The Coalition's NBN learning curve

The Coalition's NBN could benefit from industry consultation, especially when it comes to the issues of using existing infrastructure, opening greenfields to competition and extending the rollout deadline.

It was good to see that both the opposition leader and the shadow treasurer have put their collective weight behind Malcolm Turnbull’s NBN plans. This confirms the Coalition's desire to back the rollout of the NBN, albeit with some obvious changes, should it  win the next election.

In previous analyses I have provided high-level parameters for the rollout of the NBN, and these now seem to have bipartisan support. Key points of agreement include:

  • The NBN is important for the digital economy of this country as a key enabler of productivity.
  • Fast, ubiquitous broadband is a ‘must’, not a ‘would like to have’.
  • Over time FttH could, and should, be the end result and any technological path chosen should enable this result.

The contentious issues, therefore, relate more to the detail and to the best way to get us where we want to go. The key promise of the Coalition revolves around its pledge that its version of the NBN can be deployed cheaper and faster. While it will be interesting to see the details of that promise here are certain areas that could be addressed here:

  • Use good existing infrastructure (HFC and ADSL2 ) as long as possible and concentrate the rollout of the NBN in those areas where it is most needed, still linked to further FttH upgrades when the need for such infrastructure becomes more urgent.
  • Extend the rollout of the NBN over a longer period of time – for example, 15 years, based on when the old infrastructure will no longer be able to deliver the required quality of services.
  • Open up the greenfield market to competition.
  • Bring fibre to MDUs but use the existing infrastructure to connect the individual units.

I would also suggest that the Coalition should invite the industry to comment on some of these issues to establish if they in fact could save money and speed up the rollout.

Until now the industry has been sitting on the fence in order to avoid becoming embroiled in the political disputes, but the existence of bipartisan support now makes it possible to move away from the political rhetoric and start investigating what is doable and what is not, from a technical and practical perspective.

Unfortunately, politicians and the media seem to be obsessed with more trivial questions such as if a 10 year rollout plan is slipping a month or two. While we are not saying that this shouldn’t be watched, far more important fundamental policy issues that need to be discussed – as we see them - include:

  • Should the NBN be treated as national utility infrastructure or as a money-making commercial operation?
  • What needs to be done to prevent NBN Co from becoming another entrenched and inflexible monopoly, albeit based on a less threatening, structurally-separated wholesale operation?
  • Is there sufficient incentive for NBN Co to keep up with market developments? The current speed entry level is fine for now, but what security is there that the price entry level will be maintained while at the same time speeds will increase to reflect the market need, especially in relation to applications such as tele-health and tele-education?
  • Are the current POI (point-of-interconnect) arrangements sufficient to ensure competition on top of the network, or will this market be dominated by 2 or 3 players? And if that is the case what is the ACCC going to do about that?
  • Could certain elements of the NBN be privatised earlier – eg, the satellite operation?
  • Should NBN Co become more involved in supporting digital productivity and social and economic developments such as e-health, e-education, smart grids, etc?

So far what is missing from the Coalition is its view regarding the developments within the digital economy and the productivity gains that infrastructure such as the NBN, together with other ICT developments in services and applications (healthcare, education, smart grids, M2M, big data), can deliver. It is essential for these two issues to be linked – we need to develop both the infrastructure and the applications.

It would be good if from now on we could discuss these issues frankly and openly within the broader community and with all parties involved – without the political sting attached – like the debates we had in the run-up to the NBN between 2006 and 2009. Key would be for the Coalition to invite the industry into the debate to help them develop the right policies

Equally important ….. this is also an opportune moment for the government to review its NBN policies and identify where they can be fine-tuned. As we have said from the outset, it is essential that the government shows the flexibility and openness to make changes along the road. We are all on a learning curve, and there is no shame in making adjustments where necessary, based on lessons learned here and elsewhere and developments that are taking place in the market and in the technology.

Paul Budde is the managing director of BuddeComm, an independent telecommunications research and consultancy company, which includes 45 national and international researchers in 15 countries. 

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles