Since the conclusion of the 2013 federal election, nerds all over Australia have been mourning the potential loss of the crown jewels – a fibre to the premises National Broadband Network. The minister for communications, Malcom Turnbull, has responded to the latest effort from pro-FTTP advocates to change the new government’s approach to the NBN, stating that there will be a strategic review of the NBN within 60 days, which will outline the approach the NBN will take from then on, but don’t expect any big changes from the Liberal party’s policy. With that announcement as the latest milestone of Australian broadband, I thought it would be interesting to see how we arrived at this point, to give some context to the issue.
The very first time “broadband” appeared in parliment was in 1964 by MP Alan Hulme. He was explaining how the Brisbane-Cairns broadband microwave link (used for phone calls) was set up by private contractors, not by the government. But it wasn’t until September 1994, when Senator Tierney gave a speech in the senate about the “information superhighway” and called on Australia to rapidly adopt this technology.
“What we have evolving in this country—unfortunately, like many other industries—is a massive duopoly that not only controls the means of communication but also has enormous control over the products that travel on that communications network. With the concerns with monopoly power and duopoly power that we have always had in this country, a new era is developing, and the government is just sitting on its hands and letting it develop. It does not have a regulatory framework for this and, indeed, it does not really have a policy to counter this.”
The Senator even discussed a worry that if broadband isn’t created on an open playing field, monopolies will occur to the detriment of Australia’s economy. It is the first time a politician stated on the record that broadband will shape our country and is something we should invest in and support.
Also in 1994, the Broadband Services Expert Group was established. They were tasked with investigating the opportunities and challenges relating to the Internet in Australia at the time, and how Australia can better prepare and plan for an increasingly digital future. The report, “Networking Australia’s Future” was released in 1995 and despite almost 20 years of technology change, it’s still an interesting read. My favourite part of the report is the first section titled, “the communications society”, because even 20 years ago, it was visible as to how the Internet would change our lives.
“The Group believes that, rather than seeing the communications network as a system that connects us to phones, televisions and computers, we should see it as a platform underpinning our society, supporting a diverse and interwoven range of social, business and community activity.”
Networking Australia’s Future is quite prescient and hard to read without a little twinge of regret as to what could have been for Australia. The forming of the BSEG and the Networking Australia’s Future report was really the first time the government gave broadband and the Internet proper attention.
Then Prime Minister, Paul Keating gave a speech when launching the report, which was very enthusiastic and forward-thinking of the potential of the Internet and technology. This quote from that speech will hit home in the hearts of many who grasp the importance of the Internet:
“We have to decide, as from now, that access to the national information infrastructure will be no less a general right than access to water, or public transport or electricity.”
Let’s put that into perspective — in March 1995, we had the Prime Minister of Australia saying that the Internet is as important to society as water and electricity. In 2013, we have a Prime Minister saying, “Do we really want to invest $50 billion of hard earned taxpayers money in what is essentially a video entertainment system?”
Networking the Nation
The earliest traces of federal government putting serious money where their mouth is in regards to broadband was the Networking the Nation fund, which began in 1997 via some of the money received from the privatisation of Telstra. Between 1997 and 2004, $322.5 million was distributed to 762 projects across predominately rural Australia. A list of all the projects funded are on the archived DCITA website, but in Victoria at least, dozens of “e-cafes” were set up in regional towns, many community based ISPs were funded, community based training groups sprung up and a few councils used it to expand CDMA phone coverage. The biggest chunk of funding was used by each state government to start state & local government e-portals, to provide online services.
1999 saw the release of a National Bandwidth Enquiry report and a Telecommunications Service Inquiry report appeared in September 2000. The government didn’t do much with this information, but large swathes of funding was soon to appear, via two reports published in 2002 and 2003 – the Connecting Regional Australia report, part of an inquiry into the status of telecommunications in regional Australia and the Broadband Advisory Group’s report into various states of broadband connectivity in Australia. These two documents lay the foundation for future broadband related expenditure in the Howard era until late 2006/early 2007.
