Shadow Communications Minister, Malcolm Turnbull, speaks with ARN about what the Coalition would do with the NBN if it took power and how he’ll attack the issue in 2011. David Ramli (DR): You had successful year last year compared to your predecessor’s in terms of fighting the NBN in the mainstream media. But I’ve spoken to a few analysts who say the Government’s taken back some of the momentum and that it’s getting its message across to people.
Malcolm Turnbull (MT): I don’t think the Government’s getting any message across at all on the NBN. I actually think there’s growing scepticism about it and I think as it is rolled out assuming it is rolled out that the scepticism will grow. When they start overbuilding areas where they already have fast broadband people will not be able to tell the difference and they’ll be sceptical about it.
Because the world is increasingly heading towards wireless Internet access, there is an enormous amount of work that is going to go into better compression technology because you’re not going to have the whole world fibred to the home.
DR: But isn’t it a little dangerous to rely on future developments that haven’t taken place?
MT:You’re missing my point, with respect. What I’m saying is that we’re better off identifying the deficiencies we have at the moment and addressing them in the most cost-effective way.
They’re saying that having fibre to the home future proofs us; that having spent that money we don’t have to spend any more. But the truth is what people are increasingly seeking is the convenience and functionality of mobility.
We will end up spending $50 billion or whatever it is in expenditure on the NBN and there will still be billions or tens of billions of dollars to be spent on wireless networks because that’s where the demand is going to come from.
DR: Some estimates claim the NBN will be 12-13 per cent complete by the time the next election comes around. At what percentage does the NBN become impossible to stop?
MT: You would have to assess it at the time. The thing I don’t know is what areas they’re going to do first. It really is going to be a matter of identifying the facts on or in the ground at the time. And the other thing is we don’t believe the Government should own this company.
(If we win) we would seek to ensure the separated customer access network company is separately owned and that it becomes the provider of fibre that last mile infrastructure.
We would stop the construction of the NBN, quickly conduct a rigorous cost-benefit analysis, identify those elements in the NBN infrastructure that should be maintained and integrated perhaps into the new separated network company and identify the areas that are deficient in terms of connectivity and prioritise them and make sure they are addressed.
I think in terms of those people who have got poor Internet access now getting better internet access under my approach, they’d get it much more quickly than under the NBN.
DR: Would there ever be a potential situation where the NBN would be continued because it got rolled out too far?
MT: No. If an independent network company believes it can make a return out of rolling out fibre to the home, then fine. I’m not against fibre to the home or any particular technology. The question is should the Government be using taxpayer dollars to subsidise it.
This is the point you can’t sidestep – when you look at the applications people say require that sort of connectivity they are invariably talking about video entertainment or some form of video interactive gaming.
DR: Video surgery?
MT: Yeah, but that is such rubbish. If (brain surgeon) Charlie Teo is giving advice to somebody in the other part of Australia on brain surgery they’re not going to be in a home. They’re going to be in a hospital. Of course you need high bandwidth, high definition and connectivity in a hospital and many businesses. But you’re not going to be doing brain surgery or any kind of surgery on the kitchen table – we hope!
DR: Business leaders in the tech and other industries desperately want to see the Coalition’s alternative (to the NBN).
MT: Well I’ve explained the alternative; I’ll go through it again. And I can only describe the alternatives as they stand today, if there’s a change of Government in two or three years time and the NBN is partly built then we’ll have to take that into account.
The approach I would take is identify those areas that do not have satisfactory broadband now, which is a combination of blackspots in the cities and rural and regional areas, and ensure that all of those areas have access to the Internet at speeds comparable to the best speeds in the city, eg ADSL 2+. I guess it’s about 12Mbps or something of that order.
DR: When can we expect a detailed policy document?
MT: Well it’ll be more detailed closer to the election but the mathematics and financial arithmetic of it is fairly straightforward. There’s going to have to be a subsidy to enable that sort of connectivity to reach regional areas and that was part of our policy in 2007. The technologies will be a combination of fixed wireless and satellite. In the cities there really shouldn’t need to be a Government subsidy. If any it’d be a very small amount of money compared to the NBN. The figure for rectifying the underserved areas subject to pair gains systems and RIMs – old network architecture made when they weren’t thinking about the Internet – will need about $1-2 billion to upgrade.
