How the Coalition rescued Labor's fantasy broadband network

It is a pleasure to speak to the CommsDay Summit once again. 

 

We are in an election – and I do notice that Mr Albanese and Mr Chalmers keep citing NBN as an area where they would do things differently.

 

So today I want to take a close look at the facts about the NBN.

 

I want to start by looking at the NBN trainwreck our Liberal National Government inherited in 2013, when Mr Albanese was Communications Minister, and the disconnect between the dismal reality of what Labor delivered and the fantasy, make-believe network that exists only in the mind of Labor activists.

 

Next, I want to remind you how we fixed this mess.

 

And third, I will look at the future of the NBN under the two alternative scenarios of a Labor and a Liberal National Government.  As I will point out, for anyone who cares about the future of the NBN, the only rational choice is to vote for a Liberal National Government.

 

Labor’s  NBN train wreck – and their fantasy network

 

Let me start, then, by reminding you just how chaotic things were at NBN in those last days of the Rudd-Gillard-Rudd Government in 2013.

 

The 2012 Corporate plan, released just months before, had a target of 286,000 premises passed by June 2013.  By March 2013, the company had a mere 47,000 premises passed and this included 6,000 that were “service class zero,” meaning they could not actually order a service, as the required infrastructure was not in place.  

 

By April, of the total of 68,000 premises that were claimed as now being “passed”, a full 47,000 were either service class zero or “service class one,” meaning the lead-in was not connected.  

 

In a final June push, NBN Co added a new record of 53,000 premises in two weeks, but of these, a full 20,000 were “service class zero” and a good deal more were “service class one”. 

 

Even with that piling on of unserviceable and difficult to serve premises—kicking the can of an actual working connection down the road—NBN Co fell a full 100,000 premises, or almost 40 per cent, short of its target.  

 

With the June target missed, Labor turned its attention to getting as much as possible done before the September election.  But again, this meant a large number of “service class zero” premises – good for a photo opportunity, but not actually any good for providing a working broadband service.

 

To take just one example, in August 2013, during the election campaign, the then Minister for Communications, Anthony Albanese, stood in front of a big red button and announced that broadband was “now available” to 5,400 homes and business in Sydney’s Western suburbs. 

 

“It’s fantastic to see the NBN fibre network is now available,” Mr Albanese said. What he didn’t say was that close to 1000 of these were “service class zero” and a whopping 98.6 per cent had no fibre connecting the home at all. 

 

Between April and September, NBN added 141,000 premises passed.  Of these new additions, close to 120,000 were declared passed without having a multiport in the street or without the actual fibre going into the home.  

 

At the time of the 2013 federal election, NBN Co said it had passed 209,000 premises -- but close to 80 per cent of these had no fibre going into the home.

 

It was not fibre to the premises—it was fibre to the press release.

 

This was an outcome wholly at odds with the very essence of Labor’s network design premise, which was that they would connect fibre to every home –- regardless of how long it might take, how much it would cost and, bizarrely, regardless of whether or not the customer actually wanted a high speed broadband service.

 

The best guide to future performance is past performance.  So if you want to assess whether Labor could ever have actually delivered their fantasy network, their dismal performance when in government is the best guide.

 

 I noticed the other day Mr Albanese claiming that it is Labor that “does the big things”, and citing as proof the National Disability Insurance Scheme and a fibre based national broadband network.

 

Having had Ministerial responsibility for both NBN and NDIS at different times, the truth is that Labor does not deliver anything.  What they do is come up with a half-baked idea with no practical concept of how to deliver it, and then a Liberal National Government has to fix up their mess.

Our Liberal National Government fixed Labor’s mess

 

When we took over responsibility for the NBN, we set about fixing the problem in a methodical way.  Our 2013 Strategic Review recommended using a combination of rollout technologies, the “multi-technology mix.”

 

By comparison, continuing with Labor’s model would have taken as many as five years longer to complete the rollout, and cost billions of dollars more.

 

If we had stuck to Labor’s plan, when the pandemic hit, and millions of people moved overnight to working and studying from home, Australia would have been in a terrible mess.  But thanks to our work, the NBN was ready for the challenge, with 98 per cent of premises around the country -- over 11 million -- able to connect in early 2020. 

 

We saw a huge spike in demand, with traffic levels up by 70 per cent during the day, and at one point there were 40,000 new connections a week.  But the network stood up strongly. 

 

Today 8.4 million premises are connected and 12.1 million premises are able to connect: more than 99 per cent of all premises.  And with the rollout effectively complete, we have set about upgrading the network, precisely as we always promised to do.

 

In late 2020, the Morrison Government committed $4.5 billion to making ultra-fast broadband of up to 1,000 Mbps, or blazing fast broadband, available on demand to 8 million premises across regional and metropolitan Australia by 2023. 

 

This includes two million homes around Australia --  including 950,000 in regional Australia -- that are today served by fibre to the node.  These will be able to order these higher speeds, and be connected using fibre to the premises to support this.

 

Following our announcement in 2020, Kevin Rudd was quick to tweet that the Liberals had adopted his policy.  This was a telling reminder of how little he knows about network architecture and economics. 

 

Our approach very specifically is to roll fibre down the middle of each street in the footprint –- but only to connect fibre to a customer’s premises when the customer orders a speed high enough to require fibre.  This is a much more capital effective strategy; it is what was done, for example, in the successful New Zealand fibre rollout, and it is a fundamental change from Labor’s misguided approach.

 

Another aspect of our $4.5 billion investment is the commitment of $700 million to establish nearly 300 “business fibre zones” around Australia, including 85 in regional Australia.  Around 90 per cent of all businesses in Australia are located in a business fibre zone.  