Not long after those nascient reports, a National Broadband Strategy was formed in early 2004, together with the state governments (except Victoria, hah). The main purpose of this strategy was to have a document that explained what broadband is, why it’s important and what Australia wants to do with it. The most interesting thing in the strategy is the vision for how Australia should approach broadband Internet:
“Australia will be a world leader in the availability and effective use of broadband, to deliver enhanced outcomes in health, education, community, commerce, and government and to capture the economic and social benefits of broadband connectivity“
Australia, a world leader! How aspirational!
In the 2003-2004 financial year, the government responded to the Connecting Regional Australia report, with funding of approximately $170m. The main portion of that going towards the High Bandwidth Incentive Schcme (HiBIS) – which essentially gave money to ISPs to price services in certain rural areas equivalent as to what is available in the metro areas. This brochure explains how it worked.
In 2005, the largest piece of funding for broadband yet, arrived via the Connect Australia package. It was $1.1bn, predominately to bring those with no internet or poor internet (blackspots in metro areas, regional areas) up to scratch. The vast majority of the package was for a program called Broadband Connect, which was to provide $878m over 4 years, to (once again) improve Internet access in regional areas. A smaller project, Metropolitan Broadband Connect, funded to the tune of $50m, never really went anywhere. The crux of Broadband Connect was to give ISPs a subsidy for the high cost of connecting rural customers. It basically expanded HiBIS to more areas. Broadband Connect consumed approximately $270m of the $1.1bn of funding allocated to it, until it was phased out in 2007 and replaced by the Australian Broadband Guarantee – again, cash incentives for ISPs to provide a minimum 512k service in a rural area. The Australian Broadband Guarantee was kept around until June 2011.
The next major report into Australian broadband was the Broadband Blueprint, released in 2006. This blueprint, despite over 6 years old and noting that some of the technical things are slightly obsolete (3G was new and broadband over powerlines never really happened) is still reflective of the general state of broadband in Australia. It details how many people are using broadband and that the growth of Internet services is increasing and so on. Generally, the Internet is still very important and serious business. Something we’ve known since 1994.
Where the blueprint gets interesting are the pages discussing broadband speeds and rolling out fibre across the country (pg 30 & 31). The blueprint is quite proud of the fact that 90% of Australians can already access broadband with speeds between 2 and 8 Mbps. It also discusses the then government’s view of fibre, which summarised, is basically “too expensive”. The last paragraph of the discussion notes that Telstra was disucssing with the ACCC about building an FTTN network in capital cities and a “group of nine” telcos (which were AAPT, Internode, iiNet, Macquarie Telecom, Optus, Powertel, Primus, Soul and TransACT) were also detailing the build of an FTTN network (which if you’re interested, can be found in this PDF). Overall, the blueprint is quite positive about Australia’s broadband situation at the time, despite the group of nine telco’s similarly aged & detailed report stating that Australian access to broadband is sub-par.
Where the blueprint leads to next was the creation of Australia Connected, in June 2007 – the basis for the now infamous $1bn of funding for OPEL, a joint venture between Optus and Elders – to bring widespread, faster internet to rural Australia. $600m of funding came from the earlier $1.1bn Connect Australia package, with an extra $358m supplied to further extend the range of the OPEL network. Australia Connected also aimed to assist in a regulatory way to commence a privately built fibre broadband network in capital cities and regional centers, from either Telstra, or a Group of 9 consortium.
Up to this point, the past 15 years of federal funding has been dominated by improving access in rural and regional areas. Metropolitan network access was left to the market (aka Telstra) to take care of as they saw fit. Then the 2007 election happened and a change of government took place. Out with the Libs, in with Labor. They even renamed the department, dubbing it, The Department of Broadband, Communications and the Digital Economy. Before this, the Department of Communications, Information Technology and the Arts was responsible for broadband and internet access related issues. Arts was split off to the Department of Regional Australia, Local Government, Arts and Sport, leaving the new DBCDE to concentrate on the Internet and other communications related things.
For the first time, there was a minister directly responsible for broadband.
