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Friday, 22 July 2011 09:57

Turnbull reveals Coalition broadband policy via Q&A

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Whether they were intended to be such or not, shadow communications minister Malcolm Turnbull's pronouncements this week on the future of the NBN under a Coalition Government have been seized on and reported and analysed as being a major announcement of Coalition policy. If that was the intent, the way in which they were delivered was somewhat curious.

Turnbull's statements were made at a lunch in Sydney hosted by the Committee for the Economic Development of Australia (CEDA). They were made not in a formal speech but in a Q&A session, and many of them delivered off-the-cuff in response to questions from the floor.

It is not even clear just how much the 'announcements' were pre-planned. Turnbull said early in the interview. "I'm happy to talk about the NBN. I think we are supposed to be talking about the NBN, but I am happy to talk about other things."

For those not present the only way to access these 'policy statements' is to read reports and commentary or listen to a podcast of the 45 minute session on Turnbull's web site. Why do it this way? I suspect to float these ideas in front of the public before they become embedded in an official broadband policy so that they can be revised and refined as needed.

Trouble is, doing it this way leaves the 'policy statements' open to more misinterpretation than usual. Take Turnbull's comments on a cost-benefit analysis study of the NBN by the Productivity Commission, for example. The Coalition has in the past been very vocal in demanding such from the Productivity Commission. However the analysis that Turnbull promised this week was not what the Coalition and others have called for and which has been dismissed by others as being impossible. They have pointed out that no such study has been conducted anywhere in the world.

The earlier argument was that the Government should not embark on the massively expensive NBN without some estimate of the economic benefits flowing from the ubiquitous access to high speed broadband it promises to deliver.

CONTINUED

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What Turnbull promised this week was to get the Productivity Commission to investigate the most cost effective means of delivering high speed broadband to different areas of Australia, based on the particular characteristics and existing networks in the those areas. That is an entirely different project, and much easier to undertake. However he linked it the earlier proposed study by calling it a cost benefit analysis, and it has been reported in that context.

Turnbull said: "The first thing we will do is to get that cost benefit analysis done and we will ask the Productivity Commission to do it and to ask these questions: 'What is the fastest and most cost-effective way to ensure that all Australians have access to very fast broadband?' We will be able to say to people in the outer suburbs of big cities and in regional Australia we will get you very fast broadband more quickly than the NBN will deliver."

A nice vote-winning carrot, for sure, But conspicuous by its near absence from his conversation was wireless. Particularly today's cellular networks. Turnbull railed against the 'insanity' of the Government's NBN policy that prohibits facilities-based competition. He suggested that urban residents who are presently denied access to decent ADSL2+ services either as a result of distance, pair gain or RIM systems might have to wait a decade for NBN-delivered improvements and promised speedier relief via FTTN under a Coalition Government.

No mention that today they could get reasonable speeds via wireless broadband, albeit at rather higher prices than ADSL. Turnbull talked about a taxpayer-funded subsidy to deliver broadband to rural areas, rather than the uniform wholesale pricing of NBN Co. He could equally have suggested subsidising wireless broadband for disadvantaged urban customers until such time as they can get the NBN, or whatever alternative the Coalition proposes.

Nor did wireless feature in Turnbull's claim that Government policy prohibiting facilities-based competition is "nuts". It is clear with the falling price of wireless broadband and the increasing popularity of smart, large screen mobile devices that mobility will become increasingly important. Absent the need for very high speeds - another argument that Turnbull has used against the NBN - and depending on price, consumers may well opt for wireless over NBN. It does not need to many of them to do so make the NBN a loss-making proposition.

CONTINUED

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I Of course wireless networks are only fibre to the node networks by another name - Optus already boasts that 80 percent of its metro base stations are backhauled by fibre, and the percentage for Optus would be even higher. As traffic demands increase more and more fibre connected base stations will be needed. NBN Co has made it clear that it intends to provide services for wireless backhaul, but so far as I know there is no obligation on wireless operators to use it: so there we have facilities competition already.

Turnbull likened the Government's policy of shielding the NBN from facilities-based competition as akin to having the same motivation as "State governments had in the 1950s when they imposed all sorts of arcane restrictions on trucking companies to prevent them competing with state-owned railways."

I cannot help but point out that a far-sighted policy of investing in the rail network and protecting it from competition from road transport competition could have given Australia a widespread, uniform, high capacity, safer, more efficient and lower-greenhouse gas emitting network for the transport of both goods and people. I have no doubt that in retrospect such a move would have been applauded as visionary.

The Government's vision for the NBN is very similar. It is far sighted and based on the belief that a homogeneous, near ubiquitous high speed fixed broadband network will be needed in the future. The Coalition alternative may bring higher speeds faster to some Australians, it will certainly cost much less in the short term but will produce a hotch potch of different technologies, operated by different carriers that could cost Australia dearly in the future.

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