China isn’t getting an NBN, and it doesn’t cost a third of ours, regardless of what The Australian claims.
I want to say something that will shock you: a story in The Australian about the NBN is rubbish.
I know. I know. I’ll just wait a few minutes while you pick yourselves up off the floor, dust yourselves off and get over the shock.
While you recover, allow me to reflect more broadly. At various points I wonder about the amount of time I spend pointing out the idiocy, malice, ignorance or laziness that is routinely dressed up as journalism. It’s a Sisyphean task, but unlike Camus’ Sisyphus, I gain no happiness from eternally rolling a giant boulder of bullshit back and forth. Still, someone has to do it.
And, occasionally, one can have a laugh. We learnt today that the Minerals Council of Australia had hired Henry Ergas to write an independent report on the need for the government to return to WorkChoices and slash red tape if Australia is going to have a last chance at benefiting from the mining boom. And the MCA then dropped the report on Annabel Hepworth, The Australian’s go-to journalist for dodgy industry reports. It was almost as if the MCA, as a kind of personal Christmas present for me, was self-parodically trying to tick every single box in the template for dodgy reports.
Anyway, back to the NBN. ”A billion Chinese to get an NBN for a third of the cost of ours” was the headline of Scott Murdoch’s story today, apparently an “exclusive”:
“During the next three years, Beijing plans to replace the existing copper wire network that serves the nation’s 150 million households with internet access with a fibre-to-the-home broadband network - the same technology used by Labor’s National Broadband Network. The plan shares striking similarities with the NBN but is so far costing China’s state-owned telcos only $10 billion.”
Now, I’m convinced someone has changed the meaning of “exclusive” while I wasn’t looking. Didn’t it used to mean that you were reporting something no one else had? The Chinese broadband story has been widely reported elsewhere — mainly because it’s nearly a year old. It was in December 2011 that China announced its plan to increase broadband speeds. It has periodically been reported again — in September, for example.
But what appears to have prompted Murdoch’s “exclusive” story is a Powerpoint presentation by the ministry responsible for the initiative, the Ministry of Industry and Information Technology, nearly a month ago, which describes the progress of the “Broadband China” strategy in some detail. The detail includes that, so far, the first two stages of the strategy to bring telephony and internet access to administrative villages and townships has cost “in excess of 50 billion”. On current exchange rates, 50 billion yuan is around $8 billion, although the yuan has for a long period been significantly undervalued.
“Now, it barely needs pointing out that rolling out a broadband network is considerably cheaper in China than Australia.”
Now, Murdoch actually admits that the cost of the Chinese rollout is only “so far”. The problem is, the most expensive stage of the Chinese rollout is yet to come. The third stage, which is currently underway but not due to be completed until 2015, is to extend internet services to “natural villages” from administrative villages and townships, right across China. Nor does it mean every household in China will have broadband access, whether by fibre to the home (the first choice) or other means such as satellite. In fact, the MIIT plan specifically says that the goal by 2015 will be urban broadband penetration of 65% and rural penetration of 35%.
That’s plainly a long way short of the 93% FTTH coverage goal of NBN, and means the headline about “a billion Chinese” is manifestly wrong.
Now, it barely needs pointing out that rolling out a broadband network is considerably cheaper in China than Australia. The average annual private sector salary in China in 2011 was just below US$3,900, according to The Wall Street Journal, or about 1/17th of average private sector salaries in Australia. China has a population density of over 140 people per square kilometre, compared to ours of around 3. In any event, we’ll only be able to judge the final cost of the Chinese rollout to its 65%/35% target once it’s complete, and then work out how it compares to the cost of the NBN.
So, China isn’t getting an equivalent to the NBN, the cost comparison is meaningless, the story is a year old and the headline is point blank wrong.
Apart from that, the story is bang on.
Oh, of course, except for this: China has embraced fibre-to-the-home.
Malcolm Turnbull is advocating — we think, because we’re still in the dark about the Coalition’s broadband policy — fibre-to-the-node, with Australia’s ancient, expensive-to-maintain copper wiring carrying to 21st century the last metres into homes. Which makes an article on the Chinese broadband rollout, on a conference website featuring Malcolm Turnbull, a tad ironic.
Perhaps the reason why The Oz waited so long to run the story was because they were desperately trying to find a way of avoiding reporting that China had embraced the same reviled broadband strategy as our hated Labor government?