The new change in leadership also axed the OPEL plan, stating in the 2007-2008 DBCDE annual report that:
“The implementation plan submitted by OPEL Networks failed to demonstrate that it would meet the terms of the funding agreement. In particular, the plan did not achieve the required service coverage. As a result, on 2 April 2008, the Government announced that the OPEL Networks broadband project would not proceed.”
National Broadband: Take 1
The first stab at a national broadband network, with equal access for metro and rural Australia, kicked off on April 11th, 2008. A request for proposals was put up by the new DBCDE administration to build a nationwide fibre to the node or fibre to the premises network. Section 1.3 of the RFP outlines the requirements of the network – with requirements of note being 12 Mbps minimum, five year rollout and uniform pricing across the nation. The government would supply $4.7bn of funding and tweak any laws or regulations to suit the winning proposal. The proposals will be judged by a “panel of experts“, who on the 22nd of Jan 2009, submitted this report to the government.
To be blunt – it was a flop. Unfortunately, we do not know the specifics of the RFP evaluation, as that is all removed from this PDF (over 150 pages are missing), but the executive summary gives us some hints:
- Due to the GFC, there were not as many, or not as ambitious proposals submitted.
- None of the proposals had a business case that supported a 5 year roll out to 98% of Australia
- Rolling out an FTTN network has no efficient upgrade path to FTTP, putting into doubt the appropriateness of building an FTTN network
- An FTTN network is heavily reliant on Telstra and compensating Telstra for the use of the “last mile”. None of the proposals were keen on this.
National Broadband: Take 2
The evaluation report did give the government advice on how to achieve the outcomes the government wants, but it was kept secret. Three months after submitting this report to the government, on April 7th 2009, the NBN as we now know it was announced via this press release and this press conference (transcript of press conference):
This announcement set the course of government broadband action between 2009 and 2013 – that course being to build a $43bn, full blown fibre to the premises network, covering all over Australia. It’s still unclear as to the rationale the government used to go from investing approximately $4.7bn to build a broadband nework, to $43bn. There doesn’t seem to be any detail beyond the panel of experts telling the government to do so, and that information given to the government is still unpublished.
On the same day as the FTTP NBN announcement, some significant discussions surrounding regulatory reforms regarding the NBN and in particular Telstra’s role within it were launched. A paper asking for subsmissions was presented and dozens of submissions were given. Always of interest is Internode/Agile’s submissions, as they’re quite frank and easy to read.
On May 6th, 2010, the next milestone in the NBN arrived, with an implementation study released. This 500 page document outlines how exactly, the government can meet its policy aims with broadband. It’s a fascinating read and I suggest taking a look at the executive summary at least, as it explains the facts as to what the government had actually planned to do – without any colour from politicians or commentators. This document was the guide for the actions NBN Co took in further designing and implementing the network as it stands today.
It was around this time that the opposition begun to pay attention to the NBN and started on their alternative to it. The major debate of the then government’s broadband policy begun the day after it was announced that $47bn would be spent on it. Here is Malcom Turnbull–then leader of the Liberal party–on Sky News giving an interview on the 8th of April 2009, regarding the new NBN announcement:
As you can see–from day one–the $47bn cost of the NBN is what rankled the opposition most.
Whilst in opposition, the Liberal party has had three shadow ministers for broadband.
- Bruce Billson: Nov 2007 – Sept 2008
- Nick Minchin: Sep 2008 – Nov 2009
- Malcolm Turnbull: Nov 2009 – Sep 2013
Whilst Bruce Billson was the broadband spokesperson, the $4.7bn version of the NBN wasn’t really a big issue. Most of the commentary from him focussed on the slowness of picking someone to build the network, rather than the cost. None of the media releases on his website during the time he was broadband spokesperson mentions broadband at all. When Malcom Turnbull became leader of opposition, Nick Minchin was responsible for broadband and while quite active in campaigning against the Internet filter, which was also run up the flag pole around the same time as the NBN. But on the topic of broadband, didn’t have much to say. In an interview with ARN in October 2009, the Liberal party didn’t have a policy on broadband:
“Inevitably when you’re in opposition, your policy needs to be set according to the state of affairs that you find when you go to the election and I’m not in a position to give you the Coalition’s policy now. I certainly think there are better and more cost-effective ways to seek to deliver improved broadband services than setting up a new Government company and buying $43 billion and trying to roll out FTTH networks under Government auspices.”
