It’s no secret that I’m loudly, violently opposed to the Liberal’s Multi-Technology Mix NBN solution and I’ve made it my business to ensure that the wider Australian public is aware of frightfully bad it will be. The reasons as to why the Liberal’s solution is so bad are many however they can almost all be traced back to them wanting to cast anything that Labor created in a poor light and that their ideas are far better. Those of us in the know have remained unconvinced however, tearing into every talking point and line of rhetoric to expose the Liberal’s NBN for the farce it is. Now, as the Liberals attempt to rollout their inferior solution, they are no longer able to hide behind bullshit reports as the real world numbers paint an awfully bad picture for their supposedly better NBN.
The slogan of the MTM NBN being “Fast Affordable. Sooner.” has become an easy target as the months have rolled on since the Liberal Party announced their strategy. Whilst the first point can always be debated (since 25Mbps should be “more than enough” according to Abbott) the second two can be directly tied to real world metrics that we’re now privy to. You see with the release of the MTM NBN strategy all works that were planned, but not yet executed, were put on hold whilst a couple FTTN trial sites were scheduled to be established. The thinking was that FTTN could be deployed much faster than a FTTP solution and, so the slogan went, much cheaper too. Well here we are a year and a half later and it’s not looking good for the Liberals and unfortunately, by extension, us Australians.
It hasn’t been much of secret that the FTTN trials that NBNCo have been conducting haven’t exactly been stellar with them experiencing significant delays in getting them set up. Considering that the Liberals gave themselves a 2016 deadline for giving everyone 25Mbps+ speeds these delays didn’t bode well for getting the solution out before the deadline. Those delays appear to have continued with the trial now having just 53 customers connected to the original Umima trial and not a single one connected to the Epping trial. This is after they gave a timeline of “within a month” in October last year. Suffice to say the idea that FTTN could be made available to the wide public by the end of 2016 is starting to look really shakey and so is the 2019 timeframe for their completion of the NBN.
Worst still the idea that the MTM NBN would be significantly cheaper than the full FTTP NBN is yet again failing to stand up to scrutiny. Additional cost analysis conducted by NBNCo, which includes opex costs that were previously excluded under previous costing models, has seen the cost per premises estimate for brownfields (deployed to existing houses) rise to $4316. That’s a substantial increase however it’s a more accurate representation of how much it actually costs to get a single house deployed. Taking that into account the total cost for deploying the FTTP NBN comes out to about $47 billion, very close to the original budget that Labor had allocated for it. Whilst it was obvious that the Liberal’s cost-benefit analysis was a crock of shit from the beginning this just adds further proves the point and casts more doubt over the MTM NBN being significantly cheaper.
I’m honestly not surprised by this anymore as its clear that the Liberals really had no intent of adhering to their rhetoric and were simply trashing the FTTP NBN because it was Labor’s idea. It’s an incredibly short sighted way of looking at it, honestly, as they would have won far more favour with a lot of people if they had just continued with the FTTP NBN as it was. Instead they’re going to waste years and multiple billions of dollars on a system that won’t deliver on its promises and we’ll be left to deal with the mess. All we can really hope for at this point is that we make political history and cement the Liberal’s reign under the OneTermTony banner.
There seems to be this small section of my brain that’s completely disconnected from reality. At every turn with the Liberal’s and the NBN it’s been the part of my head that’s said “Don’t worry, I’m sure Turnbull and co will be honest this time around” and every single time it has turned out to be wrong. At every turn these “independent” reports have been stacked with personnel that all have vested interests in seeing Turnbull’s views come to light no matter how hard they have to bend the facts in order to do so. Thus all the reports that have come out slamming Labor’s solution are not to be trusted and the latest report, the vaulted cost benefit analysis that the Liberals have always harped on about, is a another drop on the gigantic turd pile that is the Liberal’s NBN.
The problems with this cost-benefit analysis started long before the actual report was released. Late last year Turnbull appointed Henry Ergas as the head of the panel of experts that would be doing the cost-benefit analysis. The problem with this appointment is that he’d already published many pieces on the NBN before which where not only critical of the NBN but were also riddled with factual inaccuracies. So his opinion of the NBN was already well known prior to starting this engagement and thus he was not capable of providing a truly independent analysis, regardless of how he might want to present it. However in the interests of fairness (even though Turnbull won’t be doing so) let’s judge the report on it’s merits so we can see just how big this pile of horseshit is.
