NBN, the Blowhole and other political analogies

As the NBN creeps towards becoming a reality with its second mainland launch, David Havyatt ponders whether we are seeing real policy discussion or merely a standard conservative ploy.

Kiama is most famous for its Blowhole. Here the periodic rush of water into a confined tunnel results in irregular eruptions of spray from a hole at the top.

It really is a good metaphor for much of modern politics. 

It was somewhat appropriate that last week Kiama was the latest place where the NBN caravan visited to officially “switch on” the second mainland release site. 

But just as we start seeing the NBN realised the Coalition has announced its new alternative policy. 

The question is whether this is a real alternative policy or just more of the politics of opposition for opposition’s sake.

Conservative approach

Despite the fact that Malcolm Turnbull disagrees with his party’s approach to climate change, his approach to broadband policy has been pretty much from the same playbook.

First, try to create doubt about the need for any change; in this case that no one has any need for higher speeds.

Second, attack the Government’s proposal as being too costly or damaging for the benefit realised; in this case by coming up with some speed increasing alternatives that supposedly cost less. 

Turnbull tried at first to convince us all that we only needed wireless, a position that still gets it’s a push with every technology announcement like DIDO. But the wireless sector has explained they need fibre to base stations, and that even with greater capacity you still need more base stations than citizens find acceptable.

As the wireless claim collapsed Turnbull tried to convince us that fibre to the node (FTTN) would do.  His new plan uses FTTN but “done in a manner which facilitates a future upgrade to FTTH”. 
In other words you don’t actually save the cost of building FTTH, you simply defer it.

Third, make the venture sound risky because no one else is doing it.  Turnbull’s latest attempt at that is to contrast the “costly” Australian NBN plan with the cheaper New Zealand one – ignoring totally the difference between 75 percent FTTH coverage in New Zealand and the 93 percent coverage in Australia.

That difference is entirely in regional Australia – exactly the area that Fiona Nash and Barnaby Joyce proposed [pdf] should be fibre connected in 2005.

Keeping Telstra hostage to politics

The core of Turnbull’s plan is a new structurally separated Network Co that would bid for the FTTN network build. 

Turnbull’s plan is predicated on Telstra voluntarily separating to create Network Co.

He no doubt has forgotten that what he is proposing is basically what the ALP took to the 2007 election, a plan that collapsed under two facts. 

The first fact Telstra’s refusal to participate in the NBN tender unless structural separation was not required.  In their letter [pdf] they wrote:

Telstra believes that fruitful discussions can occur in a timely way if both parties proceed on the basis that … the further separation of Telstra is not on the agenda.

Turnbull provides no evidence that the expert panel’s conclusion was wrong. He provides no view of how he would propose to get Telstra to agree to structural separation – especially since he claimed he would not “hold a gun to Telstra’s head” of denying access to 4G spectrum if they didn’t agree to separate. 

The second was the conclusion of the expert panel on the NBN1 RFP that:

The Proposals have also demonstrated that rolling out a single fibre-to-the-node (FTTN) network is unlikely to provide an efficient upgrade path to fibre-to-the-premises (FTTP), because of the high costs of equipment associated with rolling out a FTTN network that would not be required for a FTTP network (i.e. FTTN is not a pre-requisite for the provision of FTTP).  {Note FTTP and FTTH basically refer to the same thing}

The proposition that going straight to FTTP rather than through FTTN is potentially testable through a cost-benefit analysis. 

The coalition proposes putting the question of the appropriate technology mix to the Productivity Commission, where the chair of the expert panel now happens to reside as a commissioner.  But the policy is entirely predicated on the Commission giving different advice to that of the expert panel.

We spent ten years in telco policy from 1996 to 2006 where everything was viewed through the prism of Telstra privatisation, and by consequence everything Telstra did was subject to politics.
Turnbull is really trying to do this again. 

David Thodey, in announcing the details of the final agreement with NBN co and the Government, was at pains to point out that the shareholders were going to be asked to vote on the best outcome for Telstra given the policy, not to vote on the policy. 

Turnbull is appealing to shareholders with the hope that if they refuse the deal then they might get an alternative policy from the coalition that offers them more value.  The real question is why Telstra and its shareholders would think that Malcolm’s version of separation is any better than that which they rejected in 2008.

The reality is he is offering them the prospect of remaining hostage to politics for at least three more years.

Politics by analogy

As the coalition employs its array of conservative tricks, we are being subjected to an array of bad politics by analogy. 

Stephen Conroy asserts that Turnbull’s plan is akin to building the Harbour Bridge with one lane, while Turnbull assets Conroy wants to build a six lane freeway to every farm gate.

This probably just demonstrates that politics truly is the eighth layer of the OSI model.

A great deal of confusion is generated by the fact that we need to build infrastructure for future events, not current ones.  Wayne Swan at the Kiama launch perhaps summed it up best: "We need the NBN to tap the unknown possibilities of the future."

It would be nice to think the policy discussion could focus on achieving the aspirations of the Australian people, and not dumbing it down to the simple politics of opposition.

What are the real policy issues that the coalition and government need to address?