Turnbull contradicts himself on NBN

In 2013, former Communications Minister, Malcolm Turnbull, abandoned plans to build a fibre to the premise (FTTP) National Broadband Network (NBN) across the majority of the country, instead replacing it with a multi-technology mix that included previously retired copper cabling.

This change was marketed as a cost-saving move. However, the huge amount of rectification works required quickly saw the price tag for the NBN surge from an expected $30 billion to around $50 billion.

As a result, taxpayers have been left with a questionable $50 billion NBN that costs customers more than the old ADSL service it replaced, and is often little faster, according to the head of the Australian Competition and Consumer Commission (ACCC), Rod Sims:

“We are now observing prices of low-speed NBN plans offered to new customers that are at least $10 per month higher than what consumers paid for equivalent plans on the ADSL network.”

NBN wholesale prices for the 12-megabit plan will increase from $12.75 to $17.50 a megabit per second, but many consumers are already paying more for basic NBN plans than existing ADSL services.

On Friday, Malcolm Turnbull vigorously defended his changes to the NBN, arguing that it is delivering as promised:

Former prime minister Malcolm Turnbull has launched an impassioned defence of the National Broadband Network, labelling a core criticism of it “absolute BS”…

After a speech spruiking the benefits of innovation in business and government, Mr Turnbull sat down for a chat on stage with Matt Barrie, the CEO of freelancer.com…

Mr Barrie asked him about the NBN’s relatively slow speeds by global standards, which have frustrated some customers – particularly those who never actually experience the maximum speed advertised under their plan.

“Despite spending $50 billion in Australia’s biggest infrastructure project ever, today we’re ranked 62nd for global broadband speed, 40 per cent slower than the global average,” Mr Barrie said.

Mr Turnbull cut him off before he completed the question.

“Those statistics are absolute BS, Matt. Absolute BS. There is no comparable developed country which has as ubiquitous availability of high speed broadband as Australia. I mean, seriously,” Mr Turnbull said…

“One of the great fallacies of broadband economics is the assumption that the amenity, that is to say the use or the utility to the customer, of broadband increases with the data rate in a linear fashion. It absolutely doesn’t. But that is the sort of assumption that a lot of people in the tech sector just sort of blithely assume. It simply isn’t right.”

In other words, Mr Turnbull believes the speed issue is overblown.

He also highlighted the rise of streaming services like Netflix in the years since the NBN was first announced, saying that shift had drastically altered the nature of the industry.

“The assumptions underneath broadband have changed. If you go back when Rudd announced the NBN, back in 2008, we were talking about how long it took you to download a file, download a movie. What we’ve now got is a world of concurrent streaming,” he said.

“So instead of people needing, intermittently, a very high data rate, you’ve got everybody wanting, needing, a substantial data rate – it might be with a number of devices, it might be 25, 30, 40 Mb/s, it might be 10.

“The bottom line is, that has put so much more demand on the network.

“You actually have a finite amount of bandwidth, and the demand – because of the streaming phenomenon – is increasing at a rate that had not been anticipated, other than by some very wise people, until recently.”

So according to Malcolm Turnbull, the NBN has been built ‘fit for purpose’ and provides adequate speeds. However, the unanticipated rise of streaming “has put so much more demand on the network”, and that is fast overrunning the “finite amount of bandwidth”.

In other words, the NBN has not been built to be future proof and is likely to hit capacity constraints before it is even finished, despite its monstrous price tag.

As an aside, I reluctantly shifted to the NBN last week. Below is my internet speed immediately prior to the NBN’s installation (under Telstra’s existing cable broadband):

And here’s my current speed (which is capped at 50Mbs) under the same priced NBN:

As you can see, I have given up significant download speed for better upload speed. This is a reasonable trade-off overall, but not worth the cost of investment in the NBN.

The NBN should have left city dwellers with decent internet alone (and simply renamed their existing service the NBN), and concentrated investment into areas without cable broadband.

Leith van Onselen
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Comments

  1. thomickersMEMBER

    did you test on the 50/20 plan or the 100/40 plan? if it was the latter…. i’d be raging…..

