Committee slams NBN strategic review; Coalition slams committee

Duelling NBN reports full of sound and fury (signifying nothing)

An interim report of the Senate Select Committee on the National Broadband Network issued yesterday has expressed "significant concerns with the accuracy and reliability" of the strategic review process that led to NBN Co adopting the multi-technology mix model for the network favoured by the Coalition.

"The Committee considers that the assumptions and conclusions set out in the Strategic Review are unreliable in the case of all examined scenarios," the interim report states.

It claims "financial manipulations and other irregularities" found their way into the strategic review conducted by NBN Co late last year, including the exclusion of $4 billion in incremental architecture savings, assumptions regarding the delay in the revised deployment schedule, overly pessimistic revenue assumptions and the factoring in of higher unit costs for the fibre build that add $14.4 billion in capital expenditure.

In what will come as a surprise to absolutely no-one, the Senate committee rejected the new NBN rollout strategy and the multi-technology mix underpinning it; the rollout of fibre-to-the-premises in some suburbs and fibre-to-the-node in others is "an inappropriate use of taxpayers' money".

So-called 'fibre on demand' — the option to have fibre extended to the doorstep for an additional fee in FTTN areas — will "create competitive disadvantages for individuals and small businesses outside the fibre footprint, and will entrench broadband inequality in Australia".

The interim report recommends that NBN Co submit a revised strategic review that covers only two scenarios: An optimised FTTP rollout and a revised multi-technology mix rollout based on "actual costs for FTTN and HFC derived from discussions with Telstra, Optus and vendors."

"This scenario should also include all costs to undertake the flagged upgrades to 100 Mbps by 2023, 250 Mbps by 2028 and 1000 Mbps by 2030," the report adds.

NBN Co should continue to rollout FTTP in the meantime and "proceed free from political interference". The other recommendations included investigating the production of the original strategic review, ongoing parliamentary oversight of the rollout and improved transparency and accountability for NBN Co.

In what will also come as a surprise to absolutely no-one, the Coalition senators issued a dissenting report that found the majority's report to be "grossly misleading and untruthful in its portrayal of the evidence provided" to the committee.

"Coalition Senators additionally find that the process of preparing this interim report of the Senate Select Committee, including the provision of a deliberately falsified version of the majority report to the Coalition, to constitute an abuse of process," the dissenting report states.

"[T]he Committee has degenerated into a highly politicised and at times farcical face-saving exercise where [former communications minister] Senator [Stephen] Conroy, has sought to distort the history of the NBN and deny or disguise his direct personal culpability for massive economic damage to a crucial input industry and the destruction of taxpayers’ money on an unprecedented scale."

The Coalition senators accused Conroy of "bullying and hectoring" witnesses who appeared before the committee and included a list of other incidents of "poor conduct or conduct unbecoming of the Committee".

"The majority interim report seeks to discredit the various independent analyses of the NBN undertaken since the September 2013 election," the dissenting report states.

"Instead it asks the public to believe that the NBN was on track and just around the corner – after six years where Labor’s walk never once matched its talk. The plausibility of this narrative is a matter for the Australian public to judge for themselves."

"I think that the Senate lost an opportunity to actually provide some real guidance on exactly what the options are at this point," said Mark Gregory, senior lecturer at RMIT University's School of Electrical and Computer Engineering and a frequent NBN commentator.

"Apart from influencing the media and public drawing attention to the questionable assumptions in the Strategic Review the report doesn’t have any real teeth; the current Government should respond, but they may not," said Chris Coughlan, an independent telecommunications industry analyst.

Labor hasn't taken the opportunity to address some of the mistakes it made while in government, Gregory added. Telstra's structural reform has proceeded too slowly and the telecommunications industry remains without a long-term plan.

"We've seen that there are problems with the [NBN] legislation — the loophole that TPG's now exploiting — so there are issues around there, and then of course issues within the NBN. We've seen quite a few of those: Problems with the contracting of the construction, problems with how NBN Co's been set up. That hasn't really been addressed."

"They've had a huge number of submissions, they've had a huge number of very learned people come and talk to the Senate, and I don't see any of that reflected in the report as such," Gregory added.

"There's an awful lot of platitudes and awful lot of statements of what the politicians would like to see, rather than listening to all the people that came and talked to them at the inquiry."

"In my view, the major failing of the strategic review, and something not drawn out in the interim report, is the assumption that access to the Telstra access copper and HFC will be at a cost no greater that the existing $11 billion committed to in the Telstra NBN Co definitive agreements," said independent telecommunications industry analyst Chris Coughlan.

"The current agreements compel Telstra to disconnect the copper network and broadband from the HFC network, ownership of these assets still rests with Telstra. The strategic review shows that NBN Co will save $23 billion, the difference in peak funding between Scenario 2 (Radically Redesigned FTTP) and Scenario 6 (Optimised Multi-Technology Mix).

"This has now been made public, before negotiating access to the assets necessary to deliver the $23 billion in peak funding savings. I.e. it incrementally values Telstra’s assets at up to an additional $23 billion.

"I’d imagine that Telstra’s institutional shareholders and Board would be wanting a slice of the $23B. From this perspective making the Strategic Review public met the political agenda of the Government but has made a rod for the back of NBN Co in trying to negotiate access to Telstra's assets.

