Tuesday, April 17, 2018

Today by Paddy Manning

The NBN goes begging
But big questions about the mixed-technology NBN are still unanswered


Outgoing NBN chief executive Bill Morrow was charming as usual at the National Press Club in Canberra today, so much so that the stench around the national project itself went almost unremarked. A shorter version of his prepared speech might be, “how good is the internet?!”, but the more important questions around the future of the NBN remain. When and how will those five million households on fibre-to-the-node be upgraded, and how much will it cost? Will competing technologies undercut the NBN’s profitability? Will the government sell the NBN and, if so, how much of the $30 billion taxpayers have spent on the network will be recovered? There’s probably no point pondering a final question, about how much better the original fibre-to-the-premise network would have been (and how much cheaper, once you factor in the upgrade cost and lower sale price).

There was some actual news in Morrow’s speech: he released headline figures on the “NBN effect”, drawn from a vast household survey done alongside the ABS’s 2016 Census, which found that the current value of all the future extra economic activity generated by the fast broadband network was a staggering $122 billion. Morrow’s central point is that taxpayers are getting good value for the money they spend on the NBN. It’s a brave argument for the NBN to mount, in some ways, because it shows that the Coalition’s attempt to penny-pinch on the upfront cost of the NBN was misguided. Let’s assume that Labor’s fibre-to-the-premise NBN had cost the $73 billion that the government’s consultants said it would’ve cost. The outlay would still have been justified, on the AlphaBeta numbers – and Labor’s simpler, scalable network would not have needed upgrading, and would have got a much better price if sold.

The AlphaBeta analysis is interesting, and based on the widest possible sample that enabled true like-for-like comparisons by postcode. Households in those areas where the NBN rollout was 90 per cent complete were found to be more likely to set up their own business, enrol in an online course, or use an internet-connected device to improve their health. AlphaBeta reckoned the extra economic activity attributable to the NBN was worth $1.2 billion in 2017, growing to $10.4 billion once the network is finished in 2021, and if you do the maths and multiply all that out to infinity, you get a present value of $122 billion.

But, most of us already accepted that faster broadband would add enormous economic value to the nation. No argument. During questions, it was pointed out that when the AlphaBeta survey was done in mid-2016, before the rollout of Malcolm Turnbull’s mixed-technology network had really got going, the NBN was 83 per cent fibre-to-the-premise, so weren’t all these benefits another validation of Labor’s NBN? No, Morrow said, because the study was “technology agnostic” and the benefits were there to be gained regardless of the technology used. Hmm.

The NBN has had a big month: yesterday it was the good news that after NBN cut its wholesale prices, more than a million households had upgraded to a faster  plan; today it is the bad news that complaints to the Telecommunications Industry Ombudsman have spiked again and the communications minister, Mitch Fifield, has announced a root-and-branch review of consumer protections. Only a fortnight ago, Morrow announced he would be leaving at the end of the year. For anyone hoping that a new CEO might provide an opportunity for a reset of the NBN strategy, don’t get your hopes up. The successor will be chosen by a board stacked with the same people who advised Malcolm Turnbull on the mixed-technology strategy in the first place, up to and including chairman Ziggy Switkowski, and they are not for turning.

None of that counts against Morrow, who has done what he was told to do. Asked what lessons he would take from his Australian experience, should another country ask him to build a broadband network, Morrow gave a Delphic answer: “Lock on to the vision of what the network is intended to do.” Here’s one possible interpretation: don’t change direction on a massive nation-building infrastructure project midstream, as the Coalition did with the NBN in 2013.

since this morning

Cardinal George Pell’s lawyers have urged [$] the committal magistrate to throw out the historical sex charges against him attacked the credibility of the complainants.

Opposition leader Bill Shorten has slammed [$] the Greens’ proposal to legalise cannabis as “political clickbait”.

Crikey’s Bernard Keane writes [$] that the Financial Services Royal Commission has left the banks’ vertically integrated wealth management business model a “smoking ruin”.

The Sydney Morning Herald’s Andrew Webster writes that Rugby Australia is set for an ugly showdown with its major sponsors after deciding to not take action against Israel Folau over his anti-gay comments in an Instagram post earlier this month.

As much as half of the Northern Territory is to be opened for fracking after the government lifted [$] a 15-month moratorium.

in case you missed it

In his last column for Fairfax Media, veteran finance commentator Michael Pascoe writes that Australia’s migrant intake is already being cut

Hundreds of Australian businesses were affected by Russian cyber attacks, leading to a rebuke [$] by the Turnbull government for the actions of the Kremlin.

A future Labor government would retain the Turnbull government’s cornerstone National Energy Guarantee but enforce deeper emissions cuts on the electricity industry, suggesting elusive bipartisan action on the climate crisis is within reach.

The Guardian’s Katharine Murphy asks why it is okay for Sky News host Peta Credlin to boast about admonishing energy minister Josh Frydenberg? Peter van Onselen goes a little further in The Australian, pondering [$] why Credlin is still calling the shots.

by Linda Jaivin
The Nation Reviewed
Tutu Bob of Kings Cross
A local tour guide proves there is still plenty of life in the Cross

by Harry Windsor
‘A Quiet Place’, where silence means survival
John Krasinski’s latest film summons terror from the everyday

Paddy Manning

Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including a recently updated unauthorised biography of Malcolm Turnbull, Born To Rule?


The Monthly Today

Fair gone

The Coalition’s aspirational pitch worked a treat

How good’s climate change?

We’ll keep having climate elections until a safer climate wins

Image of Bob Hawke and Bill Shorten

Vale Bob Hawke

Even the Labor great’s passing was well done

A disappearing PM

It was the last gig for a one-man band with a very short set list

From the front page

Fair gone

The Coalition’s aspirational pitch worked a treat


The cases against Colin Manock

Calls mount for a royal commission into SA’s former forensic pathologist

Image of former prime minister Bob Hawke

Remembering the Silver Bodgie

Bob Hawke’s ability to build consensus reshaped Australia

Doomsday is nigh

The ALP’s policies are mild – why are they being treated as a mortal threat?