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Turnbull storms Paris with NBN’s doom

Killing the Australian network at long distance

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In the midst of a blitzkrieg tour through Germany, Paris and the UK seeking tête-à-tête meetings with some of Europe’s leading telco brains trust including Ofcom, Australia’s shadow communications Minister Malcolm Turnbull delivered a typically caustic attack on Australia’s NBN project to a packed Broadband World Forum in Paris, yesterday.

Leaving no doubt in the minds of the international telco elite that Australia was building “the most expensive, most anti-competitive broadband network in the world,” Turnbull provided a dire flipside to the keynote delivered in the same spot a year ago by NBN Co chief Mike Quigley.

Sandwiched between fellow session speakers Google’s GM Access Ken Lo – advocating the ‘build it and they will come’ business model for Google’s foray into gigabit fibre deployment in Kansas – and BitTorrent CEO Eric Klinker, Turnbull provided a wry spray on state owned infrastructure project.

Quipping that he had yet to visit Pyongyang but imagined that “our approach would be viewed very favourably,” the shadow minister depicted a bleak picture of the future of competitive Australian fixed telecommunications.

“It is very uncomfortable, as an Australian, to sit with telecoms executives and officials in China and be told that the NBN approach would not find favour in their country because ‘in China we are seeking to promote competition in telecommunications infrastructure,’” he said.

Arguing that the NBN had effectively provided the death blow to facilities-based competition he warned the global audience, “clearly starry-eyed politicians and staggeringly expensive technology are a dangerous mix. The current Australian government’s approach to NBN shows that a blind pursuit of superfast broadband at any cost can lead you to some very anomalous policy outcomes.”

Reviving the issue if FTTH vs FTTN, Turbull said that this would be a key issue for a new Liberal government. “The best estimates in Australia have been that FTTH will cost, in brownfield areas, between three and four times as much as a FTTN deployment,” he said. He added that a revised broadband policy should ensure that not only is there ubiquitous access to broadband but at an affordable price.

“I regret to say that Australia’s NBN offers no prospect of cheaper access to broadband. As a heavily capitalised, Government owned monopoly the NBN has both the incentive and the means to charge high prices,” he said.

He added in Q&A that “you can’t suspend the laws of economics, if you have a monopoly-particularly if it belongs to the government and its over capitilised- that is not going to lead to cheaper prices.”

He added, “if it doesn’t get high revenues it is the auditors job to force the government to take a haircut and that will go through to the budget. Every element of it is about higher prices.”

Contextualising the Australian government’s perceived faux pas he said that as the cost of the NBN is substantially more than Telstra’s valuation, the government could have effectively bought all of Telstra back and had a national wireless network a few more assets in there as well.”

Turnbull said, that in the absence of reversing the project, his mandate was to achieve an outcome “where facilities based competition is restored and enabled, not prohibited and where the provision of network services is undertaken by the private sector, not the government. Our approach will be technology agnostic.” ®

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