 

Any business within a business fibre zone can now order an NBN Enterprise Ethernet service -- delivered over a fibre optic connection to their business premises -- with two big benefits.  First, there is no upfront cost; whereas, historically, customers have faced a charge of sometimes thousands and sometimes tens of thousands of dollars for the optical fibre connection.

 

Second, the monthly wholesale charge is now reduced to match the price charged in the CBDs of our big cities.  Depending on your location, this means a drop of up to 67 per cent in the monthly wholesale charge.

 

We announced another significant change in March: the NBN fixed wireless network serving regional and remote Australia will be upgraded at a cost of $750 million. 

 

The upgrade will expand the fixed wireless footprint coverage by up to 50 per cent, enabling 120,000 additional premises to access fixed wireless services instead of Sky Muster satellite services.  It will see NBN offer new higher speed services to the fixed wireless network: 100 Mbps to all, and 85 per cent will be able to get a 250 Mbps service.

 

This upgrade will also mean higher data allowances for NBN Sky Muster satellite users, rising from 50 GB today to 90GB within two years.

The future of the NBN

 

Let me now to look at the future of the NBN under a Liberal National Government.  Our focus continues to be on driving for the maximum economic and societal benefit out of the NBN – including through the delivery of our very significant program of upgrades to both the NBN fixed line network and the fixed wireless network.

 

We are progressing well on delivering the upgrades that I have discussed.  The fixed line network upgrades are on track for completion by the end of 2023.  So far we have announced the location of 1.7 million premises where an existing FTTN customer will soon be able to order a fibre to the premises service.   

 

There are now 100,000 premises, within that 1.7 million, where orders are already being taken.  1.4 million premises have been distributed to delivery partners for design and field work and 850,000 have been released for construction. Over coming months we will announce the further 300,000 premises in the footprint, and we will steadily “turn on” each of these areas so that customers wishing to place an order for a FTTP service are able to do so.

 

The fixed wireless upgrades will commence this year and be completed in 2024. Both sets of upgrades are fully planned, fully costed and will be delivered on time and on budget.

 

Let us look at what, by contrast, Labor is offering.

 

First, they are copying the Morrison Government’s plan for the fixed line upgrade.  Labor has finally abandoned its foolish and expensive strategy of building a fibre connection to every home, regardless of whether or not the customer wants a broadband service with a speed high enough to require fibre.  

 

Second, inherent in Labor’s policy is to do exactly the same as we are already doing through to the end of 2023, with a further two million premises able to order a fibre to the premises service. 

 

Labor also makes vague claims about going further beyond that point.  But what is abundantly clear is Labor has not done the detailed work – about where these services will be delivered, and about how it will be funded. 

 

What we do know though is this: Labor lacks the technical understanding to properly plan or deliver their upgrades.  They are simply cherry picking suburbs in marginal electorates and making promises they can't keep.

 

What we have already seen, and will continue to see from Labor in this campaign, is a travelling roadshow of announcements about upgrades in key seats, with no planning behind it.

 

Not only does Labor lack the track-record on delivery to roll out their upgrades; they also can’t tell you how they are going to pay for them. 

Mr Albanese still hasn’t given a straight answer on how he will fund this upgrade: not in his budget reply speech; not in the launch of his regional communications plan; and not on the ground with his shadow Minister trying to spruik Labor’s credentials on regional broadband.

 

We all know what this means: more direct taxpayer funding of NBN. By contrast, under the Coalition, NBN is steadily reducing the loan from the Commonwealth, with more than $12 billion already repaid to Australian taxpayers.

 

I am not going to stand up here today and announce a shopping list of additional upgrades in suburbs in marginal seats.

 

But what I will make perfectly clear is that a re-elected Morrison Government will continue to drive for the maximum societal and economic benefits out of this vital national asset.  As I made clear in the statement of expectations which I issued to the ACCC in August 2021, our Government has three key objectives for the NBN:

• • It should support the sector to provide high quality broadband services for consumers at an affordable price
  • NBN Co should to continue to invest in upgrading its network, repaying its debts to the Commonwealth and delivering an appropriate positive return to shareholders; and
  • It should support the ongoing sustainability of the retail broadband sector, allowing retailers to continue to invest in their networks.

 

What we are not going to do is what Labor has done: simply make it up to meet an election timetable, without knowing how much it will cost, how it will be funded, and where the premises will be. 

 

That is the same disastrous approach Labor took in 2009 when Kevin Rudd announced that his government would build a national broadband network, it would serve 90 per cent of homes with access of speeds up to 100Mbps, take 8 years to complete and cost $43 billion.  We all know how that story ended.  But bizarrely it seems Labor has no capacity to learn from its mistakes.

 

The third thing we know about Labor is that they always forget about regional Australia.  It became very clear when we announced our upgrade to the fixed wireless network that Labor had forgotten about the people this network serves.  Embarrassingly, they had to come out and match our policy within days of its being announced.

 

The fourth thing about Labor’s broadband policy, of course, is that Labor has a track record of completely stuffing up the delivery of broadband.  So whatever they say, ignore it. 

 

The real and most important difference between the parties on the NBN comes down to this: our Liberal National government has a proven capacity to deliver our policies and the Labor Party has consistently demonstrated the opposite. 

Conclusion

 

Let me conclude with the observation that the modern left in politics is characterised by the postmodern belief that if you just say something is so, it is so, and you can ignore the reality.

 

Labor’s NBN true believers seem to think that if they talk about the fibre nirvana that Labor was going to deliver, that is the same as delivering it. 

Well, it’s not.  What Labor delivered was hopeless.

 

It took a Liberal National Government to deliver the NBN Australia desperately needed when the pandemic hit.

 

And it will take a Liberal National Government to keep delivering and upgrading the NBN to meet Australia’s needs.

 

Speech delivered to the CommsDay Summit in Sydney, 4 May 2022