We support the structural separation of Telstra’s customer access network. Whether it would require any support to do the work in the city is doubtful, I think all they’d need is the security of a pricing regime that would enable them to get a reasonable return on their capital investment.
DR: So do you have a dollar figure you can put on your alternative at this point?
MT: No, no I wouldn’t put a dollar figure on it at the moment but there are some numbers that were set out in the election policy. But the critical point is I don’t want to fall into the same trap that Labor has. My approach is to have the most cost-effective solution.
DR: Do you really think that’s enough detail for businesses to start planning in case you win the next election?
MT: Yes, I think business knows that the approach I’ve described is one that most business people have said they would undertake if they were in our position. It’s the common sense approach. The Government’s approach is really one that is only suitable if money is no object. That’s fine, but it’s fiendishly expensive.
DR: Are you surprised that a right-faction politician like Senator Stephen Conroy would come out with something that’s almost left-wing in its approach?
MT: I don’t think it’s left or right-wing, I just think it’s crazy. It’s extravagant. It’s just so reckless and there’s never been an attempt to stack this up. In any other area of investment be it business or the public sector, generally people identify what the policy objective is and then work out the most cost-effective way of doing it.
DR: Isn’t it hard to do for roads, highways and the like?
MT: Oh heavens no, in highways and railways there is a huge amount of work and complicated software to choose the most cost effective route and if you decide to build a railway from A to B you don’t just draw a straight line between them.
DR: Tony Abbott said you don’t renovate your bathroom when your roof has been blown off in terms of redirecting NBN funds to Queensland’s flood appeal. Is that an approach you’d support?
MT: Well Tony has really said no more than what we’ve all been saying, which is that the NBN is the most expensive way of doing it.
DR: But in terms of the idea that if a major disaster strikes luxury policies like the NBN can go on the back burner, is that something you’d support?
MT: Well they can be, sure. The problem is Conroy is stitching us up with so many contracts with the NBN. As time goes on he makes it harder and harder and more expensive to stop the rollout.
DR: How much of a natural disaster would it take for your multi-billion dollar broadband plan to be stopped and put on the backburner?
MT: I think you’re hypothesising. Governments have got to assess priorities all the time and that’s why the cost-benefit analysis is so important. Governments are constantly assessing priorities and when you’re in Government sitting in cabinet you are constantly weighing a series of good proposals. There are very few really bad ideas that get to cabinet but you’ve got to decide which ones you can afford.
DR: You pushed for a business case and Conroy said no. The independents came in, demanded it and it was delivered. Does that mean they’re doing a good job of holding the Government accountable?
MT: No, not at all. There was always going to be a business case published and the quality is a matter for debate. The thing that is more important is a cost-benefit analysis. The business case looks at the economics of the NBN as a business and makes a number of assumptions that are very optimistic.
But what it doesn’t do is ask what we’re trying to achieve. If what we’re trying to achieve is universal and affordable broadband then the question is how do we get there and that’s never been asked.
The proposition that universal fibre to the home is the answer is one that’s been criticised by many people. President Barack Obama’s State of the Union address has a focus on universal wireless access. That’s a debate, an analysis, a body of work that’s never been done here. (Obama) is not an idiot, the United States is the home of Internet access, they do understand technology.
DR: But they also have a much higher level of existing fibre, HFC and various other networks in place as well.
MT: Yes, they do have a very high degree of HFC because of the history of cable TV, that’s true. And that’s why I’m not suggesting this is a black or white question. But I’m saying that is the analysis that should be done and there are geographies and areas where one technology is superior to another. You don’t need to have one size fits all.
DR: So what’s your plan for 2011? Are you going to be doing things differently this year?
MT: I think there are a lot of issues in the communications area but the NBN remains the big one and we’ll continue to argue there should be a cost-benefit analysis of the project and we will continue to hold the Government to account over it. I think that’s the most important thing.
DR: Do you think the Government can last the whole year?
MT: I think it can, but will it? It’s hard to say. They’ve got a wafer-thin majority so they are by definition subject to one of the independents changing their mind, they’re subject to deaths, resignation, misadventure and all that stuff. They haven’t gotten off to a good start and this flood levy is a very poor policy.
It’s obvious they could easily pay for this by cutting back on other programs.