The Final Nail

Over the past three years we’ve seen some quality acting from the Earl of Wentworth, Malcolm Turnbull. From decrying transparency, to claims that HFC is the future, to demanding a cost-benefit analysis (CBA); Turnbull has been critical of everything National Broadband Network (NBN).

Since the Liberal party won the 2013 election, Turnbull has taken, with gusto, his role as Communications Minister as a signal to do what he wishes with the NBN. Sacking the board and stacking it with ex-Telstra executives, starting no less than 5 reviews/audits/time wasters, deliberately slowing the rollout down, and most of all, blaming Senator Stephen Conroy for every failure since taking over the position.

It should come as no surprise that the man who claimed he would honour all contracts prior to the election but hasn’t would then pull a fast one on the nation.

The Ziggy-Telstra Conundrum

Before I start with the new Statement of Expectations, I thought I’d look at some of the statements Ziggy Switkowski made on The Business recently.

Ziggy, with the smug look he usually has while being interviewed, spewed platitudes straight from the Turnbull Book of Talking Points. Claiming that the Multi-Technology Mix (MTM) is the “preferred way forward” worldwide. Do tell us Ziggy how buying rotten copper is the baseline standard for rollouts worldwide.

I have yet to see a single country go down this path, the reason being is that incumbents are refusing to upgrade their technology until there’s carrier level competition in an area. Does this sound familiar to anyone? Oh, maybe like in the US where as soon as Google announces an upgrade area AT&T or Verizon rush to deploy Fibre to the Premises (FTTP). Not some MTM joke of a rollout, but fibre all the way.

Not only this, “cable” (Pay TV) companies are reconsidering their options when it comes to deployments. With DOCSIS 3.1 still many years off, and Pay TV providers seeing big competition from the likes of Netflix, Hulu, and Amazon Prime, the last thing they want to do is invest in costly upgrades to aging infrastructure.

In New Zealand, Vodafone tried to get their HFC into the mix, but the New Zealand government wasn’t having a bar of it. Why? Well, Communications Minister Amy Adams summed it up nicely stating Vodafone was “obviously pursuing its own commercial interests”, which rings true with the NBN. Ziggy et al are pursuing the commercial interests of their former employer, Telstra.

This leads us to the next revelation: Ziggy Switkowski, in no uncertain terms, has stated that NBN Co would be buying Telstra’s copper network and maintaining the copper on their own back.

Yes, Ziggy has locked NBN Co into buying a (at least) $30b copper network that the technicians and engineers who maintain and design the network have stated is in a highly degraded state.

http://www.smh.com.au/reports/NBNReport.pdf

In any normal business this would be seen as idiotic without the close ties between Telstra, the executives of NBN Co, and the Minister for Communications. With such connections it is definitely a conflict of interest, verging on wholesale corruption. How can anyone justify handing $30 billion or more for a network that’s falling apart?

It’s like spending $5 000 on a Intel Pentium Pro 200Mhz computer because your mate already had one, instead of paying $1000 for an Intel i7 computer. I can make analogies like this all day, and they all ring true.

The key problem with all of Malcolm Turnbull and Ziggy Switkowski’s arguments is they are only relevant for incumbent telcos. NBN Co is NOT an incumbent, Telstra is.

The Bleating Stops

From the moment Senator Conroy ordered NBN Co to start the build Malcolm Turnbull has bleated like a wounded goat about the need for transparency, oversight, and most of all, a cost-benefit analysis (CBA) of the NBN.

Not only that, he was adamant that no changes would be made to the rollout until all his little reviews were finished. In fact, the Vandal of Vaucluse was so incensed by the suggestion by Senator Conroy that there would be no CBA that he was moved to write a blog post on 14/10/13 stating:

But then, with that uncharacteristic exercise in contrition off his chest, he launched into another homework-free, fact-free attack on the Coalition claiming that we had abandoned our commitment to a cost benefit analysis of the NBN project.

Nothing could be further from the truth.

As stated in our Broadband Policy (page 13) released in April 2013, the Coalition will conduct an independent cost benefit analysis of the project and a review of the regulations relating to broadband.

Those are strong words, strong enough to be taken as a guarantee by the Minister that a cost-benefit analysis was vital to the process of changing the NBN.

Before I continue I will state this: I think CBAs are a waste of time and money with such a large infrastructure project. While there should be checks and balances, the overarching theme should be: deliver the best possible service to the most amount of people.

