Sometime between now and the election the Coalition will need to dump its plan to stop the NBN rollout and replace it with a fibre to the node network.
To implement that policy the new Communications Minister, presumably Malcolm Turnbull, would have to negotiate a new deal with Telstra to buy or lease its copper wires.
Imagine trying to negotiate that deal having made an unbreakable election promise that you would.
Turnbull and his public service negotiators would be greeted by the frightening sight of broad, happy smiles on the other side of the table, as David Thodey and Team Telstra gleefully prepared to screw them. An expensive, drawn out debacle would ensue.
Replacing the NBN with a FTTN network would mean tearing up the existing $11 billion deal between NBN Co and Telstra, under which Telstra is paid to migrate customers from its copper to the NBN, and replacing it with a new one in which Telstra rents or sells its copper to the government, to get the broadband signals from the nodes to the premises.
Remember that one of the key reasons the government decided on a fibre to the premise network was advice that a FTTN would require compensation to Telstra of more than $20 billion. If the Coalition commits itself via an election promise to do that deal, then that would look like a bargain.
Also the NBN will be simply too far advanced: too many homes and businesses – about a million – will be connected to a FTTP, so that a change of tack to a cheaper FTTN network would either set up a two-tier internet access regime in Australia – some with fibre, some with copper – or require a massively expensive and pointless switch-over of a million homes from fibre back to copper. Debacle.
What’s more, FTTN would require cabinets the size of big wardrobes on nature strips; NBN Co is already having enough trouble getting neighbourhood and planning approval for its small knee-high pillars. Erecting wardrobes on a whole lot of peoples’ nature strips would be another debacle.
And the final problem is that the NBN is a mechanism for subsidising regional and rural broadband, since fibre will go to 93% of all Australian homes and the rest will get fast wireless, and country towns will pay the same price as the city.
Is the Liberal National Party really going to end that subsidy and tell country towns that their fibre can’t be afforded and they have to stay with copper? Or even worse, is it going to expose to true cost of it to the rest of us? I don’t think so.
Don’t do it Malcolm. More importantly, don’t go into an election having promised to do it – you will soon find yourself in quicksand and eventually go down as the worst Communications Minister ever.
Announce, grumpily, that the NBN will be too far advanced to stop and that the Coalition will simply work to ensure that the project is delivered on time and on budget. And then get on board the fibre broadbandwagon.
Follow @AlanKohler on Twitter. This article first appeared on Business Spectator.
Alan is the founder of The Constant Investor.
