The NBN will survive the federal election

By ABC's Alan Kohler

Photo: How did something obviously worthwhile like the NBN become politicised and controversial? (Rodolfo Clix, file photo: www.sxc.hu)

Whoever wins the election this year there will be an NBN. The difference between the ALP's NBN plan and the Coalition's plan comes down to who borrows the money for the last bit of fibre - the Government or you, writes Alan Kohler.

It is easy to forget that the national broadband network is basically a bipartisan project that's going pretty well, considering it was more or less impossible.

Like issues such as whether black is a dark colour, or whether the sun rises in the east, the NBN has become the subject of hot debate these past three years of political madness, but both major parties are now in favour of it and it's only running about three months behind.

Whoever wins the election this year there will be an NBN. It will either be very, very, very expensive or just very, very expensive because it will use some copper instead of all fibre. In that case, full fibre would be available on demand - that is the user pays for the third "very".

You can be forgiven for thinking, however, that the thing is a complete debacle, and is now rudderless, heading in disarray for the scrapheap following the departure of its champion, Stephen Conroy and the resignation of its head, Michael Quigley.

In fact Australia's NBN is a magnificent project, an engineering and social marvel. The only thing wrong with it, like many such projects, is that it was too ambitious.

How did something obviously worthwhile become politicised and controversial?

I suspect part of the reason is that it was given to a very ambitious and ruthless politician who didn't have enough to do. Stephen Conroy needed to express himself and all he had was the NBN, so he turned it into political expression of himself.

Just as certain scents and actions in the wild lead to the "fight or flight" response, with the secretion of ACTH by the pituitary gland and adrenaline by the adrenal gland, Conroy's behaviour stimulated the autonomic nervous systems of the Opposition and triggered its "fight response".

The NBN, Tony Abbott declared, was an outrage that would be abolished, even though its main purpose was to subsidise the internet access of National Party voters.

Conroy, his own nostrils flaring and his pulse accelerating, declared that it was the best thing in Australia's history, ever, and decreed that it would be fibre and satellite only, no copper, that there would no cost benefit analysis and you can all go and get stuffed.

Malcolm Turnbull then took over the shadow communications portfolio from the hapless Tony Smith (now languishing as Shadow Parliamentary Secretary for Tax Reform) and then gradually, painstakingly, moved his party to adopt the NBN - with some copper - as its policy.

For form's sake, he is still required to criticise all and sundry, for everything, all the time, but that's politics.

The project got off to a slow start because it took a long time to negotiate an incredibly complex deal for access to Telstra's pipes and ducts and the closure of its copper network. (Having sold Telstra, the Government effectively bought part of it back).

Then after starting late, the project got further behind for two reasons: first, one of the four sub-contractors chosen - a joint venture between Service Stream and Lend Lease - was not up to the job and had to be removed from the Northern Territory, and second, there weren't enough fibre splicers in Australia.

Optic fibre splicing is a tricky process that basically involves melting the ends of two fibres together with an electric arc. It is not like twisting copper pairs together; if it isn't done right, light leaks out and the signal is corrupted. With the NBN, a lot of the splices have had to be redone because too many people were learning on the job.

An expert in the field has told me that for the NBN to be completed on time, there would have had to be thousands of skilled fibre splicers in Australia. In fact, there were only a few hundred.

In the circumstances - the tortured negotiation with Telstra, the lack of skilled splicers - the NBN was an impossibly ambitious task, as decreed by Stephen Conroy.

CEO Mike Quigley did his best for four years and has now been fired or resigned. Apparently the chairman, Siobhan McKenna, appointed in March, was out to get him; Quigley, meanwhile, was only too glad to be got.

Malcolm Turnbull is out to get all of them, especially Siobhan McKenna, who is also Lachlan Murdoch's key lieutenant. What Kevin Rudd and his new minister Anthony Albanese think of her is anyone's guess, but it's a fair bet there will be considerable changes in personnel at NBN Co whoever wins the election and there will also be changes in what it does.

For a start, the minister will appoint a CEO (the idea that the board will do so is fanciful - it is a ministerial appointment). There will probably be directors coming and going with cardboard boxes as well.

If the Coalition wins the election, the project will become "fibre to the node", which means cabinets will be plonked on street corners and fibre run that far and no further. The rest - the "last mile" - is to be existing copper.

I suspect that if Labor wins, some copper will also creep into the project. Conroy is gone: Albanese will express himself in other ways than "it's all f***ing fibre, got it?".

According to an NBN spokesman, most of the 35,000 premises that have now been connected to the NBN are using speeds greater than the 25 megabits per second (Mbps) maximum that's currently available on copper, suggesting that fibre speeds may be popular. That makes sense, because the internet is rapidly becoming the medium for delivering movies to households.

Optus has acknowledged to me that, in the event a fibre to the node network is built, it is looking at paying for fibre across the last mile and amortising the cost across a two-year bundled contract - like mobile phone plans.

It means the difference between the ALP's FTTP and the Coalition's FTTN comes down to who borrows the money for the last bit of fibre - the Government or you.

Personally I think it should be the Government. That way we would end up with a uniform national network with everyone getting the same service and providers able to plan accordingly.

However I also get that that's really hard to do: it will take a long time and will be a dicey financial proposition. And I hold to the principle that the perfect shouldn't be allowed to drive out the good.

But there is no place for such uncertainty in politics… oh, wait. It's business, not politics, and in business there's never certainty.

Alan Kohler is Editor in Chief of Business Spectator and Eureka Report, as well as host of Inside Business and finance presenter on ABC News. View his full profile here.

More on the NBN:

• Nick Ross: Albanese should give the NBN a PR makeover
• Mungo MacCallum: Turnbull's broadband vision is economic lunacy
• Kevin Morgan: Labor's NBN technology is superior, but at what cost?

The NBN will survive the federal election - The Drum (Australian Broadcasting Corporation)