ABC Lateline

FRIDAY, 17 JUNE 2016


EMMA ALBERICI, PRESENTER: This week Labor announced its NBN policy. Three years ago they were offering to deliver fibre to 93 per cent of homes and businesses across Australia. Now they’ll commit to lay fibre to just 39 per cent. A short time ago I was joined by the Communications Minister Mitch Fifield and the Opposition’s Communications spokesman Jason Clare. Gentlemen, welcome.



ALBERICI: I want to start by asking you both the same question we put to our viewers, which is: do the benefits of a fibre-to-the-home broadband network outweigh the costs? I’ll have an answer from you first, minister?

FIFIELD: Our objective is to get super fast broadband to Australians as fast as we possibly can, and as you know, our objective is to have that completed by 2020. We’re pursuing a multi-technology mix, which is one of the reasons why we’re able to get the NBN rolled out faster than our political opponents. I appreciate the debate about fibre-to-the-premises, but one of the reasons why we’re able to move so much faster is because fibre-to-the-premises involves the digging up of people’s driveways and fibre-to-the-premises is about twice as costly per premises to install compared to fibre-to-the-node. So, through fibre-to-the-node we’re gonna have speeds of up to 100 megabits per second, we’re gonna have, as we’re experiencing at the moment, the average download speeds are about 70 megabits per second. So you can have really good speeds with fibre-to-the-node and you don’t have to blow the bank to do it and you don’t have to dig up people’s driveways.

ALBERICI: Jason Clare, are the benefits of fibre so indisputable that a future Australian government should build a fibre-to-the-home network regardless of the cost of doing so?

CLARE: All of the research, whether it’s from the World Bank or whether it’s from KPMG here in Australia, shows that fast broadband creates jobs. It’s why New Zealand is going from fibre-to-the-node to fibre-to-the-home. It’s why AT&T in the United States, who built a fibre-to-the-node network, are now going back and building a fibre-to-the-home network because Americans like Australians, are demanding faster broadband and we know that fast broadband is as important to many businesses today as electricity is.

ALBERICI: During the 2013 election campaign, the then Labor Communications Minister Anthony Albanese told Lateline the Government should do it once, do it right and do it with fibre. It was a popular policy. Why have you abandoned it?

CLARE: I’ve made it clear that we can’t click our fingers and go right back to 2013. Over the last three years Malcolm Turnbull’s spent $15 billion of taxpayers’ money building the second-rate version of the NBN. There’s around about half a million homes that have fibre-to-the-node already and about 1.3 million homes where they’re building fibre-to-the-node now. So we can’t go back and erase all of that. It’s hard to put Humpty Dumpty back together. But what we can do is where they haven’t built fibre-to-the-node yet, we can build fibre-to-the-premises.

ALBERICI: Isn’t it just a matter of continuing the fibre?

CLARE: I’ve said that part of our plan is making sure that we roll out more fibre to those areas where Malcolm Turnbull hasn’t got there yet and built the copper version of the NBN, but there are parts of Australia where they have built this second-rate slower copper version of the NBN and Infrastructure Australia will provide us with advice on how we go back and fix those areas up.

ALBERICI: Mitch Fifield, how many Australians will get fibre-to-the-home under your plan?

FIFIELD: Under our plan, there’s about – I think it’s 38 per cent of people who will get HFC. There’s 38 per cent of people who’ll get fibre-to-the-node and about 20 per cent of people who will get fibre-to-the-premises. But …

ALBERICI: Can you translate that to homes and businesses? How many?

FIFIELD: Oh, look, you’re talking – you’re talking a couple of million for fibre-to-the-premises. But I do have to make the point – and this is one of comparison – that in the last month alone we connected 61,000 premises to the NBN. That’s people who are paying. They’re customers. Labor, over six years in government, only connected 51,000 premises. So we did 10,000 more premises in one month than Labor did in their whole period of office. So it’s one of the reasons why we’re so determined to pursue this multi-technology approach is because we want to get the NBN out to people. You don’t get the full national macroeconomic benefits of the NBN until the whole nation is connected. Now Jason’s proposal is to have people wait at least two years longer and to pay about $8 billion more. And I know Jason will come back to the issue of speed and can I just point out, of the one million people who are currently customers of NBN, 83 per cent of them are opting for speeds of 25 megabits per second or less.