      • I’m paying $75 for 50/20, and while better than the ADSL at the same location, is the best the copper will ever do, regardless of how much I’m willing to pay.

        • Mine’s $90 through Telstra, but it includes a home phone (which the wife insisted on). I paid $89 under the previous cable plan (also with phone). I wouldn’t have changed if given the choice. But they are turning the old network off.

          What was the point of the NBN in my area when it is no better?

          • The point WAS to have a fibre network that would be usable for the next 100 years, in much the same way as the copper network was for the last 100ish.
            Unfortunately politics got in the way and it was hobbled beyond belief.

  2. At least we will have a shovel ready project to do when the next GFC arrives!

    Pretty happy with my FTTC NBN 50/20 service after years of 5Mbps ADSL and the FTTC means further upgrades (extending fibre to the house) will be easy and cheap.

    FTTC was a really easy install as well.

    Trying to get a HFC NBN connection for the office is proving painful because they need to lay a cable into the property and that means ripping up concrete.

  3. Your upload and download would be independent and equal under FTTP with a base speed of 100/100 Mbps if that choice was made by NBN Co. Talk about f’ed.

  4. Dr Karl just tweeted that he was getting 400 Mbs in Argentina, and 175 Mbs in fcuking Mongolia.

    A guy responded and said that some family of his in Thailand had just received a free upgrade to 1000 Mbs, as a courtesy from their ISP. Thailand FFS. And on NBN I’m getting 50 Mbs, theoretically.

    The mates…Rupert…Turnbull…etc…won again, with the NBN.

    • Most highly populated, advanced western places are moving onto Gigs / second – most. Thailand is years behind. Japan introduced it almost ten years ago.

  5. “The NBN should have left city dwellers with decent internet alone (and simply renamed their existing service the NBN), and concentrated investment into areas without cable broadband.”

    WTF is that meant to mean ?

    Just as a heads up a middle of the road country lets say around 60th in the world should be expecting 100mb / second right now on unlimited amounts for around $14-20 AUD.

    An advanced western country like Australia are already on Gig/second downloads for around $20.

    Australia has amongst the most expensive in the developed world for internet – and also amongst the worst.

    Please refrain from making technical suggestions – this blogs behaviour / views during the initial stages was nothing short of a disgrace.

    • You’re missing my point. We basically duplicated a system that was okay (but not great) with a system that is no better. What was the point? They should have just left it alone and focused on areas where there was no cable rather than wasting time and money doing a half arsed duplication that’s no better.

      I was happy with my existing connection – even for online gaming (which I do a lot of). But I am not happy about being forced onto another system that is no better at massive taxpayer expense. Total waste.

      • Leith, you’ve got a HFC (telstra cable connection). They have pretty much left that alone, nothing was going to be duplicated there in the Libs grand plan. However, they realised the HFC needed massive upgrading to put whole neighbourhoods on it without overloading. And in fact the optus HFC was such poor quality they trashed it into the bin completely (writing off the 500m or so purchase price they paid for it and starting from scratch).

        Nothing better demonstrates the disaster of the Libs NBN than that. The initial evidence based idea was to do it right, a total fibre network, with theoretical speed well in the GIGABITS. This blog’s early posts supporting the junk asset we now have were quite disappointing and probably uninformed.

  6. What utter BS is Turnbull’s surprise at the increased demand. I recall an interview where Turnbull openly mocked people for being obsessed about delivered speeds. He said at the time it’s the utility provided, what people did with the speed that mattered. Therefore he didn’t see any need for speeds beyond 25mbs (can’t recall the exact figure). At the time he said 100mbs was not needed. This allowed him to then advocate that FTTP wasn’t needed. For him to now say he didn’t know is BS as the argument for greater capacity and future streaming services into households was made. But Foxtel doesn’t want that I guess. It’s what you get when an investment banker trying to flip for profit tries to mess with a long range 50yr + infrastructure project. If Turnbull rolled out the phone network there would only be one pay phone in each street because people don’t need to make calls very often….

