PM Agenda with David Speers
29 September 2016
E & OE
Returning to our political guest this afternoon, he is the Communications Minister Mitch Fifield, because we’ve had some interesting developments in relation to the National Broadband Network that I want to talk about.
Minister, thank you for your time this afternoon, for waiting with us while we got that update from South Australia.
Now in November in last year as you know, we had various leaked documents showing that the Optus HFC Network that was bought by the nbn for 800 million dollars. The documents suggested that it was in such poor condition that the nbn was considering replacing it entirely. Now you said at the time, you played it down, you said:
“The nbn will be using both Telstra and Optus HFC networks”
Yesterday the nbn announced that it’s actually going to be replacing the Optus HFC network entirely, so what’s gone on?
David I guess the place to start is actually 2011 when Labor were in office. They signed 800 million dollars to Optus for them to actually shut down their network. They entered a similar agreement for 9 billion dollars with Telstra to shut down their network.
When Malcolm Turnbull became the Communications Minister, he negotiated in 2014, for not one extra dollar, to gain access to both the Optus HFC network and the Telstra HFC network to give nbn a technology option to use HFC if that made good business sense.
And the way things have played out is that we’ll be using about two and half million Telstra HFC premises, using that network to access two and half million premises.
Optus we’ll be using the HFC network in the Redcliffe area in Brisbane for HFC but otherwise, what nbn has decided, because it makes good business sense, is to use another technological approach in 400,000 premises which are in the Optus footprint, which is known as Fibre to the Distribution Point. And in addition to that they is about another 300 000 premises which were slated for Fibre to the Node which will get Fibre to the Distribution Point.
So what this is…
And I want to get to those new technologies, but I just want to, if we can, look at what’s gone on here with this HFC network because as I say nearly 12 months ago we had these leaked documents showing that it was a dud. And that the nbn were so worried about that, they called in the Federal Police, we had raids of people’s premises, we had raids here at Parliament House, not so long ago.
But clearly whoever leaked the documents was on to something, and that was nearly 12 months ago.
nbn, as a good business are constantly doing scenario planning, so that they can look at different eventualities.
When in 2014 nbn was looking at the Optus HFC Network as a potential means of deploying the nbn, what’s known as Fibre to the Distribution Point technology wasn’t advanced. It’s come a long way since then, so that it now makes sense to use Fibre to the Distribution Point.
But I’ve got to emphasise again David that it was the Labor Government that paid 800 million dollars to Optus. Not the Coalition. The Labor Government. And they paid that money to shut down the HFC network.
And what we did in government was say, look we’re not going….
You guys were the ones who enthusiastically embraced using this technology. You said yourself that accessing HFC infrastructure is one of the main reasons why Coalition Government is going to be in a position to rollout the nbn much, much faster than Labor.
Well that hasn’t turned out to be right.
No David it remains the case because we will be utilising the Telstra HFC network to provide the nbn to the best part of two and half million premises. So it’s still going to be a very big part of the nbn rollout.
What we did in 2014 was, without paying an extra dollar, secured the Telstra HFC network and the Optus HFC network as options should that make sense to do so. And it has made sense to do so with the Telstra HFC Network. We’ve got a better option with Fibre to the Distribution Point in parts of Australia. This is the essence of the multi technology mix mandate that we have given the nbn. Labor took a theological approach. If there was any deviation from the one true path of fibre to everywhere, then for Labor that was heresy.
What Labor are seeking to do, is to apply the theological template to our rollout. Now the whole basis of our rollout is use the technology that makes sense. If along the track it makes sense to do something different in order to see the nbn rolled out fastest and at lowest cost, then that’s what nbn should do. And this is exactly what nbn is doing.
Nearly 12 months ago on that track it was obviously pretty clear that there was a problem here. Why has it taken this long for this decision?
David, the Fibre to the Distribution Point technology is something that nbn has been trialling. It’s something that they have been developing. It was showing promise and Bill Morrow was up front at many an Estimates hearing over the past year, saying that Fibre to the Distribution Point is a technology that is getting better and better.
Which is great, and I want to talk about that, but I’m talking here about the Optus HFC. 12 months ago, not fully fit for purpose, the leaked document said. It was pretty clear back then.
