that network effect.”

However, Fraser conceded it will be some time until this kind of creativity emerges from the NBN and it won’t be until the rollout reaches 30 to 40 per cent that such a transformation will occur.

Election 2013

Despite being one of the most highly contested topics in the tech industry, Economou said the NBN will not play a major role in the broader public debate during the federal election.

Instead, it is likely to be overshadowed by other issues, such as the mining tax, the carbon tax and apparent leadership problems in the Labor party, he said.

And despite the Coalition leading by just 4 per cent in the recent poll, Economou believes there will be a clear winner come September.

“I don’t think [the NBN] will [be a big election issue] because I think the next federal election will be a landslide defeat of the government and a whole range of policy issues will be pushed aside because it will really be about the competence of the government,” he said.

“I think [Labor will] be defeated really badly.”

Follow Stephanie McDonald on Twitter: @stephmcdonald0

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