Malcolm’s Sesame Street moment

James Riley
Editorial Director

“One of these things is not like the others, One of these things just doesn’t belong; Can you tell which thing is not like the others, By the time I finish my song?”

So goes the Sesame Street nursery rhyme, but unfortunately the show began its endless run after Malcolm Turnbull had already passed his formative years.

And boy, did it show when the Prime Minister seized the South Australian power failure to ramp up his rhetoric on infrastructure and ‘smart’ cities: Roads, airports, ports, power, water, IT and so on, and so forth.

Holding on tight: Malcolm Turnbull should have spent more time listening to Big Bird

“What we’re doing here is planning ahead, we’re building the airport, we’re building the roads, we’re planning for the rail … This is critically important infrastructure,” the Prime Minister said.

“We are very committed to having a complete transport solution which will involve roads and substantial additional rail infrastructure, not just to get people to the airport, but to improve the connectivity.”

But did you notice anything missing? Australia’s most extensive and expensive ever infrastructure project perhaps?

The so-called National Broadband Network, conspicuous by its absence, is clearly not like the others.

It did not just did not belong in the former Communications Minister’s talking points, because as South Australia was plunged in developing world darkness, the cat was officially being belled on the Malcolm Turnbull’s hand-crafted version of the older, less improved NBN.

The government-owned network finally owned up to the telecoms world’s worst kept secret. That an embarrassingly large piece of Mr Turnbull’s “multi-technology mix network” – the aged, neglected Optus hybrid fibre-coaxial (HFC) cable network that cost Australian taxpayers $800 million – has been officially deemed as junk.

Farewell then to a network that once promised so much that it gave birth to Telstra’s rival HFC network, a classic unchecked wielding of market power so favoured by the then Melbourne Club (now more officially the Business Council of Australia).

The only surprising thing about the Optus HFC/NBN junk network announcement was that it took so long to make.

Mr Turnbull must now add the repercussions of this to the ever-swelling taxpayers NBN bill and whip it off the company’s bottom line. (To be fair, the contractual arrangements mean Optus won’t see all of their promised paycheck, but oh for the waste of time and effort.)

To add insult to injury – for the PM, at least – the network will be replaced largely by fibre-to-the-kerb, or rather the “distribution point” as it’s called these days.

That’s because everyone knows the kerb is awfully close to the home, and Mr Turnbull spent years lecturing us about how unnecessary and expensive that is.

From the kerb, people already on the Optus network, about 500,000 homes, will be connected with the existing coaxial cable (the only useful piece of the junk network), a copper wire, or even, you will find – and don’t say it too loudly – a fibre optic cable.

This is the not-so-thin wedge for the MTM, the hodge-podge of technologies that Malcolm Turnbull and former Telstra (and Optus) chief executive Ziggy Switkowski cooked up to replace the original 95 per cent FTTH network. They promised save taxpayers billions of dollars and deliver services years early.

It is established history that the MTM will now cost at least $10 billion more than the NBN commissioned by Kevin Rudd and Stephen Conroy, and the timelines are – in telecoms rollout terms –barely distinguishable.

Telstra’s HFC network which has kept reasonable pace with HFC technology upgrades, is in better nick – but it’s is now being upgraded and managed by none other than Telstra.

During ramp up of infrastructure rhetoric Mr Turnbull said his 30-minute cities plan was about people having access to local jobs and not about people travelling from one edge of the city to the other.

“The point is to ensure development is balanced, so that wherever you live, there is going to be, within a reasonable distance, plenty of job opportunities, opportunities for education and recreation,” Mr Turnbull told said in Western Sydney a couple of weeks ago. Quite, Prime Minister.

That was the point of the original NBN, to deliver near universal best in class broadband to keep regional centres competitive with the big cities as well as leveraging modern telecoms networks to remove the tyranny of distance that has disadvantaged the country’s regions for so very long.

Yet there is little use having a road, or God forbid a high speed rail line, to more affordable towns and cities, if the world wide web is crawling every day at work.

When Mr Turnbull baked his rapidly curdling telecom trifle, he made a litany of promises. It turns out pretty much all of these we can now classify as ‘non-core’ promises, to use the political parlance.

Perhaps the most souring of those was the promise that major regional CBDs would still be the mickey-mouse solution. Well they have been sold a Pluto Pup. There are scores of angry, frustrated council across the land – and no doubt every single state government – that are gnashing their teeth.

At least a few that we at have heard of are looking, as state government’s have, to supplement the NBN’s lesser technologies in order to stay at least abreast of the pack.

As more than one person has said over the years, high-speed fibre broadband networks, that have the added benefit of being significantly more resilient to Australia’s regularly extreme weather conditions, are the new electricity.

Coming soon, to a region near you, the digital divide that Malcolm Turnbull’s ideological plan is creating, will be laid bare in the same way that South Australia’s bargain basement electricity grid has been.

That the Optus debacle occurred in Stephen Conroy’s final week as a Senator is quite some justification for his relentless pursuit of the truth behind the propaganda cum nonsense the Prime Minister has been peddling.

Telecoms junkies will also remember that the leak about the appalling state of the Optus network was one of the key documents in the ongoing, outrageous, Orwellian Australian Federal Police investigation into leaks. That it may not even be legal is just the top of the iceberg.

Still, what we now know is that the leaks were in the public interest. More troubling is that the dismissive commentary at the time of the revelations as to their efficacy – and therefore the entire MTM business case – by the government and NBN board and management.

There is also no other conclusion that, several years after Optus cashed its cheque, and dumping its financial albatross Scott-free of any customer grief that the NBN Co – under the guidance of the former chairman of Goldman Sachs Australia – did not undertake much due diligence at all on the network’s physical state.

That it was done post facto raises serious questions about the entire business plan.

So how did we get here? Stepehn Conroy did the original deal with Optus to buy its customers: An addendum to the original NBN plan designed to lower the network’s cost, help accelerate the rollout of FTTH and bring Optus into the tent.

Like all of former senator Stephen Conroy’s NBN deals, the Optus HFC agreement was dumped by mutual consent (if Optus didn’t think it could get a better deal, which is did, this could not legally have been done). But Mr Turnbull is a banker, whose profession is to spend other people’s money, the bigger the price, the higher the fee.

Malcolm Turnbull thought he had the jackpot: The customer and the network as well for more or less the same cost.

Did he ever stop to ask himself why then-Optus chief Paul O’Sullivan was so happy? Ziggy Switkowski, of course, has never met a deal he (or rather his shareholders) hasn’t overpaid for. Come in, spinners.

Frankly, this quickie backroom deal, whose modus vivendum was political expediency should now be considered by Australian National Audit Office.

A harsh light has also been shone on Malcolm Turnbull, the banker, doing a bunch of infrastructure deals for a network rollup and for and internet and flogging it to an unsuspecting public.

Unfortunately for the NBN and its taxpayer shareholders, the network is turning out less like Macquarie’s infrastructure plays – and a whole lot more like the disasters that were Allco or Babcock and Brown.

Mr Turnbull? He’s banked his success fee: The Prime Ministership.

Do you know more? Contact James Riley via Email.

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