Review an opportunity to make NBN better, not just cheaper



This was published 7 years ago

Review an opportunity to make NBN better, not just cheaper

As difficult as it is for the fast thinkers of the tech world to admit, now is a good time to slow down and assess how Australia can best obtain a world-class broadband network.

Delivering fast broadband to all citizens remains a national priority.

"A strategic review by a new NBN board should help restore faith among those who have been bemused."


Communications Minister Malcolm Turnbull knows Australia cannot afford to stick with technology that's good enough for now but not for 30 years' time. That is why the Herald views Mr Turnbull's role as reason for cautious optimism.

He has made a fair start at preserving the ideal of the National Broadband Network by not ruling out any technology options as he tries to impose financial discipline.

The time it takes will be worth it if the reviews restore public confidence in the project, clarify the benefits and prove the importance of the fibre-cable approach.

A strategic review by a new NBN board should help restore faith among those who have been bemused by the complexity and opacity of the project. An independent cost-benefit analysis will also redress the gaps between Labor's ideal and what is deliverable. And an audit of the NBN project's performance to date will offer some clues as to what pitfalls to avoid.

If the cost of the NBN has blown out from Labor's claimed $44.1 billion to Turnbull's claimed $94 billion, he will be entitled to offer a cheaper alternative.

But, as with so many of the Coalition's campaign promises to review programs, the potential solutions create their own problems. At the core of the NBN problem will be the role of government.

Just as in the case of building motorways, governments remain best placed to drive most big infrastructure projects in the early years until they can be privatised.


The hybrid solution with broadband was for the government to pump in a forecast $30 billion and NBN to borrow $14.1 billion itself.

So that the NBN could attract high enough returns to pay the interest bill, Labor had to sideline Telstra in an $11.2 billion deal and make NBN a monopoly.

The plan was based on assumptions about the costs, revenue and timetable involved in rolling out fibre-optic cable to most Australian premises.

The Coalition won government handsomely with a promise to scale back direct access to fibre for most Australians, meaning the NBN could be completed two years faster for about $15 billion less than under Labor.

The tradeoff was slower broadband speeds.

To his credit, Mr Turnbull has shifted the Coalition's "destroy the NBN" mantra into an approach based on efficiency and picking the best technology to deliver speed with value for money.

But given he plans to end the NBN's monopoly, he must explain how the NBN can compete with rival cable networks and still make money.

The lower returns for NBN in the city also remove the ability to subsidise rural/regional customers where the cost of reaching homes is much higher and where, as such, alternative networks won't bother operating.

Mr Turnbull has to show how very high speeds under his plan will be available for all, not just those in the city. Direct subsidies or increased prices may be a necessary evil.

He also needs to show why it makes sense - beyond saving money - to use Telstra's old copper network as a final link between premises and nodes on street corners and in building basements. The copper is old, hard to maintain and unable to deliver consistently high speeds - at least not with present technology.

Many of those who have the most to gain from high speed broadband will only get the ultra-fast fibre to the home if they pay extra.

It is true Telstra, Optus and smaller networks can offer very fast broadband as well. Some are already doing so. Telstra was also reportedly assuming this extra option would be part of Labor's NBN. But these alternative networks are limited and not as fast.

Some suggest Turnbull will always be able to upgrade to all-fibre later when political, funding and rollout pressures have subsided. Perhaps. But upgrading later is likely to involve duplication, increased costs and years lost.

The Herald trusts Mr Turnbull will use the reviews of the NBN to make it better, not just cheaper.

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