The NBN questions that need answers

The NBN debate needs calm thinking not divisive political point scoring. What we have instead is a mess, a politicised argument of ideologies that will ultimately lead to a poor decision.

The choice of what Customer Access Network (CAN) technology we utilise requires calm thinking not divisive political point scoring. The main considerations here should be technical, commercial and economic. These are dry, rational discussions that should not be based on opinion but hard facts and numbers. These elements are completely agnostic and work no matter what network or connection they arrive over.

What we have instead is a mess, a politicised NBN argument of ideologies that in no shape or form constitutes a debate. But is it too late to change this trend?

The politicisation of the NBN only brings heat not light. Moreover, it doesn't help the electorate decide on facts but forces them to take sides. This can only lead to a poor result, failed expectations and years of recriminations.

What’s surprising is the level of divisiveness on display. The switch-off of analogue TV, the introduction of unleaded Petrol and the change to Metric System, where all important issues but didn’t come close to generating this level of acrimony.

So what's so special about replacing our communications infrastructure?

The Labor government has allowed a bad situation to become worse by not addressing this sideshow. What’s needed is hard data, real facts and an independent, expert analysis of the strengths, weaknesses and sound financial modelling of both projects.

Shadow communications minister Malcolm Turnbull's policy modelling included stress-testing of the NBN Co plan. While some of the figures chosen may be unsupportable and selected only because they produce a bad result, the approach & attempt is one of the best policy reactions by any Opposition I've seen in 40 years.

That's an important point: Turnbull must be lauded for adopting a thoughtful and credible response to the NBN roll-out. Project stress-testing is absolutely the right approach.

Communications minister Stephen Conroy has the money and commercial-in-confidence data available to create an authoritative analysis of both policies. Useful models don't have to be finely detailed, only with a 5-10 per cent margin for error.

An informed and capable team should be able to prepare a useful report in three to four weeks, provided they are given access to the required data & estimates.

Once in place, the panel of experts should look to rerun the four stress-tests postulated by Turnbull with credible data and probability estimates for each scenario.

The same, or appropriate, stress-tests should also be run for a VDSL/FTTN network. The analysis should include a detailed Capex and Opex breakdown until 2040, matching the NBN Co Corporate Plan.

The experts can also examine the impact on revenue of the FTTN "single access rate charge", cherry-picking and "ACCC mandated highest wholesale charge".

Both the full Fibre and the 70 per cent Fibre to the Node (FTTN) model should be tested under the current NBN Co plan, download volume growth, and additional forecasts based on the ABS's forecast of 50 per cent per annum and the CISCO VNI forecast of compound annual growth rate of 66 per cent growth. 

Consumer out-of-pocket expenses needed for first "NBN Connection" point also need to be considered. This examination should include line testing and remediation costs, if any, needed for VDSL. VDSL telephony needs a central splitter and standard 2*UNI-V, 4*UNI-D NTDs (network termination devices) are not mentioned in the Coalition’s plan, while they maintain "in-premises costs are not included". This needs clarification.

Finally, the panel needs to consider the break-even period built into the Coalition’s 70 per cent FTTN model and the conditions that might lead to the Copper CAN to be shut down, such as excessive optional take-up of full Fibre, before this break-even period.

These are just some of the elements that can be analysed by an expert panel and experts in this field will undoubtedly come up with other, better tests and modelling. This would be far more worthwhile endeavour than the unedifying displays witnessed in Canberra. 

This is an edited version of blog post originally published on May 31. Steve Jenkin has spent 40 years in ICT in wide variety roles including large and small software projects, 7 years writing real-time Exchange software in a Telco and Admin, Software and Database work on PC's Unix/Open Source software and mainframes.

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