The ramifications for degrading the NBN at this stage will be long lasting, and whether you run a CBA or not, there is no justification for hamstringing future development in the ICT sector.

That said, I am confused by the rampant hypocrisy that Lord Buffering of Wentworth has conducted with regard to the NBN. In the new “Statement of Expectations” (SoE), lovingly addressed to “Ziggy” in what appears to be permanent marker, it’s clear the CBA is meaningless to Turnbull and there was NO intention of even paying attention to what it contains.

No matter how Turnbull spins this, he has broken multiple promises on transparency, funding, speeds, and now process, in the NBN. From the initial statements post-election, there has been nary a sentence uttered from Mal’s lips that doesn’t include a high degree of misinformation, obfuscation, or outright lies.

The SoE clearly spells out the death of the NBN, locking in Hybrid Fibre-Coax (HFC), using data from the highly flawed MyBroadband website (which @YaThinkN neatly debunked), and worst of all capping government funding at $29.5 billion, with the rest coming from “private investment”. I have to question any person investing in a company stupid enough to purchase outdated infrastructure, it would be like Macquarie Telecom investing in VAX/VMS servers for the “next generation datacentre”, just wouldn’t happen.

Ignorance Is Bullshit

It’s clear that even without Mal’s precious reviews, he has tried to sneak this one through, and fortunately for him, most of Australia’s journalists are stuck in a huge circle jerk over Bob Carr’s diaries, MH370′s disappearance (STILL!), or a starlet’s death.

This does not bode well for us; the most important piece of infrastructure Australia has ever seen is suffering a death by one thousand lies, and our fourth estate is sitting on their hands. Either they don’t understand it, don’t care, or are that ignorant they are willing to throw out the baby with the bathwater.

To me, this is gross negligence, there needs to be examination of what’s happening here, and maybe a comparison with what has happened elsewhere. Even the Openreach rollout in the UK is seeing increasingly more FTTP deployed over the planned Fibre to the Cabinet (FTTC, essentially UK term for FTTN). Why? Users need the bandwidth.

For a while there, with ADSL2, we  were essentially “over serviced”. Web sites were small, downloads were small, we could live with this. These days we are vacuuming up data like a turbo powered street sweeper.

ABS data from this week shows clearly that we’re increasing data use at an exponential rate, since 2009 we have seen an 8.7x increase in data use. Over the next 5 years that will be closer to 32x current data use. In the last 3 months we’ve increased our data use by 30%, hinting to a doubling of data use in less than 12 months. This should be a scary prospect for anyone investing in infrastructure, not so with Turnbull who emphatically stated on 18/11/13 that data use growth had slowed:

Today, in contrast, we see that the most recent VNI, which was released in June 2013, forecasts a growth rate for total consumer use of data over the five years from 2012 to 2017 of just 23 per cent.  Rather than data volumes doubling every two years, now they are doubling every four years.

Really, because CISCO’s VNI tool (have a play yourself) clearly shows this is NOT the case as exponential growth is expected. This lines up with ABS’s observations over the past few years:

ABS Graph

With this in mind, investing in technologies that can barely break the 100Mbps mark under perfect conditions is folly, even if 25Mbps is “good enough” for today, within the next 5 years, the lifetime of the MTM rollout, we would need 800Mbps connections. This has not been considered at all by the Strategic Review, in fact, there are no plans to get even close to 800Mbps until, at the earliest, 2030, by then we’ll need much much quicker connections.

www.nbnco.com.aucontentdamnbncodocumentsNBN-Co-Strategic-Review-Report

Don’t forget, data use is not all about download movies and porn, website sizes increase over time too, just ask Malcolm and his 3.2MB website. While the rate of website size increase lags data use increases, as is expected with changes in the ways we communicate, entertain, etc, website sizes are getting up there. Many of the websites I frequent are 5MB+ in size.

Hammer That Nail

I suppose this is the end for the NBN. With hard caps being put on funding and expensive infrastructure to buy, I’m concerned that the white elephant that Malcolm Turnbull banged on about for the past 3 years will come to fruition, not through ambitious plans, but through lies, deceit, and most of all, hypocrisy.

There is no logic or rational explanation for the decisions of Turnbull, and one could look back at his life before becoming Communication’s minister as to how he can live with himself doing this. Remember, lying to voters and screwing them over is ok so long as you and your mates get ahead.

The NBN is dead, and the wholesale destruction of the network will not be easily reversed. With the government being anything from $20 billion to $30 billion in the hole buying outdated twisted pair copper and coaxial cable networks, there’s little chance that sweeping the current government out will “fix” this.

