Transcript: ABC Radio Sydney Afternoons with James Valentine

Topic: National Broadband Network.

 

JAMES VALENTINE:

You might remember a couple of days ago we had a conversation with Mark Gregory and we were talking to him about NBN. This was in response to a story that 7.30 had done, that Geoff Thomson had done on 7.30, talking about the failure of the fixed wire NBN delivery system to deliver. That too many people that were receiving NBN broadband via fixed wire were not getting the kind of speeds that they wanted. The question we were trying to answer was are we ever really going to get the NBN that perhaps we were promised? Are we going to have a full scale, fast, contemporary, 21st century NBN in Australia, National Broadband Network?

So, we spoke to Mark Gregory about this and today, we’re going to hear from Paul Fletcher, who’s the Minister for Communications, Cyber Safety and the Arts in the Australian Government. He’s the Member for Bradfield here in New South Wales. He was director for corporate and regulatory affairs for Optus and also an author of a book about broadband called Wired Brown Land and Paul Fletcher joins us this afternoon. Minister, good afternoon.

 

PAUL FLETCHER:

James, good to be with you.

 

JAMES VALENTINE:

Look, excellent title too – Wired Brown Land. Well done. Very good. Let me play a little of what Mark Gregory was saying the other day.

 

[Excerpt]

MARK GREGORY:

… the Government’s come to the realisation, and be big enough to admit that they've made a mistake. Now, that in itself is going to be difficult for any politician to do. But in Australia's national interest, they need to do this. The next thing they need to do is they need to free up the management team of NBN Co to do what they need to do to take that business forward, and that would mean that they need to provide them with the flexibility to reorganise and to start upgrading to fibre, and to improve connectivity across the fixed wireless.

[End of excerpt]

 

JAMES VALENTINE:

So two things there, Paul Fletcher. Perhaps the first one – Mark Gregory and many others would say look, we're not getting the NBN we need for 2020.

 

PAUL FLETCHER:

Well, just in the last year, the number of premises able to connect has increased by 2.8 million. There are now almost 10 million premises around the country able to connect and we're on track to complete the network rollout next year. Now, when we came to Government, we adopted the multi-technology mix – a mix of fibre to the premises, fibre to the node, fibre to curb, HFC and so on. We did that because it meant the rollout could be completed for $30 billion less and five to eight years more quickly than the original plan. Back in 2013, barely 50,000 premises were connected. So, if you've got a plan to deliver a whole lot of broadband but most people aren't getting it, it's not really having an impact. We're now at the point where 5.5 million premises are connected and the average amount of data that people on the NBN are downloading each month is 240 gigabytes. Back in 2010, that number across the fixed network was 11 gigabytes. So we are all changing our behaviour as a result of improved broadband connectivity.

 

JAMES VALENTINE:

And so you think we've got the broadband we need now and for the future?

 

PAUL FLETCHER:

What I think is that in building out a broadband network what you want to do is get the network built as quickly as possible, have the highest available speeds and do it as cost effectively as you can. So the strategy that we've adopted with a multi-technology mix has been, in my judgement, the right way to do that. More importantly, in the judgement of the NBN board and management team and my predecessor ministers Malcolm Turnbull and Mitch Fifield and we worked through this very carefully when we came into Government in 2013 and we stayed on a consistent path since then to get the network delivered. We now have over 60 per cent of people on the network taking 50 megabits per second or more. So we're seeing a steady increase in the speeds that people are taking and we're coming close to the point of having the network rollout completed, meaning that we have ubiquitous broadband and for 90 per cent of people in the fixed line footprint, that means 50 megabits per second or more. So, of course there's always more that we can do but his is a very significant achievement.

 

JAMES VALENTINE:

The 50 megabit figure is a peak figure that you might only get at best once a day.

 

PAUL FLETCHER:

Well, can I just make something very clear here? On the fixed network – that's to say it's delivered over either fibre or combination of fibre and copper to your home – that issue about once a day does not arise. In the last eight per cent or so of the population, people who are on either fixed wireless or satellite, those networks have as a design characteristic – and it’s true of every fixed wireless or satellite network – that the amount of capacity any individual user can get at any given time, is a function of how many others are also using the service at that time within that cell, on the fixed wireless network, or within the transponder beam.

 

JAMES VALENTINE:

Sure. It’s all analogous to traffic, isn’t it; there’s a lot of cars on the road, you’re not going to be able to do the speed limiter.

 

PAUL FLETCHER:

There is a little bit of that analogy but again can I make it clear, we’re talking here about the fixed wireless network so more than 2000 or so radio towers, base stations, around the country. We’ve been doing a lot to improve people’s experience on their network. Over 200,000 people, in fact, 280,000 premises now take a service. It’s been very well taken up. And what people now get is much, much better than was the case before the network was there, but…

 

JAMES VALENTINE:

[Talks over] Despite the fact that many say it’s not, and we’ve already got plenty of people texting going look on a good day here’s a common one: I was in Madrid recently, broadband speed was 1200 megabits, on a bad day it was 800, I just got the NBN, I’m getting 42 here in Australia. We’re in the 50 lowest countries in the world, we’re 55th in the world for NBN speed, it doesn’t feel like a modern network.

 

PAUL FLETCHER:

It’s a network which has, as I say, 60 per cent of people taking a 50 megabit per second service. There are certainly people taking a 100 megabit per second service. Of course, the point is that once you’ve got that fixed line broadband in place, across much of the network you have a capacity to upgrade to higher speeds and as market demand arises for that, that’s something that NBN Co will be able to do. But it’s also worth making the point that a key factor with the National Broadband Network is equity. Under the arrangements in place before the NBN, there were several hundred thousand homes in the cities that could not get fixed line broadband, and the experience was very patchy depending on how far away you were from the exchange under the old DSL technology. What we've now got in the fixed line footprint is that the commitment is that 90 per cent of homes in the fixed line footprint will be able to get at least 50 megabits per second.

