Turnbull has more NBN twists for Telstra

Who won yesterday’s #NBNdebate between Malcolm Turnbull and me? I’ll let others decide, but I suspect I lost handsomely. The Shadow Minister for Communications and Broadband is a much better debater than your correspondent, and my heart wasn’t really in it – as a debate, that is. I was more interested in interviewing him to find stuff out, which is more my thing.
 
What did we find out? A few things, but not much of course, albeit entertainingly.
 
He thinks fibre to the premises (FTTP) would be preferable to the fibre to the node (FTTN) network that he is energetically proposing; it’s just that he prefers the lower cost option.
 
He acknowledged that the Coalition’s broadband policy is really for a minimum national download speed (25 megabits per second) rather than a specific technology (FTTN). Where necessary it will be all fibre; otherwise fibre and copper. I didn’t say, but should have have, that businesses are as interested in upload speeds as download.
 
He will complete a cost benefit analysis and review of the NBN within 60 days of taking office, and while that is happening, work will stop. Non-financial benefits will be taken into account, but there are doubts that they will be enough.
 
I think he conceded that this review and cost benefit might result in the current FTTP plan being viable if non-financial benefits are taken into account, which he said would be a “great result”. He just doesn’t think that will happen because the cost of the NBN is $94 billion – about $50 billion more than estimated so far, and $60 billion more than his FTTN network, too much for productivity gains to make up. (I described this as rubbish.)
 
I suggested to him that by asserting, without a cost benefit analysis, that the current NBN is unviable, he is guilty of the same sin of which he is accusing the government, except in reverse. They say FTTP is good, he says it’s bad – but both without a proper analysis. He disagreed, but a little shakily.
 
He said that in order to preserve the plan to structurally separate Telstra, while at the same time allowing Telstra to operate its hybrid fibre-coaxial network in competition, he would probably have to insist that it be demerged as a separate business: “our assumption is that we will”, were his words.
 
But perhaps the most the interesting question – and answer – came from Citi’s telecoms analyst Justin Diddams, who asked whether it might be better if Telstra would build the NBN rather than the government – suitability subsidised by the government.
 
That’s what’s happening in the UK and New Zealand, he observed, where Telecom NZ and British Telecom were demerged (the infrastructure part hived off into a separate company).
 
Turnbull agreed that that would at least mean the government would know what it was up for, and that that would be the best way all round to deliver an NBN, but added that it’s probably too late to do that.
 
Afterwards, while Malcolm, Justin and I were chatting, a senior Telstra executive came up to us and said: “Oh, so the NBN is too risky for the government so you’ll just offload the risk onto us!”
 
So negotiations have begun.