The National Broadband Network is an unmitigated disaster not just for broadband delivery in Australia, but for how it has contributed to the devaluation of a whole industry sector.
This has been opined many times in these pages; and the release of NBNCo’s latest Corporate Plan on August 30 lays bare how political interference is the real culprit.
The NBN was visionary in its conception by Kevin Rudd and his Communications Minister, Stephen Conroy, but flawed in execution. The real rot started with the “strategic review” of the NBNCo plans initiated after the 2013 election.
How did the ‘clever country’ end up with a $90 billion botched NBN?
The intention of new Communications Minister, Malcolm Turnbull, urged on by Prime Minister Tony Abbott, was clear – discredit Rudd’s brainchild at all costs.
The review predictably concluded that the latest corporate plan was too optimistic and would be too costly. It recommended a change of technology direction from the original plan of FTTP (Fibre to the Premises – still universally recognised as the superior way of delivering high speed broadband) to what became known as the MTM – Multi Technology Mix.
The MTM strategy was a euphemism for a mixture of technologies which would rely on the existing copper network (owned by Telstra) and HFC (Hybrid Fibre Coaxial, owned by Optus and Telstra), in effect throttling “last mile” access by using out-dated technologies.
The justification for the change was the contention that the original plan would cost $64 billion+ (remember that figure) versus the original estimates of $41 billion. The revised corporate plan released in 2014 had the total cost of the network at $43 billion.
It was designed to show how the LNP Government were responsible economic managers. It ignored the fact, acknowledged by anyone who understands telecommunications infrastructure, that the revised network would be incapable of delivering high speed broadband of 100mb or more to everyone who wanted it.
The just released corporate plan reveals the reality of the MTM strategy. The total cost will be $51 billion when the roll-out is completed by the end of 2020. Add to that $3 billion in revenue loss in comparison to the 2014 plan. Add a further $10 billion (at least) which will be required to upgrade the network to be able to deliver the speeds originally planned and the total is $64 billion.
In short – Abbott and Turnbull were right, the network would indeed cost much more than planned, because they delivered to Australia a substandard network at that same predicted cost. All in the name of party politics.
(Corporate plan data and comparisons courtesy of Gary McLaren – former NBNCo CTO.)
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Kim Wingerei is a businessman turned writer and commentator. He is passionate about free speech, human rights, democracy and the politics of change. Originally from Norway, Kim has lived in Australia for 30 years. Author of ‘Why Democracy is Broken – A Blueprint for Change’.