rudd roasts conroy over nbn report

From The Australian - the leaks have really commenced now - There are suggestions the government may be too embarrassed to release the report because it will be found to be "shallow", throwing up more questions than answers, with engineering considerations, for example, outweighing the critical issues of economic viability.

Rudd roasts Conroy over the national broadband report Malcolm Colless From: The Australian March 22, 2010 Rudd is believed to have told Communications Minister Stephen Conroy to come up with a strategy within two weeks to take the heat out of the political crisis building up around the government's $43 billion national broadband project.
Canberra sources said the directive followed a "difficult" meeting between Rudd and Conroy after the Prime Minister was shown a copy of the controversial $25 million implementation study into the development of the national broadband network.

Conroy has dismissed Senate demands to table the 500-page report prepared by KPMG and McKinsey & Co, arguing that he intends to discuss its findings with cabinet colleagues first.

There are suggestions the government, which is tipping hundreds of millions of dollars into this project, particularly in Tasmania, may be too embarrassed to release the report because it will be found to be "shallow", throwing up more questions than answers, with engineering considerations, for example, outweighing the critical issues of economic viability.

Start of sidebar. Skip to end of sidebar.
.End of sidebar. Return to start of sidebar.
This raises questions about the degree to which the government wanted the study to reinforce its political battle against Telstra ahead of addressing key operational issues confronting the NBN project. The study is understood to claim Telstra's involvement is not only non-essential to the success of the NBN, but that savings resulting from carving it out could bring the overall cost down to around $30bn.

While this may provide political comfort for the government, how does it sit with the fact that the NBN is the biggest and most complex civil engineering project in Australia's history? There is already an inescapable impression emerging that NBN Co -- the project's operating body -- is punching above its weight. Proceeding in the absence of some deal with Telstra to, at the very least, take advantage of its communication network management experience, would reinforce this conclusion.

But NBN Co and the government seem to be unfazed by this prospect. "I don't think the general public realise how much the government dislikes Telstra," one communications industry executive told The Australian.

Conroy last week introduced legislation into the Senate requiring all new homes to be fibre-ready for "superfast broadband". Under this "fibre in greenfields policy" all developments in Australia that receive planning approval from July 1 this year will have to include capacity for high-speed cabling. The government is expected to seek the co-operation of the states and territories but has made it clear that in the end it is prepared to go it alone to roll the cable out to 90 per cent of homes, schools and businesses around the country.

Conroy's Fibre Deployment Bill estimates that, on the basis of 189,000 new homes, schools and businesses being built each year along the proposed fibre cable grid, the overall additional development cost would be up to $570m a year. The bill's explanatory memorandum acknowledges that this increased cost will be passed on to the purchaser but says this should be outweighed by increases in property values.

This is yet to be tested but may well be seen by many potential new home owners as an unwarranted cost burden in what is an already punishing home buying market for something they can live without. But the bill's explanatory memorandum trumpets the upside of this increased cost, claiming that the superfast broadband will create new opportunities for communication within social groups and families as well as reducing energy consumption and greenhouse gas emissions by encouraging less travel through videoconferencing and teleworking. This sounds more like anti-social socialism.

This highly complex bill is an enforcement regime that outlaws copper in favour of fibre-optic cable and provides penalties for developers who don't comply.

It says that without this structure, developers may chose the "cheaper, less capable copper option instead of the fibre-to-the-premises, contrary to the interests of the first owners and subsequent purchasers" of these premises.

All this does is pose more questions and raise more doubts about how this mandatory rollout is going to proceed with any degree of efficiency, because the future of the whole project is predicated on maximum take-up.

In a nutshell, it already has a ring of the home insulation fiasco about it.

The NBN cable rollout program to existing homes will trigger a massive internal rewiring program, the cost of which will be borne by the home owner.

And this is on top of the $1000 broadband set-top box that needs to be installed where the cable enters the home and only has a shelf life of three to four years before having to be upgraded.

Meanwhile, NBN Co is still mulling over whether to use existing satellite services or acquire two new satellites to service the 10 per cent of the country not covered by the cable rollout itself.

Although primarily for the delivery of broadband, it says it wants the capability to deliver broadcast IPTV across three Australian time zones.

The total cost of buying, launching and operating two Ka Band satellites will exceed $1bn and involve running costs of more than $2m a year. Rudd may find that he has hung his coat on to a falling star rather than a shooting star.