ABC Mornings Brisbane with Steve Austin
Parliament House Canberra
11 October 2017
8:35am (AEST)
E & OE
AUSTIN:
Yesterday we put in a call to the Federal Communications Minister Mitch Fifield, after reading an article he wrote in The Financial Review, and by coincidence he agreed to come on this morning. Minister good morning to you thanks for coming on this morning.
FIFIELD:
Good morning Steve.
AUSTIN:
Is there anything, I know you don’t know about Marty’s case, but is there anything you can say to Marty. It seems extraordinary that he hasn’t been able to get an internet landline for fifteen years, and has been having to fork out serious money for a wireless connection.
FIFIELD:
Well clearly the fact that Marty hasn’t been able to get good internet, or any internet at all for fifteen years…
AUSTIN:
Via landline.
FIFIELD:
Via landline is a function of the pre NBN world. The great thing about the NBN rollout is our absolute guarantee to Australia is that every premise will be connected to the NBN. Now I understand Marty would dearly love to be connected to the NBN today, and preferably yesterday. But the good news is that by 2020 everyone in the nation will have access to fast broadband via the NBN.
AUSTIN:
The pre NBN world is a world of copper wire. And all around southeast Queensland many of us are putting up with copper wire that is so old it needs to be replaced but no one takes responsibility for it, even when it breaks down or doesn’t do the job. The Government is persisting with the rollout of copper wire in places like Brisbane and other places.
FIFIELD:
NBN as a network fundamentally is a fibre network. In some places, particularly in the fibre to the node part of the network, there will be copper for that last connection from the node to the premise. But you can get fast broadband speeds over that connection. And what is really interesting to note is that around the world, whether you are talking the United States or Europe, what they do is they pursue what we are doing, a multi technology mix where you have ADSL. Using parts of the existing infrastructure. You use fibre to the prem in some cases, particularly in greenfields estates. You use the old HFC pay TV network as well. And satellite and fixed wireless. So we’re doing what the rest of the world does and that’s use the technology that makes sense in a given area that can see broadband delivered fastest and at lowest cost.
AUSTIN:
Today’s Guardian newspaper has a report that the disaster coordinators on both the Sunshine Coast and the Redlands had a meeting this week with the NBN and expressed their real concern about the reliability and the resilience of the NBN in times of cyclone, flood or bushfire. Their concern is that each node, which is your preferred model, has its own power supply which could be lost if the electricity grid drops out during a disaster such as a flood or a cyclone. Now apparently this was raised, and the NBN is well aware of it. But it has been said that it’s a built in flaw. Can you speak to that, can you address that issue Minister.
FIFIELD:
There is no communications network that is failsafe at a time of natural disaster or at a time of power outage. One of the myths I guess about the pre NBN world is that in all circumstances at every time the pre NBN network would work, even in a power outage. Now you need power to the exchange obviously in the pre NBN network. But even in the premise most people these days, even in the pre NBN network, have cordless phones which require power from the power point. So if the power goes out at your place, even in the pre NBN world, you are not necessarily going to be able to use your land line. So you should never rely on one technology at a time of natural disaster. It is important to have a fully charged mobile phone. Have access to a radio. Make sure that you have got a range of options.
AUSTIN:
We’re coming into the disaster season here in Queensland. The Bureau has warned of four cyclones, one of which is guaranteed to cross the Coast. The NBN are clearly aware of this problem because they said they are planning a rollout of small portable petrol generators as a further backup. But the former head of the NBN Mike Quigley, has quoted and told The Guardian that the copper system is nowhere near as resilient as fibre, and that the concerns being raised here in Queensland should concern emergency response teams. Is he right?
FIFIELD:
Well as I say, there is no communications network in time of fire or power outage that is a hundred percent reliable. Even if you are talking mobile phones, if there is a disconnection to the power to a mobile phone tower they have battery backup for a certain period of time. But what they need to do, particularly in critical areas, is then get a petrol generator to the site. There is no communications network that is failsafe.
AUSTIN:
Is Australia’s NBN internet speed slower than Kenya’s? As was reported.
FIFIELD:
It depends. There’s 1.75% of Kenyans who have access to broadband and they have marginally faster broadband than the 90% of Australians who have access. This is one of the really frustrating things Steve, you see these headlines which say that Kenya has faster and better broadband than Australia. It’s complete rubbish. 1.75% of Kenyans have access to broadband. Only 1.75%. On no measure, it doesn’t matter how you slice it or dice it, you can’t possibly say that that means that Kenya has better broadband than Australia when more than 98% of Kenyans have no access to broadband. It’s absurd.
AUSTIN:
So it’s an unfair comparison.
