The Politics    Thursday, August 15, 2019

NBN’s unfinished line

By Paddy Manning

NBN’s unfinished line
As soon as the network rollout is finished, the upgrades will have to begin

Communications minister and former Optus executive Paul Fletcher is in a $51 billion game of chicken with the telco industry he used to work for, as the wholesale NBN Co clambers towards profitability on the back of retailers like Telstra, which reported a 40 per cent dive in earnings this morning. Imagine the conversations going on behind the scenes… Releasing NBN Co’s financial results for 2018–19 overnight, chief executive Stephen Rue defied calls to lower its wholesale charges to telcos – which would trigger a massive writedown in the value of the publicly owned network – insisting instead that the company must remain “financially strong”. But there is a big number missing from the coverage of NBN’s results today, and that’s how much it will cost to fix. From the minute the NBN rollout is completed – if the forecast is right, that’s June 30 next year – the question on customers’ lips will be: “So, when do I get fibre?”

Rue is insisting that the rollout of the NBN to standard premises (excluding new or heritage buildings, for example) will be finished next year “on time and on budget”. Never mind that at a budgeted $51 billion the cost of the NBN is almost twice the original $29 billion estimated when then communications minister Malcolm Turnbull imposed his mixed-technology solution in 2013 – and $10 billion more than the forecasted cost of Labor’s fibre-to-the-premise network.

The NBN has hit peak capital expenditure, and for the first time recurrent earnings are in the black, so full credit to the NBN staff who have worked to get it within striking distance of completion. Interviewed on the ABC’s AM this morning, however, Rue stopped short of an outright denial that the NBN might ask the government for a top-up to get the job done, answering: “We are confident that we will complete the build next year. We continue to grow a great business, and that $51 billion is the funding required to do that.”

Nine Media reported today that “upgrade paths to higher speeds are expected to become an increasingly urgent focus for NBN after the roll out is finished”. Perhaps that should be underlined with a crayon, because there are credible estimates the cost of upgrading the NBN will run to many billions of dollars. NBN needs to keep its prices high in order to be able to fund the upgrades that it knows will be coming, and to stay off the government’s books so the politically vital budget surplus is not threatened. Any writedown will be a matter for the board, on standard accounting principles, but you can bet the directors are highly aware of the wishes of two stakeholders – minister Fletcher, and Finance Minister Mathias Cormann. Retailers can bleat all they want: Fletcher is well used to staring down Telstra. In a joint statement today, the ministers welcomed the results, and Fletcher said that the NBN was “powering towards completion of the network build next year”.

But even if the NBN rollout is completed next year, it will need to be upgraded straightaway. As Labor has pointed out, Infrastructure Australia’s national audit this week gave Turnbull’s supposedly cut-price NBN a very poor report card, observing: “The Fibre to the Premises (FTTP) focus has moved to what is now called a multi-technology mix. This different mix has altered projected infrastructure costs. For example, the need for upgrades to Hybrid Fibre Coaxial (HFC) connections under the current plan drives up capital costs and operating expenses.” Shadow communications minister Michelle Rowland has the killer line: “The Liberal Party promised its multi-technology would be faster and cheaper, yet they have delivered a network which costs more to build, costs more to run, and does less.”

“We will continue to say that New Zealand will do its bit. And we have an expectation that everyone else will as well. We have to. Every single little bit matters … Ultimately we have to take responsibility for ourselves. Australia has to answer to the Pacific. That is a matter for them.”

New Zealand Prime Minister Jacinda Ardern puts Australia on notice on climate change.

“Confession doesn’t place people above the law. Priests should be mandatory reporters, but in a similar way to protections to the lawyer–client relationship and protection for journalists’ sources. For Catholics, confession is a religious encounter of a deeply personal nature. It deserves confidentiality.”

A statement from Peter Comensoli, Catholic Archbishop of Melbourne, who told the ABC yesterday that he was prepared to go to jail in defiance of the planned legislation aimed at forcing priests to report admissions of child sexual abuse made during confession.

Sperm in the time of Facebook
A strict legal framework means there is a shortage of sperm donors across Australia. But online there is a huge and unregulated market of people willing to donate.

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“Is there a way we can make that an overt pathway so that … all media organisations would, by default, go, ‘Because of that provision in the law, we will, on every occurrence, go and speak to the agency and double-check that what we’re looking to publish won’t harm the national interest’?”

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The list

“I haven’t truly loved a Tarantino film since that first Kill Bill and have found most of the recent ones irritating or boring – and in the case of The Hateful Eight, both. In his eagerness to impose a popcorn sensibility on weighty subjects ... he’s indulged a juvenile approach, often to the detriment of his storytelling. This is not a failure of taste, as it might first appear, but of imagination. And it speaks to the circumscribed limits in which he now operates.”

“If ever there were a perfect visual representation of the political power of the gambling lobby, this was it. Just five members of the house of representatives, lined up in a row on one side of the chamber, voting for the establishment of a powerful joint parliamentary committee to investigate the detailed and many allegations of corruption and criminality by Crown Casino.”

“‘I have witnessed villages being inundated, but even at home people have trouble seeing the big picture,’ says Kiribati’s president, Anote Tong. ‘I would like to see the glaciers melting, not just for myself, but for all I-Kiribati people, so I can explain to them what I have seen, and why this matters, and what is happening to us, and why we must take action ourselves.’ Also, he hoped to see a polar bear.”

Paddy Manning

Paddy Manning is contributing editor at The Monthly and the author of Inside the Greens and Body Count.

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