It’s clear there will be an ongoing leaking campaign from within NBN in the lead-up to the election, with someone inside the company determined to expose issues with the project PM Malcolm Turnbull commanded for two out of the last three years.
Leaks benefited Turnbull in opposition. As he mounted his attack on NBN for being delayed, expensive and beset with problems, leak after leak showed the company struggling with construction contractors to get premises passed in the time and at the cost required for the project.
Now the tables have turned.
A series of strategic leaks to newspapers — that also conveniently end up being republished in Labor press releases — over the past few months have been aimed at showing how poorly the NBN technology choices favoured by Turnbull in his 2013 election policy are actually working out for the company. Firstly there was a leak showing NBN was concerned that the Optus cable network was not up to scratch; then there was a leak claiming the cost for copper network remediation was about 10 times what was forecast ($66 million v $641 million); and, most recently, there was news that fibre-to-the-node (the Coalition’s model) was suffering delays in the design process, and the cost of fibre-to-the-premises (Labor’s model) is coming down.
They are all presentation documents with no context from the authors, but they are incredibly damaging to the government. They are showing that the government’s reliance on the quick “strategic review” NBN undertook shortly after the 2013 election to justify the change in policy was completely erroneous, full of incorrect assumptions and estimations. That document, from which NBN and the government now disassociate themselves, led to NBN spending much of the first two years of the Abbott-Turnbull government switching from the fibre-to-the-premises rollout to the multi-technology mix, at high cost.
In 2013, Turnbull promised everyone would have at least 25 megabits-per-second speeds by the end of 2016 for $29.5 billion. It turns out fewer premises will be connected to the NBN, and it has ended up costing up to $56 billion (although the government is only investing $29.5 billion). Despite promising, before the election, that he had undertaken significant research into the project in the development of the Coalition’s alternative policy, when he got into government, Turnbull discovered it was not that simple. Telstra and its army of lawyers were not that easy to negotiate with over changing the original $11 billion deal (the Coalition wanted to buy Telstra’s copper network instead of shutting it down, per Labor’s plan), as well as buying the cable network out to build into the NBN.
Rolling out fibre-to-the-node is not as simple as buying the copper network and a whole bunch more network gear. Just as Labor struggled to get the construction component right, the Coalition is now learning that construction, when you have to factor in legacy technology, and include difficult negotiations with power companies, is just not that simple.
The most recent leak shows that NBN is continuing to test options for rolling out fibre-to-the-premises.
It is hardly surprising NBN is still looking at fibre-to-the-premises. Not only is it something NBN will continue to roll out — although much, much less than under Labor — it is often forgotten that NBN is not locked into rolling out fibre-to-the-node and cable. As per instructions from Turnbull and Finance Minister Mathias Cormann, if fibre-to-the-premises is more cost-efficient, NBN has the option to use that.
So the question becomes, if the leaks are showing costs for fibre coming down while costs for cable and fibre-to-the-node are going up, why isn’t NBN using the superior, cheaper option?
The answer, like the project, is complex. The documents likely don’t paint the whole picture of what is happening inside NBN, and, as Turnbull has often said, you can’t take a one-size-fits-all approach to the NBN. In a statement, the company said the current cost per premises to build is $4419 versus $2300 for fibre-to-the-node, and the former still takes more time to build.
In 2016, much like in 2013, the NBN is not an election-deciding issue. Although a vitally important project, it just doesn’t shift that many votes — but the government should be held accountable for what was promised in 2013. We were promised a national broadband network that was quicker and more affordable. It has turned out to be slower and more expensive.
Two years on, NBN isn’t anywhere near where most Australians would have expected it to be under either government. Unfortunately, we can’t peer into a parallel universe to see exactly how many premises would be connected under “Prime Minister” Kevin Rudd and “Communications Minister” Anthony Albanese. The track record before the election wasn’t great, but those who used to work on the project before the change in government, like former NBN CEO Mike Quigley, claim that the costs were coming down, and the company was preparing to scale up construction. The NBN remains an information war, where both sides have self-interest at heart.
Turnbull’s problem is that over two years into government, most of what he has to show for the NBN is the legacy of Labor’s policy. Most of the premises connected today are using the technology choices planned under Labor. NBN is meeting the broad targets it has set, but fibre-to-the-node and cable connections are nowhere near where the government would have wanted in 2013. He can campaign on passing many more premises than the Labor government ever did, but he can’t campaign on his preferred model of the NBN.
Labor will no doubt continue to make use of the future leaks, if NBN is unable to determine and stop the source. Despite Labor’s communications spokesman Jason Clare saying last week that Labor had the policies ready for an election, the party still hasn’t announced what its alternative NBN policy would entail, outside of stating it would involve “more fibre”. No doubt Clare is aware of the dangers of promising too much with too little information from inside NBN on the state of the network, and Labor will not want to repeat the Coalition’s mistake of making massive changes to the project again just to make it cost more and take even longer. Labor will likely aim for minimal disruption in the project, while promising more fibre connections.