On the 21st of August, 2010, there was another federal election. This time the Labor party took the new $43bn NBN policy to the election and the Liberal party published their ideas for broadband, for the first time since 2006. The Liberal party policy had a few main features:
- A national broadband commission, a body to select the private sector businesses to deploy broadband networks.
- A national broadband database, a service to provide high quality information on the availability of broadband in premises across Australia.
- A program to identity where Internet is substandard.
- $2bn for fixed wireless in rural Australia.
- $700m for satellite internet for extreme rural areas.
- $2.75bn of funding for more backhaul.
- ACCC regulation of broadband pricing.
- Look at a various ways to move to fibre based Internet and to review if fibre should be installed in greenfields areas.
This policy is very much a continuation of the 2006-era ideas from the Connect Australia package.
Ultimately, Labor won the 2010 election by forming a minority government and the NBN continued on in FTTP form, as per the implementation study.
During this time, Malcolm Turnbull became spokesperson for broadband and things kicked up a notch. To get an overview of Malcom Turnbull’s stance on broadband, his YouTube channel and website have copious transcripts and interviews and speeches. But between the 2010 election and April 2013, the Liberal party didn’t have a formal broadband policy. Just statements from Malcom Turnbull. Nothing written down that the community could scrutinise and judge. In April, the Liberal party finally announced their broadband policy in the lead up to the 2013 federal election, which they won and formed government. Here’s a video of the press conference, but I also suggest reading the Liberal party policy, as this document lays the groundwork for what will happen next with the NBN.
The policy is actually a rapid shift from the one put forward in 2010. The crux of the Liberal policy is that whilst fast speeds are important, there is no evidence that customers will actually pay for it–even if it was available–to justify the cost of rolling out such a network. Why spend all this money on something people arguably won’t use?
Some concepts are carried over from the Labor NBN, such as greenfield developments installing fibre only during their construction, fixed wireless and satellite coverage will continue as planned and the 121 points of interconnect remain. But other concepts, such as using FTTN instead of FTTP are significant changes, which alter the network design. The planned cost and time frame are different (cheaper and sooner) than Labor’s, as are the resulting speeds – with 25 megabits per second the new minimum speed across Australia, and 50 megabits to 90% of Australia by 2019. The ability to upgrade to FTTP is highlighted in the policy, but details are not given as to the cost or time-frame. There is the ability for other organisations (local councils, utility providers, etc.) to receive co-funding from the NBN to build fibre networks.
National Broadband: Take 3
The next step for the NBN is the release of various reports by the end of 2013:
- NBN Co strategic review, to get a picture of where the NBN is now and where it is heading.
- Independent audit of broadband policy and NBN Co governance under the Labor party.
- Cost benefit analysis and a review of broadband regulation.
- A ranking of broadband quality and availability across Australia, to assist in deciding priority of the NBN rollout.
Since 1994, the federal government has known that the Internet is a vital part of our society. Unfortunately, it wasn’t until 2009 that the government took it seriously and gave it the serious funding it deserved. There are many political ideologies in play when assessing the need to fund such infrastructure – the 1996-2007 government believed that Telstra were the ones best suited to take care of broadband in the country, with the government playing a supporting role for the gaps Telstra can’t fill in. From 2007 to 2013, the government tried to assist private businesses to build the infrastructure for solid broadband, but ultimately took the decision into their own hands. They determined that the Internet was important enough that if private enterprise won’t do it, the government should–to the tune of $47bn. Now, the current government is continuing that same train of thought, investing $29.5bn, over 15 times what was being invested in 2006, to build a broadband network too.
It will be an interesting 3 years of debate regarding the status of broadband in this country and hopefully, this history lesson shows how we got there, so that we are not doomed to repeat the same mistakes made over the past 20 years.