CLARE: It’s important for people to understand how the cost of the NBN is made up. It’s made up of two things. First, there’s the taxpayers’ investment, which is $29.5 billion, and then there’s the private sector investment, which is in the order of $26 billion as well. Now what we’ve said with our plan to roll out fibre to up to two million more homes and businesses is that the capital cost of that is more, about $3.4 billion, but the operating cost of operating more fibre is less because you don’t have that cost that comes with fixing the old Telstra copper or the electricity bills that come with running those 30,000 nodes that Malcolm Turnbull and Mitch want to build. The other part of this is the internal rate of return because by doing this we actually increase the return back to the taxpayers. What’s often forgotten here is that this is a business we’re developing that creates revenue back to the Australian taxpayers. When Malcolm Turnbull first got this job, the internal rate of return was 7.1 per cent. It’s dropped to now 2.7 per cent. Of all the failures and mistakes Malcolm Turnbull’s made with doubling the cost of it, doubling the time, the internal rate of return is probably the worst.

ALBERICI: But Mitch Fifield is right there: you didn’t have very many people – you actually didn’t have so many people signed up, so, there weren’t that many people paying.

CLARE: Can I go to that point? 

ALBERICI: No, I’ll stop you there for a moment because there’s a lot of ground to cover. Mitch Fifield, just to Jason Clare’s point: in hindsight, was it a mistake to continue to use copper in your network given the costs involved in maintaining that ageing technology? And you also have to provide electricity to nodes that Labor’s plan doesn’t need to price in.

FIFIELD: In terms of electricity to the nodes that Labor don’t have to price in, Jason says that will save $60 million a year. You don’t cover $8 billion of additional capital expenditure through $60 million a year savings in power to the nodes. Jason’s quite …

CLARE: It’s not $8 billion, Mitch. It’s not $8 billion. You’re misleading the Australian public with that figure.


CLARE: You know as well as I do that in your corporate plan, the cost of your project is $46 billion to $56 billion.

ALBERICI: But with respect, gentlemen, let me ask you both the same question on this particular point. I have to ask you both whether the Australian public should trust either of you given three years ago in this very studio your side, Mitch Fifield, said that you would – your whole project would cost $29.5 billion, and Jason Clare, Labor said it would cost $37.4 billion. You’re both out enormously.

FIFIELD: We’re operating on the basis of the information that we had in opposition. When we came into government we commissioned a strategic review and it found that NBN and the previous Labor government did not have a clue how much building the NBN was actually costing. The previous government thought that to hook up each premises cost $2,400. It turned out it cost about double that. With fibre-to-the- node, we’re able to roll it out at about half the price per premises. So, talk from Jason of costs having blown out are completely wrong. Jason says – Jason says our dollar – Jason – Jason …

CLARE: Mitch, you promised that it’d all be done this year. You promised. You promised that it would all be done this year.

ALBERICI: Let’s get a quick response from you, Jason Clare.

CLARE: This is the extraordinary thing. Malcolm Turnbull three years ago said everyone in Australia would have the NBN this year. Less than 20 per cent of Australia has access to the NBN right now. So what Mitch is saying – he’s trying to rewrite history here. They promised it’d be all done this year and it hasn’t been done. The Strategic Review that Mitch talks about said that fibre-to-the-node would cost 600 bucks a house. We now know that’s nonsense. It’s gone up almost triple that to $1,600 a house. They said they’d have 2.61 million homes connected to HFC this year. Not one house has been connected to that network, yet the first one I think, Mitch’ll tell us, is next week. So this claim that they’re on track is just nonsense.

FIFIELD: Well let me answer that.

CLARE: At the same time, we’ve gone from 30th in the world to 60th in the world for internet speeds.

FIFIELD: In the interests of equal time. Let me – I just respond to that quickly.

