Friday, September 06, 2013

Coalition NBN fantasy land

The Coalition's commentary on broadband in this election campaign has been one giant fantasy land.
It has been led by the following false claims about Labor’s policy:

Claim: Labor’s NBN will cost taxpayers upwards of a $100 billion.[1]
Fact: Government equity for Labor’s NBN is $30.4 billion.  This is an investment that will generate a 7% return.[2] The Coalition plans to invest just 3% less for a network that can only guarantee one fourtieth the speed.
A full analysis of how the Coalition concocted this number and why it is wrong can be found here.

Claim: Labor’s NBN is going to result in a dramatic increase in broadband prices.[3]
Fact: Broadband plans available on the NBN are already available at comparable prices to existing plans for a better service. Wholesale prices will decrease in real and nominal terms. Average Revenue Per User will grow as consumers choose higher speed plans and use more data, but will not increase as a percentage of household wallets.

Claim: That if NBN Co was a listed company and hadn’t released its Corporate Plan the ASX would suspend it.
Fact: There is no requirement for companies to publish their corporate plan, there isn’t even a requirement for Government Business Enterprises to publish their Corporate Plans. The release of the annual Corporate Plan of NBN Co is part of the unprecedented level of transparency on this project. 

Claim: That NBN Co claim to have passed premises which they cannot connect.[4]
Fact: As NBN Co states the premises referred to can connect but require different processes. Specifically that includes the need to agree with a Body Corporate on the way to cable the specific building.

They have also made the following false claims about their own policy.

Claim: The Coalition will acquire ownership of the last mile copper, for no additional payment.[5]
Fact: In May 2011 Mr Turnbull berated the Government’s deal with Telstra saying “the inability of future governments to make use of parts of the copper network was a disastrous oversight that could potentially deliver billions of additional dollars to Telstra at the expense of taxpayers.”[6] Telstra has not backed this assertion. 

Claim: That the Coalition has built the cost of remediating copper and quite a bit of contingency into determining a $900 cost per premise for fibre to the node.[7]
Fact: Mr Turnbull invented a $3600 cost per premise for fibre to the premise and then claimed that on the basis of overseas examples his fibre to the node would cost 25% of that. There is no analysis of actual costs and not even a specification of how many nodes and what the actual fibre lop lengths will be.

Claim:  All contracts will be honoured.[8]
Fact: The Coalition policy says “The Coalition reserves the right to review and seek to vary any of those contracts in the light of the Coalition’s broadband policy.”[9]  There are 200,000 premises already passed and a further 1 million for which contractors are already at work; but Mr Turnbull’s policy only provides for completing 565,000 premises under Labor’s structure.[10] This is not consistent with the claim that contracts will be honoured.

Claim: More people will get fixed line broadband, and at higher speeds and less cost under the Coalition policy.[11]
Fact: The Coalition policy specifies that the same approach to fixed wireless and satellite will be taken as Labor.  There is no difference in the forecast premises to be addressed by fixed lines in either policy.

Claim: That the Coalition policy contained a detailed business plan.[12]
Fact: The Coalition policy document contained two pages of data on how their policy was costed - most of which didn't reconcile with other statements.  For example, ARPU grew at 9% not the 6% claimed. The CapEx and OpEx numbers were only provided to 2019 and did not reconcile with totals claimed to 2021.

[1] Sky News 23 August 2013
[2] NBN Co Corporate Plan 2012-15, and reconfirmed at Joint Committee on the NBN 19 April 2013
[3] Sky News 23 August 2013
[4] Malcolm Turnbull interviewed by Alan Jones 28 August 2013
[5] Sky News 23 August 2013
[7] Malcolm Turnbull interviewed by Tom Tilley on Triple-Js’ Hack 22 August 2013
[8] Malcolm Turnbull interviewed by Tom Tilley on Triple-Js’ Hack 22 August 2013
[9] Coalition policy page 12. 
[10] Coalition policy – background paper Page 31.
[11] Malcolm Turnbull interviewed on ABC South East NSW Mornings 5 August 2013
[12] Malcolm Turnbull interviewed by Tom Tilley on Triple-Js’ Hack 5 September2013

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