NB: I will be writing another article addressing Turnbull’s ridiculous speech at CommsDay shortly, that needs a whole article of its own.

Also, I managed to fix the comment system. Give it a whirl.

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  • STENDEC87

    Truly a sad day for the telecommunications industry in Australia. Our
    once great nation-building infrastructure project has been reduced to an
    international laughing stock. Turnbull and his ilk have doomed
    Australia to technological obscurity for yet another decade or more. No digital economy. No innovation. No overseas investment. Nothing.

    I’m
    sure that Telstra and Foxtel are just loving this. The former is about
    to be paid $20-30 billion for a network they no longer want (not to
    mention the benefit of having the maintenance and operating costs lifted off their
    back) while the latter is about to get a huge increase in potential
    customers for its cable TV service.

    I envy New Zealand. While
    we’re struggling to reach 50/20mbit in 2020 on our strung-together
    copper and HFC network they’ll be leading the charge with their
    1000/400mbit+ Fibre network.

    The only possible silver
    lining is that 10 years from now when the MTM network has officially
    fallen apart (and likely has been in tatters for the previous 5 years at
    least), the broader public may look back on this government and
    Turnbull in particular and curse them for the mess they’ll have left us
    in.

    • fehowarth

      I can see the cracks becoming great cavities long before the next election.

  • Ian Lake

    Well, the old NBN is now in it’s death throws upon today’s news from Malcolm.

    In place, we will have an expensive patchwork of crapped out infrastructure that will cost a god damn fortune to keep running from year to year.

    My prediction is,

    HFC expanded to all suburbs of capital cities. However, it will not be upgraded anywhere. It will maintain current contention ratios, giving crap upload speeds, and getting congested as can be in the 6-10pm timeslot.

    HFC will continue to run foxtel. In fact, foxtel will require a clause in its contract that permits it to run to any of the new, and optus parts, of the expanded hfc footprint. Yep, the taxpayer is paying Rupert to upgrade his network…

    FTTN will be based on 1 node per DA. Doesn’t matter if your on 1.5km of copper to the DA, you get what you get. No upgrade will occur in the future to any part of the fttn network, once a node per DA replaces each DA pillar. Expect 25-50mpbs generally (which is an ok upgrade), however, don’t expect fibre on demand to be an option, and don’t expect that you will get an upgrade in 2019 to above 50mpbs.

    Australia will now royally be screwed for the next 20 years. No attraction from overseas firms to come here due to the crapped out upload speeds, and the indifferent download speeds. No massive boost to aus GDP, by increased technological uptake of devices built for fttp speeds. No small business revolution. No extra educational opportunities for all our kids growing up. No stay at home telehealth uptake…. The list goes on.

    And finally, no revolution into video telephony on an australia wide scale. That alone would be an incredible change in the way we communicate! Standalone devices, hooked up to tv’s, with a ‘remote’ (that backs up as a phone) controller for video telephony.

    Meanwhile, telstra is laughing it’s arse off. Getting to now sell off the copper network, while collecting a massive chunk of contracts to roll out fttn nodes, and expand the hfc footprint.

    And who gives them this… the ex ceo of telstra, Ziggy.

    All the while, the coalition are appeasing the Murdoch overlord, by effectively destroying any hope of IP TV taking off in australia, due to pathetic saturation of connection speeds fast enough to run it lag free, in a multiple internet user at a time, home environment.

    We have a bunch of corrupt f&*%ing idiots running australia.

  • Ben

    Good article and you touch again on a very strong point – no-one from mainstream media is raising the serious question of corruption/conflict of interest with Turnbull, Ziggy and others in the board. Sure, you can say Murdoch has a hand in this, but even a lot of the left-wing, independents and Aunty don’t seem to be doing more than checking in occasionally!

    But then, with the amount of twists and turns, lies, piss-taking and pure misinformation that’s being thrown about, it’s exceptionally hard for someone not following the NBN closely to get enough information to have a discussion.

    Do you think it’s worth starting to build up an educational timeline with both technical information and a laymans explanation?

    • sortius

      It’s a hard task, I can’t say I was ever given a single resource find all this out, even when working for Telstra. It takes an inquisitive mind to stay across the NBN, something every journalist should have, but they don’t seem to.

      • Ben

        It also takes a lot of time to cross-check different sources, the amount of info just lifted from the so-called findings is ridiculous!

        Well I would support a timeline, if I can help at all just yell.