October 9, 2019

NBN focus shifts to business products

TelcoLand

NBN focus shifts to business products

Paul Fletcher: 

The government has no idea how to move the NBN forward if the Communication Minister Paul Fletcher’s speech at the CEDA conference last month is any indication. 

After bashing Labor’s vision for an all fibre network that connected 93 per cent of premises to the NBN – something that most countries around the world are now pursuing – Mr Fletcher relied upon clichés and misleading statements to argue that the government’s failed NBN policy is good for the nation.

So what did Mr Fletcher offer us in his speech at CEDA’s 40th State of the Nation? Not a lot, other than to argue that NBN Co should offer business broadband connectivity products, and how this would improve competition and reduce the cost of broadband. Light bulb moment!

The NBN is being installed into premises across the nation, including business premises, so it is little wonder that NBN Co would make available uniform wholesale broadband products to its retail partners that are tailored for business, just as it does for residential and small business customers.

Mr Fletcher has offered no new initiatives nor any hint of government thinking on telecommunications policy since taking up his position. Possibly now would be a good time for Mr Fletcher to reflect on what the US Federal Communications Commission Chairman Julius Genachowski said in 2011.

“The Internet is creating more jobs than it’s eliminating ... but there are no guarantees about where those new jobs will be created in the global economy. The world is connected. Capital can flow anywhere, and jobs will follow. Let’s not kid ourselves,” Mr Genachowski said.

“I hear this directly from my counterparts overseas: our global competitors want to be centers of broadband innovation and job creation. We’ve got to get our broadband infrastructure right. If we don’t, we’ll still have job losses here, but the new jobs will increasingly be created in other parts of the world.”

Among the world’s 68 leading economies, Australia has slipped to 14th in the Global Digital Competitiveness Ranking 2019. Australia ranked 45th for business agility, three places lower than 2018 and for broadband Australia ranks 38th. Australia’s overall communications technology ranking has failed to 54th.

To put Mr Fletcher’s speech into a global context, he was spruiking the fanciful achievements of a government that has taken Australia to the brink of the abyss.

Under the Coalition government’s watch, Australia has fallen to become a third world nation for telecommunications and is fast approaching this status for several other key factors that highlight why the government has resorted to ignoring reality.

Having changed the NBN build away from an all-fibre network to one based on second rate obsolete copper based technologies and wasting $30 billion in the process, Mr Fletcher argued that “we are going to need to rely on and boost competition to make sure that our fixed networks continue to upgrade and stay in tune with world developments.”

It is worth remembering that the reason for the NBN in the first place was a lack of competition that resulted from the Howard government’s failure to split Telstra into wholesale and retail when it was privatised.

This failure was further compounded by the Howard government’s failure to convince Telstra to upgrade the access network in the early 2000s.
So how can Mr Fletcher side-step history and try to blame Labor for the Coalition’s ongoing failures in the telecommunications portfolio?

Notwithstanding the myopic calls from some in the industry for carriers to be able to compete with NBN Co in urban areas, thereby further reducing NBN Co’s ability to generate revenue, the fact is that NBN Co’s bottom line is terrible, and it is unlikely to get any better whilst the Coalition government continues to blunder along.

Mr Fletcher’s speech is a strong indication that the Coalition government just does not understand telecommunications and it is this misunderstanding of how privatisation has played out in Australia that has led to Australia being the largest global exporter of gas, yet Victoria is seeking to import gas from Singapore.

Whilst Mr Fletcher’s speech was light on detail, such as where the $16 billion will come from to replace the second rate copped based technologies used in the NBN, Mr Fletcher did take us on a global tour of cherry-picked facts that could have been mistaken for an argument for an all-fibre NBN. But surely Mr Fletcher was not arguing for Labor’s original NBN plan?

After providing details of how telecommunications is being used by business and industry and how the NBN has stimulated economic activity and productivity growth, something that is not rocket science, Mr Fletcher failed to identify how fibre rather than copper will promote further advances in economic activity and productivity growth.

The Global Digital Competitiveness Ranking 2019 highlights that Australia is falling further behind the rest of the world and the second rate NBN is a fundamental reason for this fall.

Having argued in 2013 that NBN Co should not launch the Sky Muster satellites and that a Coalition government would do everything that it could to terminate the contract, business, industry and residents in regional and remote Australia can be thankful that the government failed in this endeavor.

But this did not stop the Coalition from upending Labor’s plan for full-fibre with the introduction of second rate obsolete copper based technologies.

It was perhaps fitting therefore that Mr Fletcher started his speech by describing the success of a small business in Darwin, a region where NBN Co was able to complete the FTTP roll-out before the Coalition Government could terminate it.

It is telling that Mr Fletcher has fallen into line with previous Communication Ministers and has started spruiking the party line that “our Liberal National Government has got the roll-out back on track.”

The NBN roll-out is now two to three years behind schedule and the cost to the taxpayer has blown out by about $5 billion, before you factor in the need for an additional $16 billion to be found to replace the second-rate, copper-based technologies.

Having spent five years arguing that the copper-based technologies are good enough because the UK and Germany utilised similar technologies, the Coalition has failed to acknowledge the announcement from the UK government that £5 billion would be allocated to improve broadband in regional and remote regions.

In a recent media release the UK government states "we are setting out plans to invest £5 billion to support the roll-out of full-fibre, 5G and other gigabit-capable networks to the hardest-to-reach 20 per cent of the country.”

"This doubles the previous commitment to support rollout to the hardest 10 per cent."

Yet in Australia, the Coalition government has created a situation where many connected to the NBN cannot get 25 Mbps reliably and most customers are stuck at an overpriced 50 Mbps with little or not hope of ever getting 100 Mbps at a reasonable cost per month.

Last year, the UK government led by Theresa May commissioned the Future Telecoms Infrastructure Review. The review report identified a target for full-fibre to 15 million premises by 2025 and for the entire country of about 30 million homes and millions of businesses and public premises to be covered by 2033.

Australia was moving on the right track, the investment in full-fibre was timely and Australia should have completed the full-fibre rollout by 2020, putting this nation firmly ahead of our competitors in the global shift to full-fibre access networks.

Mr Fletcher is correct to suggest that telecommunications underpins our economy and that the NBN has been beneficial for business activity and productivity growth. Mr Fletcher simply does not understand or he does not want to acknowledge – which could be worse – that fibre would lead to far more business activity and faster productivity growth.

Mr Fletcher’s speech at CEDA’s 40th State of the Nation was a missed opportunity and highlights that this government is stumbling forward with failed telecommunications policy.

Mark Gregory is an Associate Professor in Network Engineering at RMIT University and is the Managing Editor of the Journal of Telecommunications and the Digital Economy

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