The report hinges primarily on a metric called “Willingness to Pay (WTP)” which is what Australians would be willing to pay for higher broadband speeds. The metric is primarily based around data gathered by the Institute for Choice which surveyed around 3,000 Australians about their current broadband usage and then showed them some alternative plans that would be available under the NBN. Problem is the way these were presented were not representative of all the plans available nor did they factor in things like the speed not being guaranteed on FTTN vs guaranteed speed on FTTP. So essentially all this was judging was people’s willingness to change to another kind of plan and honestly was not reflective of whether or not they’d want to pay more for higher broadband speeds.
Indeed this is even further reflected in the blended rate of probabilities used to determine the estimation of benefits with a 50% weighting applied to the Institute for Choice data and a 25% modifier to the other data (take-up demand and technical bandwidth demand) which, funnily enough, find in favour of the FTTP NBN solution. Indeed Table I makes it pretty clear that whenever there was multiple points of data the panel of experts decided to swing the percentages in ways that were favourable to them rather than providing an honest view of the data that they had. If the appointment of a long anti-NBN campaigner wasn’t enough to convince you this report was a total farce then this should do the trick.
However what really got me about this report was summed up perfectly in this quote:
The panel would not disclose the costs of upgrading [to] FTTP compared with other options, which were redacted from the report, citing “commercial confidentiality associated with NBN Co’s proprietary data”.
What the actual fuck.
So a completely government owned company is citing commercial in confidence for not disclosing data in a report that was commissioned by the government? Seriously, what the fuck are you guys playing at here? It’s obvious that if you included the cost of upgrading a FTTN network to FTTP, which has been estimated to cost at least $21 billion extra, then the cost-benefit would swing wildly in the direction of FTTP. Honestly I shouldn’t be surprised at this point as the report has already taken every step possible to avoid admitting that a FTTP solution is the better option. Hiding the upgrade cost, which by other reports commissioned by the Liberals is to be required in less than 5 years after completion of their FTTN NBN, is just another fact they want they want to keep buried.
Seriously, fuck everything about Turnbull and his bullshit. They’ve commissioned report after report, done by people who have vested interests or are in Turnbull’s favour, that have done nothing to reflect the reality of what the NBN was and what it should be. This is just the latest heaping on the pile, showcasing that the Liberals have no intention of being honest nor implementing a solution that’s to the benefit of all Australians. Instead they’re still focused on winning last year’s election and we’re all going to suffer because of it.
If it wasn’t for the HECS/HELP system I definitely wouldn’t be in the position that I am today. Whilst I didn’t come from an exactly poor family we were definitely on the lower end of the middle class and the prospect of going to uni meant that I’d have to start paying my way. Thankfully I was able to defer my HECS debt until I was able to pay it back through tax allowing me to attend university without having to fork out the $25,000 or so which I simply did not have. After 4 years of an accelerated career that was directly attributable to my university experience the debt was fully repaid back to the Australian government with a little bit of inflation added on top for good measure.
In other countries this same situation probably wouldn’t have been possible. In the USA for instance I would have had to secure a student loan with a bank, something that probably would have seen me paying exorbitant interest rates on top the much higher cost of education. Even if the loan amount remained the same I would’ve been repaying the debt for at least another year just because of interest and I would have been much less inclined to take the risks that I did knowing that I’d have to make those monthly repayments regardless of my current employment situation. The couple percent interest I paid on my HELP debt to curb the deflation on the debt seems like nothing in comparison to that.
The difference between the two systems is the motive behind the loans. HECS/HELP is made by the government to encourage people to go into higher education in the hopes that, because of said education, they will get higher paying jobs and will then be able to contribute more to the economy as well as repaying their debt. Loans made by banks on the other hand, regardless of their intended purpose, are done purely for the motive of generating a profit and they will do anything to maximise the return on them as such. This is why the Liberal’s proposal to securitise (read: sell off) student debt is an inherently bad move.
Should such a deal go down the government would likely have to sell the debt for a fraction of its current value, usually on the order of 40%~60%. This would mean an instant cash windfall of approximately $11 billion or so with the annuity streams being collected by the new owners of the debt. If your government is strapped for cash (which we really aren’t at the moment) then this would seem like a good move however it would only account for 3% of our total budget and only for the year in which it happened. For comparison HECS/HELP revenue was around $1.4 billion back in 2009/2010 financial year meaning that the $11 billion windfall would become a shortfall in 8 years (probably less considering that repayment rates would have likely increased in the interim). It’s a short term cash grab that will make the budget its in look a lot better but at the cost of making every budget that follows it look a lot worse.
