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Malcolm Turnbull

Published 12:52 PM, 20 Aug 2012 Last update 12:52 PM, 20 Aug 2012

Alan Kohler’s column today “The Coalition’s NBN policy is madness” is pure fantasy.

He says that by the time of the next election the NBN will have “about a million” connected to its fibre to the premises network.

Yet the NBN Co’s own corporate plan, released with great fanfare only a few weeks ago, says that by June 30, 2013 there will be 54,000 premises in total connected to FTTP with only 341,000 premises passed. So even if he confused “connected” with “passed”, he is out by a factor of 3.

So where does the 1 million figure come from? Alan should explain it or publish a correction.

Further, it is far from certain that the 54,000 figure target will be met by June 30 next year – after all as at May 2012 the NBN Co had less than 4,000 premises connected to the FTTP network.

As far as Telstra is concerned a move to FTTN does not require major revisions to the deal with NBN Co (other than securing access to the D side copper) and would advantage Telstra because more customers would be switched over to the NBN network sooner and so the payments to Telstra would be accelerated with a consequent higher NPV. As an example BT in the UK passed 7 million households with its FTTN rollout in just the last year.

His argument about a “two tier internet access regime” fundamentally misunderstands the nature of the internet, the whole point of which is to enables the propagation of signals over a range of networks and channels. The internet is a network of networks – fibre, copper (of many varieties), HFC, wireless, satellite – and it is that interoperability which is one of is greatest strengths. The issue for customers is not the particular medium of communication connecting their device to the internet but rather the quality of the experience. If bandwidth is sufficient for their needs, then whether it is on HFC or VDSL or GPON or wireless or a combination of some or all of them is not particularly relevant if it is relevant at all.

It has to be remembered that the speed of connection is determined by the slowest segment of the network between the customer’s device and the server with which they are connecting which in many cases may not even be in Australia.

And as for saying I should ensure the NBN is delivered “on budget” – if only there was a budget! The NBN Co has no budget. It has a project the scope of which was given them by the government and they regularly provide estimates of what it will cost. There is no budget in the sense of a cap or ceiling on what they can spend. It is exactly like asking a builder to build you a house with no contract other than to pay him what it costs.

Malcolm Turnbull

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