The NBN is dead, long live the NBN

The NBN is dead, long live the NBN, or should that be MTM (Multi-Technology-Mix). Whatever moniker you choose to attach to the broadband network Australia is destined to get, 2013 is the year when a couple of NBN aspirations and assumptions were finally laid to rest.

The audacity of Labor’s Fibre-to- the Premises (FTTP) NBN has been consigned to history and those bemoaning its demise would be well served to expend their energies in ensuring that the mistakes made in the last four years are not repeated. And the rush to expand the NBN footprint, by any means necessary, doesn’t come at a price.

The first part of that process would be to accept that while Labor’s NBN was the best option to remedy the three decades of negligence in the communications sector, the execution was faulty. Rather than find ways to justify how and why the odds were stacked against Labor and the original NBN Co, it might be prudent to just accept the fact that mistakes were made.

Mistakes, that have allowed a change of government in Canberra to unravel our broadband ambitions.

Rolling fibre to 93 per cent of all Australian premises was always going to be difficult and expensive. However, the process was made even more difficult by the divisive politics that has put the interest of the citizens on the backburner.

Whether it’s the stage-managed release of the NBN strategic review last week or the sight of Senator Stephen Conroy browbeating witnesses at the Senate Committee on the NBN, we have witnessed just about every display of political buffoonery that has left the NBN at the state it is in.

A three year project that’s running two years behind schedule; a start-up with close to 3000 staffers – many of whom now seem destined to get the chop; and a rollout process characterised by missed timetables and ballooning costs.

A virulent addiction to speed without adequate delivery mechanisms in place has so far been a recipe for disaster. Scrapping the NBN isn’t a valid option but we can certainly strive to scrap the petty demagoguery and the weasel words that have characterised the process.

The 'Cult of Turnbull'

The strategic review, which serves as the template on which the Coalition hopes to build its NBN, should be a wakeup call for those who espouse to the ‘Cult of Turnbull’. To consider that the Communications Minister was going to somehow put forward a pro-FTTP approach post-election was patently naïve. Malcolm Turnbull promised a network that was cheaper and delivered sooner than what Labor had in mind, and that’s exactly what he intends to deliver.

Labor’s attachment to FTTP may have been foolhardy, a straitjacket that hindered NBN Co’s operations, but the Coalition’s single-minded pursuit to expand the rollout footprint could prove to be just as limiting. The MTM approach might be a viable interim solution but it introduces substantial complexity to the entire process.

The strategic review raises just as many questions as it answers. While we now have a realistic understanding of the costs involved, although the numbers aren’t really set in stone. The bottom line is that Labor’s NBN still costs a lot more than the Coalition’s version but it’s not just about the billions, it’s about the delivery time.

The sooner a NBN is rolled the sooner NBN Co starts to make a return. It’s the only reason why utilising existing infrastructure and keeping the copper on the ground is the strategic review’s preferred option, especially when the cost between replacing existing copper lines with fibre and the maintenance/upgrade of existing infrastructure, when compared, is very slim. Option A costs $58 billion while Option B costs $57 billion.

It’s a lot of money but Turnbull can do very little about that. The deals with Telstra, Optus and the construction partners are already in place and there’s a good chance, especially in the case of the construction partners where more money may need to be put on the table.

Tens of millions will also flow to the coffers of IBM as the multi-technology approach muddies the water with regards to the Operational Support Systems (OSS) and Business Support Systems (BSS). The OSS is designed to provide a reliable service to wholesale but the MTM triples this effort.  This isn’t an unsurmountable challenge but it will cost more than the $200 million NBN Co agreed to give to IBM in 2011.

At the end of the day, that’s just another cost that NBN Co and the Coalition will just have to swallow.

And it might be all worth it, as long as NBN Co can deliver that enhanced footprint. But it’s going to be an almighty challenge.

Reliability sacrificed

It’s perhaps also worth considering just what will be lost in this process. The Coalition’s NBN may get to premises sooner but, this ‘network of networks’ sacrifices and ubiquity and reliability.

The reliability of the service depends on the state of Telstra’s copper and even with remediation - which costs money and more importantly time - there will those who will have trouble. That’s the trouble with best effort, it gives you a service but it might not be what you expected.

Uploads speeds may not mean a lot in the grand scheme of things for most Australian households, and businesses can always pay to get the fibre delivered to their premise. But there will be winners and losers in this equation.

For many small to medium businesses higher upload speeds could be a transformational channel that allows them unparalleled articulation in the digital world – cloud, software defined networking, and the Internet of Things.

Upload speeds are far more important in this context than download speeds and it has nothing to do with content consumption. 

Whether 25 Mbps or 50 Mbps, once you get past 10 Mbps the effect on download performance  is pretty minimal, unless  there are multiple devices, which is increasingly the case, in play.

The speeds delivered by Coalition’s NBN will serve most households with regards to their download needs but the potential afforded by higher upload speeds will have to stay latent for now.

The economic cost of this sacrifice is impossible to define, but NBN Co really doesn’t have the time to ponder that point. The rationale professed by the strategic review will be brought to life in the New Year and one can only hope that we aren’t stuck with a second-rate but convenient NBN that’s happy to be good enough.

Correction: An earlier version of this story claimed that NBN Co had over 6000 staffers. This is incorrect. NBN Co has around 3000 employees. This error has been corrected in the story.