"The interim Senate committee report questions the numbers and a more realistic view may have the differences in Scenario 2 and 6 much closer. This no doubt would assist NBN Co gain access to the Telstra assets, but would that put a question mark on changing track and adopting Scenario 6.

"I might be incorrect and Telstra will hand over the assets quickly for a low dollar value. If this is the case, then Telstra will probably not take on any additional reparation burden of making good the assets and they will be made available, 'as is'.

"From the interim Senate report the condition of the copper asset has been questioned, and this is reasonable. With an asset about to be replaced with NBN Co fibre it would be prudent to limit the expenditure to short-to-medium term 'patch' repairs rather than longer term replacement repairs to the copper. Access to the HFC will be more difficult; Telstra still has the Foxtel distribution over this asset."

Tags Networkingnational broadband networknbn coNational Broadband Network (NBN)

More about FoxtelOptusRMITTechnologyTelstra CorporationTPG Telecom

8 Comments

Kevin Cobley

1

The Coalition doesn't seem to understand what a lie is, We had Mr Flawedband and "I'm no tech head Kerry" PROMISING to COMPLETE THE NBN, but it's not completion at all it's the building of an entirely different project.
The NBN is by definition a Fibre to the Home System to be built to 93% of Australian homes, that's what it is defined as in the act and it's what the people understand the NBN to be.
They sold themselves in the election as being the party to complete the NBN sooner and cheaper (and at less cost), the people were led to believe that the coalition actually intended to complete the project with a few minor tweaks, people in the Non Tech community did not understand what the coalition's program actually was.
In Tasmania actual explicit promises were made to build fibre to the home and Mr Flawedband walked away from an explicit promise and attempted to rewrite his words prior to the election some time after the election, after this occurred nobody was in any doubt the deception foisted on the public in regard to the NBN.
It's also now quite clear that that they have walked away from their promise to provide broadband to the bulk of the Australian population at a base speed of 25Mbs, with node "Trials" postponed till late 2015, giving them around 9 months to install their system to the bulk of the population, clearly impossible.
It's now descended into a farcical bunch of thought bubbles of "multi technology" solutions, to cover Mr Flawedband's attempts to end the NBN program as soon as possible and walk away from fixing the poor quality broadband mess that is Australia.
Mr Flawedband said before the elections that he had the "solutions" to the Broadband problems facing Australia and it was in his "Brochure" it's clear that he "NO solutions" and has parcelled off to his review committees to actually find solutions.
Now it's the HCF or "coax to the node" solution he's proposing, he doesn't actually own, has not announced any plans to buy (is it going to be a resumption if the Telco's won't sell or hold out for too high a price to wedge Mr Flawedband) any of these resources, it's clear it could take 12 months or longer to negotiate a solution with the Telco's and that may not occur. The time required to reconfigure the HFC system is going to be too short to achieve any success until well after the next election.
Mr Flawedband's pre election spiels have turned into the post election reality of "expensive incoherent and very slow if at all Notional Fraudband Network"
It's about time the senate held the new government to account whilst they can, in a few months it's possible the coalition may control the senate. Hopefully Mr Palmer and the other new senators take up the broadband issue.

Rex

2

Let's keep the HFC out of the broadband discussion. I have this service and it's very poor and being a shared media solution will only get worse with additional customers. It's a pity the government can't just get on with the fibre build unencumbered by the compromises the previous government had to make to get the project up, ie. large capital outflows upfront with little revenue income. Put it in where the most customers are and start the revenue stream. Cut the politics and get on with it. Whoever delivers the vision, and it was a strategic nation building vision, will get the credit.

Gordon Drennan

3

Both sides of politics are just wasting our money. One side comes up with a set of assumptions that gives it the numbers it wants to justify what it wants to do. The other side gets into power and says those numbers are wrong and comes up with a different set of assumptions that produce the numbers they want. Then they both start shouting "you're a liar" to the other side. And we say "yes you are, both of you".

demarkus

4

its a shame that so many of the players: politicos, public, telstra dont know what they are talking about. i'm in IT, and i dont even know...

how i look at it is this: fibre to the home may well be a huge game changer or a waste of money. but it seems like a good bet: 50/50 chance spending x billion will result in a 10 times x billion result. or its just a waste of x billion. as the govt often wastes billions and billions, then why not?

fibre to the node, or coax to the node, or some fixed wireless just gives us adsl2 speeds, which half of us can get anyway, and the other half could get if telsta spend like $3 on some better dslams.

edmund

5

Don't know why they don't just let the Public IT Community work out the best way to do it. FFS, I've seen better plans in 5 min write ups on whirlpool then this bunch of dossbags.

alex

6

As someone who works for an isp and deals with line faults on a regular basis, the infrastructure needs to be replaced.

The main argument is whether we bite the bullet and do it now, or whether there is value in getting every last bit of use out of the existing infrastructure.

From my point of view, our current network is a lot like an old car that is going to break down more frequently, and cost more to fix as time goes on and we have reached that point.

Dane

7

Let the people decide on what technology they want to install in their community. Little by little people will realize the advantage of having faster internet speed. I think Labor gov't before foresee this situation that's why they choose the FTTH technology.

Alex is right, you need a technology that is a low maintenance or no maintenance for how many years.

assman

8

the nbn is rubbish.get off ya bootys and build a better internet im getting 17mpbs when I live 100mtrs from the exchange..i should be getting 50mbps..this country is a joke and is ajoke to the rest of the world..golden dawn forever

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