    • Goldstandard1MEMBER

      +1 totally spot on. The comments actually demonstrate that he was not listening to people who knew where the internet was heading or even WAS at the time.
      Industries are BUILT on fast speeds. Gaming/coding/google analytics response times/high resolution media just the tip of the iceberg.
      Judging by his comments he was having a crack at pirating but high speeds actually limit that by helping deliver superior products and inspiring development………… Instead we import more warm bodies, dig holes and make sure everybody maxes out on housing debt. What a bloody waste of a tech age opportunity Australia has made of this so far….

    • +2, this is the greatest example of infrastructure vandalism in Australia’s history. Let Abbot and Turnbull go down in history as the culprits, who did Murdoch’s bidding. (this is coming from someone who despises Labor too, but has an objective interest in tech)

    • I remember that MT interview as well. He was spinning his fancy new iPad around on the table. MT and his friends would never do anything so low-class as watching TV shows (or creating graphical content, or having a video conference). They just use it to check their share and property portfolios. Don’t need much bandwidth for that.

  7. The90kwbeastMEMBER

    Why Turnball hasn’t received more public criticism of the NBN changes he made astounds me, he has patently delivered Australia a $50b turd compared to what could have been under a system primarily with FTTP, which was also costed at $50b (ok it probably would have overrun also to $70b but at least would have left the country with a first class system).

    • The original (FTTP) rollout was costed at 44.1bn, based on *actual* costs over three years of volume rollouts. It had gone up from about $40bn from its original costings (after the initial trials), and would have been $50bn tops.

      The Coalition’s costings were always made up. Unlike the $44.1bn FTTP costings, they hadn’t done trials, and they hadn’t done any volume rollout. They just made up a figure for what it would cost, and made up a scary fictional figure for an FTTP rollout that was just pulled from thin air.

      It’s really important to remember this. The idea that the FTTP rollout would cost significantly more than $44.1bn (despite actual costs from a few years of volume rollout being in line with the $44.1bn costing) was a fiction created by the LNP and pushed by a gullible media. As was the idea that an FTTN and HFC network would only cost $30bn. It was a lie designed to help win an election, and the media took their fiction at face value instead of listening to any experts…

  8. Netflix launched its streaming service in 2007. Turnbull is a complete moron, anyone who knew anything about technology could see that FTTP was the only solution to go for, not just a few wise men.

    • You flatter him by calling him a moron, as it suggests he had good intentions. I doubt turdball gave a damn whether his FTTN scheme would be better or even work. His job was to protect foxtel and he did it shamelessly, like the corrupt little corporate parasite he always was.

  9. Even StevenMEMBER

    Agreed, UE. Seems like Australia just can’t help but fail at everything it does. The politicians in particular seem to have had a corrosive influence on almost every aspect of our society as this NBN debacle highlights.

    I am disappointed in what we have become.

  10. Lodge a complaint with Telstra that your download speed was reduced without notice from a 100Mb to 50Mb and they should move you to a 100/40 plan.

    Worked for me and two other mates. I am on 100/40 for the price of my previous 100Mb/1TB download plan ($79/mo).

    Obviously if you actively picked a new 50/20 plan as part of migrating then that’s unlikely to work.

  11. The REAL Prime Minister of Australia, Rupert Murdoch, was wise enough to foresee streaming, and also clever enough to enrich himself by killing it off.

  12. Turdball is just acting. He didn’t care if the changes he made were better or worse, he received his political orders from Rupert and did what he was told. Turdball was always a truely repulsive financial parasite, but his smooth talking and politically correct views dazzled the gormless masses.

  13. NBN is a textbook example of bad infrastructure procurement and investment. The NZ network is far better- fth with almost 1GB up and down real world and without contention during peak demand periods (cold nights). It has a slightly less ambitious footprint (rural) but that is now being addressed by improved wireless (as per the NBN). There is an experience curve with fth, which NBN was never allowed to deliver. Now NBN is saddled with very high operating costs and poor reliability. At the margin (and it is a big margin), it will lose volume and revenue to 5g). It will never return its cost of capital. The LNP seems to have a preference for steam driven everything and is resistant to digital and renewable. A triumph of ideology over evidence and logic.

  14. Turnbull didn’t mention improvement in file compression did he?
    I guess not.
    No one delivers new high density resi developments these days without FTTP.
    Why should the rest of us get stuck with the crappy hybrid NBN copper to the home?