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Apr 8, 2013

Ninety billion maybes: 13 questions about Turnbull's NBN

Some time this week we will see “the 12-page costing” for the Coalition’s broadband policy. Stilgherrian lists 13 questions to ask as you flip through the pages.

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Malcolm Turnbull

Outrage over politicians manipulating the media to their advantage is as moronic as outrage over fish swimming, so props for another prime propaganda gambit to Malcolm Turnbull.

Today’s Daily Telegraph exclusive is an uncritical rendering of Turnbull’s summary of a document no one’s seen, apart from calling it an “extraordinary” claim and adding two sentences of he-said she-said at the end. Thus the narrative for reporting the Coalition’s NBN policy is framed before the conversation even begins. Again. Hats off.

Turnbull has repeatedly complained about the broadband debate’s quasi-religious nature, though I contend that’s a bit pot-kettle. He’s also resisted publishing even rough cost estimates. “If I put out a set of financials, I want them to be right,” Turnbull said in February, while in the same conversation very carefully saying it was “BT’s experience… that the FTTN approach costs about a quarter of the cost of fibre-to-the-premises and around a quarter to a third of the time”. Clever, that.

Some time this week, the rest of us will get to see “the 12-page costing” that’ll be released as part of the Coalition’s broadband policy. Has Turnbull done the honest thing, and updated all of NBN Co’s estimates with new data based on experience and appropriate risk calculations? Or has he picked every worst-case figure he can find and screeched “cost blowout”?

That is, are mathematics and logic being deployed honestly? Or merely, as Stephen Colbert might put it, to create an impression of maths-iness?

Here’s a few questions to ask as you flip through those dozen pages:

  • What is the basis for the claim that the per-household rollout cost is 40% higher than forecast?
  • Of “the current 50% delay to the schedule” — let’s gloss over the fact that even if the delay is unchanged it won’t be 50% of the total time once we get to the end — what proportion is fixed and done, like the delay in negotiating with Telstra, and what proportion is part of the rollout itself?
  • Do these claims take into account any projected drop in the per-household cost or gain in time taken as contractors overcome initial unfamiliarity with the job?
  • Is there any evidence yet that contractors are achieving these gains, or failing to do so, and if so by how much?
  • “The Coalition’s estimates of the real capital costs suggested they would be more likely to reach $71 billion, not the $37.4 billion claimed by NBN Co’s most recent estimates,” The Tele writes. What is the likelihood of each of these and other potential outcomes, and how was that risk calculated?
  • Is this analysis based on the correct total number of premises, including business premises, or mistakenly using only “households”? (Don’t laugh. The Economist Intelligence Unit got this number wrong by six million.)

And on broadband policy more generally:

  • In February’s “Our Plan: Real Solutions for all Australians“, the Coalition promises to deliver “high speed broadband” and “super-fast broadband”. What are the definitions of those terms?
  • The Coalition promises to “upgrade broadband to all areas where services are now unavailable or sub-standard”. What is the minimum standard that must be met, and how might that standard change over the next decade?
  • “We will roll it out faster to high priority areas,” the Coalition writes. What factors determine whether an area is high priority?
  • Labor’s NBN policy promises to deliver entry-level NBN capability at the same price regardless of location — essentially a social equity and regional development goal. Does the Coalition policy also support that goal?
  • If specific technologies are mentioned, is there clear differentiation between technologies that are available off-the-shelf today and those that are only being trialled or even still just experimental?
  • If specific data transmission speeds are mentioned, is it clearly indicated whether these are theoretical maximum speeds or those likely to be obtained in real life?
  • Different broadband technologies have different capabilities in terms of upload speeds relative to download speeds, which in turn affect the ability for individuals and businesses to be creators and participants in the digital economy and culture, rather than merely passive consumers. How does the Coalition policy discuss and reflect this issue?

These questions should equally be put to Labor, of course.

Delays and cost variations seem inevitable with big projects. The Tele calling the NBN’s 4% capex increase a “blowout” is just tabloid-screech. It’s a tiny figure for an unprecedented civil project. Yet there’s a point where reasons become excuses, and if we reach that point then NBN Co and its political masters will try to smother the problems with rhetoric.

Are we at that point? “Potentially cost an extra $45 billion” sounds a bit like pick-and-screech to me but, as my maths teacher used to say, let’s see the working-out.

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