The real problem though is the transfer of government owned debt to a private company, one that will inevitably look to make the most out of their investment. Whilst HECS/HELP is one of the few things you can’t discharge through bankruptcy you’re under no obligation to repay it should you not have the means to, a key to encouraging people to at least attempt higher education to further their careers. Should the debt be owned by a bank however there’s no guarantees that the same structures will hold and it’s almost inevitable that the banks would look to squeeze delinquent loans for all they’re worth. Don’t believe me? Just look at the student loan situation in the USA.
Whilst the Liberals may have said that such a plan is not current policy the fact that it’s under consideration should ring alarm bells. It’s an incredibly short sighted move, one that favours short term gains over long term losses which is something that a “fiscally responsible” government should be doing everything to avoid. Selling off national assets, especially one that provides as much value as HECS/HELP does, will only hurt us in the long term no matter how warm and fuzzy running a surplus makes you feel now.
There’s been little doubt in the tech community that Malcolm Turnbull had it out for the FTTP NBN. He’s been quite critical of the program since its inception and has taken every opportunity to point out that it’s behind schedule (even though it’s 3 months in a 10+ year project). The FTTN policy which they campaigned with was universally derided yet Turnbull fervently defended it at every possible opportunity. Whilst I was somewhat optimistic that it was all campaign blather just to secure votes from some select parties, especially considering its non-core status, I still couldn’t shake the feeling that Turnbull really thought his policy was worthwhile, especially when he said FTTP had superseded FTTN.
Turns out that my predictions have largely turned out to be correct.
In a stark reversal on his previous positions about the NBN Turnbull has now instead opted to conduct a full review to ascertain how long the current rollout will take and if there’s anyway that can be reduced. Whilst on the surface this would appear to be just the next logical step in taking the axe to the FTTP program however it’s been shown that FTTP would end up costing about the same so any cost benefit analysis would conclude it would be the better option. Of course this also opens the door for Turnbull to take credit for the whole program by only making some superficial changes to it. Whilst this is probably the best outcome I could hope for, especially considering that current fibre rollouts will continue until the review is completed (expected to take 6 months), it doesn’t make up for the fact that Turnbull has taken every opportunity to blast the NBN and now wants to take credit for it.
Of course there’s every chance that he’d could still do a lot of damage to it without fundamentally changing the technology that underpins it. Now that the entire NBNCo board has resigned at his request Turnbull has apparently tapped former Telstra CEO Ziggy Switkowski to head the new board. Anyone who lived through Ziggy’s tenure as CEO of Telstra will tell you that he’s bad news for a telecommunications company as he proceeded to run Telstra into the ground and was ousted late in 2004. He has not been involved in the telecommunications industry since then so any cred he had has long since lapsed and would be far more likely to give a repeat performance of his time with Telstra. This could be made up for somewhat by the fact that NBNCo is still on the government’s leash but I’d rather not have to get them involved every time Ziggy makes a poor business decision.
Talking this over with my more politically minded friends it seems like this will be the only avenue in which we will be able to get the FTTP NBN we want: by letting the Liberals claim it as their own. Personally that gives me the shits as it shows that politicians aren’t interested in continuing large, multi-term infrastructure projects unless they can somehow claim ownership of it. Of course the tech community will always know it was Labor’s idea in the first place but the larger voting public will likely see it as a beleaguered project which the Liberals valiantly fixed, something which is provably wrong. In the end I guess I don’t care what the public perception is as long as it gets in but I’d rather not have to argue the point to convince people otherwise.
So hopefully 6 months from now I’ll be able to write a post about how the review has come back and magically convinced Turnbull of what we all knew: the FTTP NBN is the way to go. Whilst I’m struggling to figure out how NBNCo could do what they’re doing faster and more efficiently I’m sure they’ll be able to find a few percent here or there that will be enough to ensure the overall structure doesn’t change dramatically. With that Turnbull can claim victory that he’s able to do the exact same thing better than Labor and I’ll write another angry rant, albeit from behind a nice, fat 100MBs pipe.