FIFIELD:
Absolutely. We have 90% of Australians who have access to broadband now. Under the NBN it will be 100%. Only 1.75% of Kenyans have access to broadband. So if you are part of the Kenyan elite and you are lucky enough to have broadband, then you might have broadband which is marginally faster than that which Australians have. But Steve 1.75% of Kenyans have access. More than 98% don’t.
AUSTIN:
Yet there are real concerns about the operation of the NBN here. The Australian Competition of Consumer Commission, the regulator, is concerned that industry uncertainty springing from the NBN’s charging structure is quote “having an adverse effect on competition and consumers”. Have you been able to address that concern?
FIFIELD:
We have, as you know Steve, a wholesale network in NBN. The retail service providers purchase capacity from NBN to service their customers. It is incumbent upon retailers to make sure that they purchase enough capacity to honour the commitments that they have made to their customers. Now NBN has a pricing structure which has two components. I don’t want to get too technical. But there is an AVC and a CVC component. And the focus of most of the retailers has been on what’s called the CVC. This is a charge which is not set in stone. It’s been…
AUSTIN:
Well it has been because people like Steve Baxter, who is about to become Queensland’s chief entrepreneur. And you know Mr Baxter I’m sure. He’s criticized very strongly and consistently the charge that NBN charges users for the CVC charge.
FIFIELD:
Well the CVC charge is a charge to the retailers. And, as I was about to say, it’s not a charge that is set in stone. It’s already been discounted by NBN on three occasions. NBN is in the middle of consultations with retailers and is looking at ways of further shaping that charge to better suit retailers. Now NBN wants to see successful retailers. Absolutely. But NBN also needs to be in a position where it covers its costs and where it is able, in the fullness of time, as it needs to, to progressively upgrade the network. Because there is no communications network in the world that is set in stone. They do need upgrade from time to time. And NBN needs the opportunity to do that and to cover its costs.
AUSTIN:
Why is the return to Government, the value of the NBN dropping? It has been marked down according to a finance writer for The Australian from 7.1% to now down to 2.7% last year. Why is that?
FIFIELD:
I’m not sure what you are referring to, you are probably referring to the internal rate of return?
AUSTIN:
Yes that’s correct.
FIFIELD:
There was an internal rate of return, I think of about 7% under our predecessors, which was I think an unrealistic one. We’ve got a modest internal rate of return under the NBN with 3.2 – 3.7% which is 1%, I think, above the long term inflation rate. So it is very modest internal rate of return.
AUSTIN:
A number of my listeners are heavily disputing your claim about Kenya. They are all saying that on average Kenya does have faster average than Australia’s broadband speeds. But I will move on.
FIFIELD:
Steve I have just got to address that. In Kenya you have to be one of the privileged, wealthy few to have access to the NBN, to the broadband.
AUSTIN:
And when you get it it is faster than Australia’s apparently.
FIFIELD:
Well only 1.7% of Kenyans have access to any broadband at all.
AUSTIN:
And when you get it it is faster than Australia’s
FIFIELD:
They have some private sector companies who have cabled up a small number of premises, in areas where wealthy people live, and they have marginally faster. But Steve…
AUSTIN:
Alright everyone’s made their point I think.
FIFIELD:
Steve this is cloud cuckoo land stuff. To claim that a nation, where you have more than 98% of people who have no access to broadband, that that country has better broadband than Australia, which has 90% access, will have 100% access, is going to have a network where you are going to have a mandated minimum speed of 25mbps, where 90% of the fixed line footprint is going to have speeds of 50mbps. To claim that that is inferior to a nation where more than 98% of people have no access to broadband is just bizarre.
AUSTIN:
They have excellent mobile phone coverage and I think that is the reason why. One of the best mobile phone coverages in the world apparently. I’ll move on. One listener Nigel says why is one in six HFC users declared ready for service but unable to be activated on the NBN. Can you speak to that, do you know why that is.
FIFIELD:
Sure Steve. The approach that we are taking when an area is declared ready for service is that even if there is a percentage of people whose premises need further works we don’t hold up the access to everyone else in that area for the NBN. We could say that no one in an area is going to be able to access the NBN until 100% of premises have had the work done. But that would delay the overwhelming majority of Australians getting access to the NBN. So there will be a percentage of people in an area whose premises need additional work once an area has been declared ready for service.
AUSTIN:
Would you come into Brisbane studio for me and take talk back on this for Brisbane residents?
FIFIELD:
Sure.
AUSTIN:
We’ll arrange that a soon as we can. Minister thanks for your time.
FIFIELD:
Great. Good to talk.
ENDS