Given his tasking by opposition leader Tony Abbott to “demolish the NBN“, it should come as no surprise that Malcolm Turnbull is one of the largest sources of mistruth and FUD relating to the network. So much so, that he has now earned a dedicated page on this blog.
There are a number of myths Malcolm has presented in relation to the “need for speed”. In 2010 he infamously announced that “12Mbps is enough for any application”, which quickly drew ridicule from assorted commentators.
More recently, Malcolm was caught out fudging the figures on the takeup of 100Mbps services in Korea. He posted a blog entry claiming that Korea had lost its appetite for 100Mbps and that subscribers had declined by some 70,000. He used this information as a source of FUD against our NBN, claiming it demonstrated there would be no desire for the NBN’s superfast speeds in Australia. It didn’t take long before the truth came out though, when The Register revealed that far from declining, the total market for 100Mbps connections in Korea grew by an impressive 850,000 connections (14%) over the preceding 12 months. Turns out Turnbull had based his blog on the data from a single carrier, which had simply lost 100Mbps customers to its competitors. Further evidence came from the USA, where data showed 100Mbps connections grew 144% between 2010 to 2011, following an incredible increase of 868% between 2009 and 2010.
The next great fallacy that turnbull constantly promotes -iPad in hand- is that the internet is “going wireless”.
The worst part about this one is that he knows it’s not true that mobile broadband is replacing fixed broadband, or that there is any prospect of it doing so. In an apparent attempt to take advantage of the general misunderstanding between WiFi and cellular mobile broadband, Turnbull regularly makes statements such as “the future of the internet is undoubtedly wireless”, the clear implication being mobile broadband. He only only admits that most “wireless” data is actually provided over fixed-networks (ie: WiFi) when pushed on the subject. The entire point of this line then, is to capitalise on the lack of technical knowledge and encourage the misinformation being propagated by some in the media that mobile broadband (AKA 3G, 4G etc) is a plausible replacement for fixed networks, despite the physical impossibility and the horrendous costs. The NBN will allow WiFi networks to boom, and deliver far greater “wireless” speeds than those currently available via the copper network.
The latest figures from the Australian Bureau of Statistics show that total monthly data downloads over ADSL and Cable networks in Australia grew by an enormous 61,000 Terabytes (TB) between December 2009 and December 2010, to a total of over 174,000TB. Over that same period, downloads over mobile broadband only grew 2,000TB to a total of 16,000TB. The same statistics showed that the number of ADSL connections in Australia grew by 300,000 over the 12 month period, even though only 160,000 new premises were constructed. Australians are certainly adding mobile broadband connections at a rapid rate, but they are not coming at the expense of fixed line connections.
Perhaps the most damning evidence against Turnbull’s wireless FUD, given his iPad attachment, is the recent revelation that almost 92% of data downloaded to iPads comes via WiFi over the fixed network, not via mobile broadband. In other words, 92% of iPad data would come via the NBN. I’ll bet you won’t hear him admit that in a press conference!
Fibre To The Node
Out of the blue, in June 2011, Malcolm began promoting a Fibre To The Node network in lieu of the NBN. I’ve already dealt with FTTN in detail here, so I’ll concentrate on the biggest myths surrounding his FTTN proposals:
Speed. After telling us last year that 12Mbps was enough, all of a sudden Malcolm declared that 60Mbps was not only enough, but also possible with FTTN. However, if we look at historic internet speeds, it’s quite clear that even 60Mbps won’t last very long:
Cost. Malcolm’s second big myth surrounding FTTN is that it’s a cheaper option. In fact, he claims it’s more than 50% cheaper than the NBN. As evidence, he’s regularly cited a 2007 Alcatel-Lucent report entitled Deploying Fibre to the Most Economic Point. While the report does indeed claim that a 25Mbps FTTN network deployed to existing premises could be half the price of a 75Mbps FTTP, it assumes that the FTTN network would be rolled out by the incumbent carrier. ie, the owner of the existing copper network. In Australia’s case, that means Telstra. Since Telstra refused to roll out such a wholesale-only network in 2007, the cost to “cut in” to their last mile of copper (required for FTTN) would be another $15-20bn, according to former Telstra executive Phil Burgess.
On top of this, even Alcatel-Lucent (the authors of the report Malcolm references) expect FTTN to have a limited life and likely require replacement with Fibre To The Premises (FTTP) within 15-20 years. So having spent $15bn on FTTN, plus another $15-20bn paying out Telstra, Australia would need to spend another $30bn in 15-20 years to replace the network again. So much for the cost saving myth.
Monopoly/taking telecommunications reform backwards
Another of Malcom’s oft-quoted myths is that the NBN is a “great big new monopoly”, set to turn back the clock on decades of communications reform.
Let’s get something absolutely clear: The NBN is nothing like the vertical monopoly that currently exists in Australian telecommunications. Right now (with very few exceptions), Australia’s fixed line telecommunications are provided by the Telstra monopoly network. And not only do they have a near-monopoly on the network itself, they also offer retail services over that network. This situation is known as a vertical monopoly, and is the worst possible outcome for consumers and competition. This is because Telstra’s retail competitors must buy access to Telstra’s own network. This puts Telstra in an immensely powerful position, where they can sell wholesale access to their competitors while protecting the income from their retail division.
While the NBN will be a near-monopoly of fixed line infrastructure, it will not be a vertical monopoly. NBN Co will not have a retail business and must sell wholesale access to every retailer under the same terms, at the same pricing, overseen by the ACCC. As part of the NBN supporting legislation, the vertical monopoly of Telstra is broken, finally delivering the telecommunications reform that should have been done before Telstra was sold.