ALBERICI: I want to move on because we are going to – yes, I will give you equal time, but I want to leave that point there because I want to move on. Mitch Fifield, there does seem to be a contradiction at the heart of your industry policy. On the one hand, the Coalition’s vision for Australia is an innovation nation with smart, agile cities, but then you opt for a second-rate NBN network that will only ever deliver to the bulk of Australians up to 100 megabits of download speeds.

FIFIELD: Emma, you shouldn’t buy Labor’s line that it’s a second-rate system. It’s a system that will get to Australians many years …

ALBERICI: Well if we take that the first rate is fibre all the way to the homes and businesses.

FIFIELD: Well, if you look internationally, if you look at the US, if you look at Germany, they’re not fibre obsessed as Labor are. They’re not taking the approach …

ALBERICI: France says 60 per cent of households will have fibre to every home and business premises by 2018.

FIFIELD: If you – well, if you look at most European countries, they pursue a multi-technology mix that will see the NBN rolled out much sooner to Australia.

ALBERICI: In the end, it’s about speeds.

FIFIELD: Well, no, it’s not about – it’s about speeds, but – it’s about speeds, it’s about cost to the taxpayer and it’s also about getting the NBN out to Australians as soon as possible.

ALBERICI: Christopher Pyne just the other night on Q&A program said that Australians didn’t need the speeds that Labor is offering.

CLARE: That’s just sort of myopic, short-term, Mr Magoo-type vision from the Liberal Party. But I tell you this: anyone who tells you that they know exactly what everything the NBN is going to be used for in the future is just guessing. If you go back 100 years, what was electricity for when it was first installed in people’s homes? It was for the lights. Now, if I asked you to write a list of everything we use electricity for, it’ll go on for pages and pages and pages. The NBN is exactly the same. What we use it for today is very different to what we use it for in five, 10 or 15 years’ time.

ALBERICI: A final comment, Mitch Fifield. The NBN has become a big issue in the seat of New England where Tony Windsor says he was promised a commitment by the Julia Gillard Labor Government to get the network rolled out in Tamworth, but that never happened because Labor of course lost government. Are you concerned your policy may well cost you your Deputy Prime Minister’s seat?

FIFIELD: No, I’m very confident that the people of New England will return Barnaby Joyce. He’s a fierce advocate for that region. But I do – and this is directly related to the question, I do have to point out that when Labor left office, their own targets said that they were meant to have a million people hooked up to the NBN. They only had 51,000 people hooked up to the NBN. They missed their 2013 target by 85 per cent. So the reason why Tony Windsor might be saying that his electorate doesn’t have NBN is not – is not true. It’s not because of this government, it’s because of the absolute mess that we inherited from the other side. We’ve been seeking to repair that and we’re rolling out the NBN at a pace. And what is absolutely certain is that if Jason Clare becomes the Communications Minister and Bill Shorten Prime Minister, Australians will be waiting years longer for the NBN. That’s the truth. It’s gonna cost more and take longer under Labor.

ALBERICI: A final word from Jason Clare. And you would have to admit, Jason Clare, a lot of Labor voters will be bitterly disappointed in your announcement this week given you were promising three years ago 93 per cent of homes would have – and businesses, 93 per cent of them would have fibre to their premises. Now only 39 per cent.

CLARE: Emma, I feel sorry for Mitch because he’s been thrown a hospital pass by Malcolm Turnbull.

FIFIELD: Not at all.

CLARE: Malcolm Turnbull is the one who has stuffed this up.

ALBERICI: No, I want you to answer my question, please.

CLARE: On New England specifically, there’s a big difference here. If Labor wins the election, places like Tamworth get fibre-to-the-premises. If Mitch and Malcolm and Barnaby win the Coalition, then Tamworth gets left with the second-rate slower version of the NBN. We made a commitment this week that we’d roll out fibre to up to two million more Australian homes and businesses to help set us up …

ALBERICI: A far cry from 93 per cent, though.

CLARE: You can’t click your fingers and undo the mess that Mitch and Malcolm have made overnight. But if Labor is elected, we’ll get to work on that.

ALBERICI: Jason Clare, Mitch Fifield, we’re out of time. Thank you both very much.

CLARE: Thank you.

FIFIELD: Thanks, Emma.