The Internet situation I have at home is what I’d call workable but far from ideal. I’m an ADSL2+ subscriber, a technology that will give you speeds up to 25MBps should you be really close to the exchange, on good copper and (this is key) make the appropriate sacrifices to your last mile providers. Whilst my line of sight distance to the exchange promises speeds in the 15MBps range I’m lucky to see about 40% of that with my sync speed usually hovering around the 4~5MBps range. For a lot of things this is quite usable, indeed as someone who had dial-up for most of his life these speeds are still something I’m thankful for, but it’s becoming increasingly obvious that my reach far exceeds my grasp something which as a technology centric person is fast becoming an untenable position.
Honestly I don’t think about it too much as it’s not like it’s a recent realisation and, since the difference between the best and worst speeds I’ve had weren’t that great in retrospect, I’ve developed a lot of habits to cope with it. Most of these are running things over longer periods when I wouldn’t be using the Internet anyway but not all tasks fit nicely into that solution. Indeed last night when I wanted to add in a video that I recorded to my post, one that was only ~180MB in size, I knew there was going to be a pretty long delay in getting the post online. The total upload time was around 30mins in the end which is just enough time for me to get distracted with other things and completely forget about what I was doing until later that night.
Sure it’s not an amazing example of why I need faster Internet but it does highlight the issue. The video wasn’t particularly large nor super high resolution (720p, 60fps), it was produced on technology that’s over 2 years old and uploaded to a service that’s been around for 7 years. The bottleneck in that equation is the connection that all of them share from my home network, something which hasn’t changed that much in the last decade that I’ve been a broadband Internet user.
For me it’s even worse when I run up against the limitations of paltry connection for things like services I’d like to host myself. In its infancy this blog was hosted from my little server at home but it became quickly apparent that little things like pictures were simply untenable because they’d take forever to load even if I shrunk them down to near unusable sizes. It became even worse when I started looking into using the point to point VPN feature in Azure for connecting a small home environment to the virtual machines I’m running in the cloud as my tiny connection was simply not enough to handle the kind of traffic it would produce. That might not sound like a big deal but for any startup in Australia thinking about doing something similar it kills the idea of creating using the service in that fashion which puts a lot of pressure on their remaining runway.
It’s reasons like this which keep me highly skeptical of the Liberal’s plan for the NBN as the speeds they’re aspiring towards aren’t that much dissimilar to what I’m supposed to be getting now. Indeed they can’t even really guarantee those speeds thanks to their reliance on the woefully inadequate copper network for the last run in their FTTN plan. Canberra residents will be able to tell you how much of a folly their idea is after the debacle that is TransACT (recently bought for $60 million and then its infrastructure sold for $9 million) which utterly failed to deliver on it’s promises, even when they deployed their own copper infrastructure.
It also doesn’t help that their leader thinks that 25MBps is more than enough for Australian residents which, if true, would mean that ADSL2+ would be enough for everyone, including businesses. Us IT admins have known that this hasn’t been the case for a while, especially considering how rare it is to get those speeds, and the reliance on the primary limiting factor (Telstra’s copper network) for the Liberal’s NBN plan effectively ensures that this will continue on for the foreseeable future.
All those points pale in comparison to the one key factor: we will need to go full fibre eventually.
The copper we have deployed in Australia has a hard upper limit to the amount of bandwidth it can carry, one that we’re already running up against today. It can be improved through remediation by installing thicker cables but that’s a pretty expensive endeavour, especially when you take into account the additional infrastructure required to support the faster speeds. Since there’s no plan to do such remediation on the scales required (either by Telstra or as part of the Liberal’s NBN plan) these current limitations will remain in place. Fibre on the other hand doesn’t suffer from the same issues with the new cables able to carry several orders of magnitude more bandwidth just with today’s technology. The cost of deploying it isn’t cheap, as we already know, but considering it will pay for itself well before it reaches the end of its useful life.
My whinging is slightly moot because I’ll probably be one of the lucky ones to have fibre being rolled out to my neighbourhood before the election but I do feel the NBN’s effectiveness will be drastically decreased if its not ubiquitous. It’s one of the few multi-term policies that will have real, tangible benefits for all Australians and messing with it will turn it from a grand project to a pointless exercise. I hope the Liberal’s policy is really just all that much hot air to placate their base because otherwise the Internet future of Australia will be incredibly dim and that’s not something that I, or any user of technology, wants for this country.