David, neither the Telstra HFC network, nor the Optus HFC network were ever going to be in a position to be deployed without additional work. There’s additional work that is being done to make sure that the Telstra HFC network can be used.
But it’s a bit more than that, with respect, the document showed it was not fully fit for purpose, that it was near the end of its lifetime and yet it’s taken 12 months for finally the nbn company to say OK, we’re not going to use it.
David I know documents that come out in an unauthorised fashion are salacious. I know that people get excited. But the fact is, nbn does a range of scenario planning and you can randomly pluck any document out from nbn and what you….
But this isn’t a scenario planning. This is black and white saying that it was a dud. And this was in November last year.
Part of nbn’s scenario planning David, is to constantly look at other technology options, and if there is another technology option that makes more sense that can see the nbn rolled out at lowest cost. Then that’s what nbn does.
I’m completely relaxed about this. nbn’s mandate is to use the technology that makes sense. We’re still using a massive amount of HFC cable network in Australia as I say about two and half million premises will get nbn, by the Telstra HFC network.
We will be using a small part of the Optus Network in Redcliffe in Queensland. But what we’re focused on is getting the nbn completed. We’re going to see it rolled out by 2020 in total.
I appreciate that, let me ask you why you’re sticking with the Telstra HFC if you’ve got this new technology as you say they’ve been trying Fibre to the Distribution Point which apparently is Fibre to the Driveway and faster than Fibre to the Node. And only a little bit more expensive apparently. If this is the game changer why not just go with this instead of the HFC connections?
As I say David, we use the technology that makes sense in a given area. The Telstra HFC rollout makes sense in those two and half million odd premises around Australia. It’s cost competitive to use that existing infrastructure. We aim to….
Is it as good as this Fibre to the Distribution Point though?
Fibre to the Distribition Point is something that makes sense for the bulk of the Optus Network and as I say also for about 300 000 locations which were previously slated for Fibre to the Node.
We want to get this thing done, and our approach is going to see the nbn…
It’s faster than the HFC isn’t it?
Look you can have 100 megabit per second speeds on Fibre to the Distribution Point. There’s the potential for further upgrades through what is known as G.Fast but also we have upgrade paths potentially for the HFC network with what’s known as Docsis 3.1. So whether it be the HFC network or….
Which one’s better? Which one would you rather have at home? The HFC one of the Fibre to the Premises one, sorry Fibre to the Distribution Point one?
Look I’d be happy with either David. And our objective is to see the nbn rolled out completely by 2020, which is 6 – 8 years sooner than would have been the case under Labor.
Under Labor fast broadband would have been an interesting idea, and nothing more, for millions of Australians going out to 2026 and 2028.
You get the full national economic benefits of the nbn by getting it to all Australians as soon as possible.
So whenever you hear Labor say that the nbn is behind schedule or that it is over budget. That’s wrong.
The nbn is bang on track in terms of budget, in terms of the rollout schedule. Our last corporate plan demonstrates that. The full year results for nbn demonstrate that.
The fact is Australians are going to get the nbn a darn side sooner and at mush lest cost under us, compared to Labor.
Well let me ask you that finally then. As you say, you’re denying that this running over time and over budget but do you acknowledge that this decision to shut down the Optus, or not use the Optus HFC network and instead go with this new technology Fibre to the Distribution Point. That is going to cost more?
No. nbn is within its funding envelope. The base case peak funding was 49 billion dollars and it remains the case.
nbn has met every one of its financial, revenue, cost and rollout benchmarks over the last 9 or 10 quarters. Met every one of them.
Our predecessors didn’t hit a single mark. After six and half billion dollars and 6 years in office, they only had 51,000 paying customers hooked up to the nbn and contractors had downed tools in 4 states. It was a completely failed project.
Malcolm Turnbull brought order to bare where there was chaos. And we’re now seeing the fruit of it because the nbn is now available to 25 percent of the nation.
It will be available to half the nation in the middle of next year. 75 percent of the nation the year after that. The whole nation by 2020.
It’s going gangbusters. We’re on track. It’s good news. And what we want to do is stop talking about the nbn as a thing in itself and start focusing on what nbn can do for Australian households and Australian businesses.
Alright Communications Minister Mitch Fifield, thank you for joining us this afternoon, good to talk to you.
You too David.