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NBN: blowout or not, leaks are an irritant for government

But they're also a two-edged sword for the ALP

Australia's shadow communications minister ALP's Jason Clare is pimping a leak of a March 2015 internal document penned by nbnTM , the entity building Australia's national broadband network (NBN) to prove another cost blowout in the rollout. But his arguments may not add up to much.

Since nbnTM has already disowned the document in public, it's impossible to verify whether the numbers were correct (although Vulture South notes that disowned leaked documents have, in the past, turned out to carry grains of truth).

The problem Vulture South has with the apparent “blowout” is that even if the document is genuine, the per-premises costs seem to be broadly in line with the August corporate plan. Which doesn't make for much of a blowout.

The document is a fragment of an "Integrated Operating Plan" (IOP), which includes a per-node copper remediation cost of AU$26,115, reckons the fibre-to-the-node per-premises cost to activation is $1,375. The August corporate plan sets the cost per premises at $2,300 – considerably more than the “blowout” figure.

Yet – again, taking the document at face value and noting nbnTM's refutation – there are other aspects of the document that suggest even at the beginning of 2015, the company was having trouble keeping up with the pace of change the government demanded.

For example, IOP 2.0 makes a substantial upwards revision in the network's operational expenditure forecasts, from $278 million to $709 million. That's because the previous IOP didn't allow for the cost of power (for the nodes), extra support, or spare parts.

The shift to the multi-technology-mix (MTM) has also made a delay in the NBN's IT systems “almost certain”, presumably because integrating the operational support systems / business support systems (OSS/BSS) is a lot more complex.

The Telstra and Optus HFC networks can probably be blamed for this: unlike the fibre-only Layer 2 model, DOCSIS cable broadband is a Layer 3 service. There's a lot to unravel to integrate the HFC into the NBN's existing IT.

Of at least as much interest as the blowout is an observation in the leaked document that Telstra hasn't been particularly cooperative in the copper transfer process, with a note stating “Telstra response required – concern re slow or lack of response raised”.

Even if the numbers in the leaked document have been superseded, the leak isn't a good look for the government or nbnTM.

The document need not be accurate or current for it to undermine confidence in the government – or, as has happened, for it to become a political football, especially coming on top of allegations last week that the $800 million Optus HFC network isn't going to cut the mustard.

And it also demonstrates that leakers remain within nbnTM. Whether that's down to one or a few individuals, or it suggests a wider malaise in corporate morale, only time will tell.

However, while it's a short-term gem for the opposition, it's a longer-term pain. The opposition Australian Labor Party has already ruled out a return to the prior FTTP model, on the sensible grounds that the NBN egg is too far scrambled.

Opposition communications spokesperson Jason Clare can carp at the leaks and the cost blowouts, but he also has to craft a credible policy to take to the 2016 election.

That's going to be hard, if all Clare can do is trumpet the failure of a policy he's committed not to significantly alter. ®

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