 

JAMES VALENTINE:

Okay.

 

PAUL FLETCHER:

So in terms of equity, it's been about addressing the issue that there were some people, quite a lot of people, who are really getting nothing and now we have a degree of uniformity in what's available.

 

JAMES VALENTINE:

When you were at Optus, when you were writing Wired Brown Land, which system did you support? Would you support fibre to the node, or a mixed delivery system, or did you support fibre to the home?

 

PAUL FLETCHER:

Well, it's interesting. Back in 2007-8 when I was writing the book, the discussion was all about fibre to the node. That's what Telstra had proposed 10 or 15 years ago now, and that's what was originally proposed for the National Broadband Network in 2007. Technology has moved on and the amount of data we're all using and wanting to use has moved on as well. It's important to make the point that under the Multi-Technology Mix, the network is continuing to evolve. So, we're making quite a bit of use now of what's called fibre to the curb, so that's where the optical fibre goes to within about 30 metres of the front door and then it's copper from there. That lets you deliver speeds of 100 megabits per second very readily but it also has all the advantages of being able to roll out relatively quickly and not having to trench through everybody’s front garden.

 

JAMES VALENTINE:

[Talks over] So you were never a supporter of fibre to the home?

 

PAUL FLETCHER:

At the time the discussion was about fibre to the node and that was pretty much the context in which I was writing. The key issue is what is the best way to have the fastest possible rollout, the highest possible average speeds and the most cost effective way to do it. It's interesting that around the world companies like Deutsche Telekom, British Telecom and others are using very much the approach that NBN is using, with a mix of fibre to the premises, fibre to the curb, fibre to the basement, fibre to the node.

 

JAMES VALENTINE:

The other point that Mark Gregory said is that you need to let NBN management do what they want to do, do what they might need to do, in order to increase the delivery, increase the speed, increase the value of the NBN network.

 

PAUL FLETCHER:

Look, it’s very important that NBN board and management get on and do their job and that is what they’re doing. For example, I talked about the fact that over 60 per cent of customers are now taking 50 megabit per second or more. That reflects some major changes that NBN board and management made a couple of years ago which are working their way through the offerings that are available and how customers have responded to that. Indeed right now, NBN management has a consultation paper out with its customers – the retail service providers – proposing further options to change the pricing structure. So they’re very much focused on how do we get the network rolled out as quickly as possible and how do we get people using it and using it at higher speeds?

 

JAMES VALENTINE:

Why have you cut Telstra out of any further deals with NBN?

 

PAUL FLETCHER:

It’s not a case of cutting Telstra out. I presume you’re referring to some comments I made in the Sydney Morning Herald this morning?

 

JAMES VALENTINE:

That they won’t be able to buy in, that their company can’t bid for NBN as such.

 

PAUL FLETCHER:

That’s been the law since 2009 or ‘10 or ‘11. In other words, as part of setting up NBN there was a legal requirement imposed that NBN could not be owned by a business that also provides retail telecommunication services. It was set up to be wholesale only and the reason for that is to maximise competition so that retailers – Optus, Telstra, Vocus, TPG, a whole range of others – are able to then go and use that network to deliver services to customers, make their own choices about what prices they offer, terms of service, and so on.

 

JAMES VALENTINE:

So that separate company is not separate enough? Telstra’s a separate company that could own the NBN is not separate enough?

 

PAUL FLETCHER:

Under the law as it stands, Telstra as the provider of retail broadband services would not be permitted to own the NBN, which is the ubiquitous, increasingly the ubiquitous national wholesale network over which those broadband services are delivered. That’s actually a pretty uncontroversial proposition. There’s not much party political contention on that. That reflects the advice of economists and competition policy experts who say if your objective is to deliver broadband for the most affordable possible price so that people take it up and use it as much as possible, you want to make sure that you don’t have the network owned by a monopoly player with market power. So that’s why the structure is have a single, national wholesale provider of fixed-line broadband services, and then all of the retail service providers are free to deliver services over it and they’ve got the relationship with the customer.

 

JAMES VALENTINE:

Would you expect, I mean, at the start of this year we were rated around 54, 55th slowest nation in the world. Do you expect this to rise in the next few years, next three years?

 

PAUL FLETCHER:

I certainly think that as the network continues to be rolled out and as we get more and more households using it that that will be reflected in higher average speeds, higher amounts of data being used every month and those are the kinds of metrics that are used in these surveys. Ultimately, what we want to make sure is that we, having invested $51 billion of taxpayers’ money in this network – that’s the amount of equity and debt that the Commonwealth has put into NBN Co – it’s very important that this asset is being used to achieve the social and economic objectives it’s designed to achieve. That’s to say, increasing broadband take-up and also then supporting sectors such as agriculture, health, education, small businesses, architects, graphic designers, to give efficient ways of doing business with broadband connectivity. Of course for consumers, people in the home, options of course better entertainment services but also education options. Things like distance education over the satellites for people in remote Australia. Things like the NBN supporting agricultural applications like remote soil sensors. In other words, this is a network designed and built to achieve national social and economic objectives. That’s what we want to see it doing. But the first thing you’ve got to do is get it rolled out as quickly as possible and that’s why we’ve been so focused on getting to the point where we now have almost 10 million premises able to connect and with the network scheduled to be completed next year.

 

JAMES VALENTINE:

Alright. Paul Fletcher, thanks for your time.

 

PAUL FLETCHER:

Thanks James.

 

JAMES VALENTINE:

Paul Fletcher, Minister for Communications, responding to some of the early critiques of the NBN.

 

- Ends -