SUBJECT: Malcolm Turnbull’s NBN mess  

PATRICIA KARVELAS: Michelle Rowland is the Shadow Minister for Communications. Welcome to RN Drive. 


KARVELAS: Malcolm Turnbull today described the NBN as a calamitous mistake. Were there mistakes in its establishment, creating a big government company to do it?

ROWLAND: I think the starting point, Patricia, is you have to remember what Labor was facing in 2007 when we came to office. We had facilities-based competition essentially having failed, so competition for broadband services had failed to the extent that we had so many people on the wrong side of the digital divide with no pathway to everything different. We had the vertical integration of Telstra, we'd come off from over a decade of Coalition Government with around a dozen failed plans to improve the services in broadband. And so there needed to be a game changer. And just as much as the NBN was about constructing this important piece of national utility infrastructure, it was also about bringing greater competition, including through busting the vertical integration that we saw of Telstra at the time. So, these were big decisions which were made but for very genuine reasons.

KARVELAS: He says a new company shouldn't have been established to build the network and that Australia should've followed the New Zealand model which used existing organisations to rollout the network. Wouldn't that have been a better way to do it? 

ROWLAND: Well, Malcolm Turnbull also said that we shouldn't be having NBNCo having its own satellites and then when they launched he hails them as "a big game changer", again his words. So, in hindsight Malcolm Turnbull likes to have this birds-eye view of what he thinks should've been, but he was there for the tail-end of John Howard's Government and we saw nothing from him about digital inclusion, about bringing Australia into the future.

KARVELAS: Sure, but I'm asking you to reflect on the decisions Labor made. You can criticise the other side like he's criticised you. In this interview I'm asking you to review what Labor did. In hindsight, should Labor have taken a different approach?

ROWLAND: Look, it was a big project. This approach, when you think about what were the alternatives, Malcolm Turnbull's now saying it should've been done differently: well what were the alternatives at the time? The alternatives were none to be seen, because we had such a degree of market failure Patricia.

KARVELAS: So you're saying it would've been impossible to follow the New Zealand model, because that's the suggestion here?

ROWLAND: I'm saying that the path Australia took was found because we had such a degree of market failure, we had the market - actually you’d remember, Telstra - was unwilling to participate in this project. It essentially submitted a non-complaint bid to be the NBN provider. So I look forward to Malcolm Turnbull rewriting history some more about what he supposedly suggested during his tenure between 2004-2007 in the Howard Government.

KARVELAS: NBNCo conceded one in four customers is unhappy with the service they are receiving. What did you make of that figure?

ROWLAND: I think that would be on the low side and I think that if you ask any members of the House of Representatives how much time their electorate staff spend on NBN complaints, it would be right up there in the top three. And, in fact, we even had a member of the government, the Member for Mallee, very honestly say “look I've got one full-time electorate staffer essentially working on NBN problems”. So, it is a huge issue in people's electorates and if you just look at Malcolm Turnbull's answers today, again it just shows how out of touch he is because I don’t know how many times he mentioned consumers, but it sure wasn't a lot if he mentioned them at all.

KARVELAS: If you're just tuning in I'm Patricia Karvelas and my guest tonight is the Shadow Communications Minister, Michelle Rowland. Our number if you want to text in, and I know many of you like to text in about the NBN, is 0418 226 576. You can also Tweet us using the hashtag RN Drive. Now Bill Morrow says the only advantage of Fibre to the Premises would be faster internet speeds for people but he says that it's been proven that people just aren't prepared to pay the costs for higher speeds. Isn't that a fact?

ROWLAND: I think the reason why people aren't taking up higher speeds are two-fold. Firstly, if you're looking at Fibre to the Node, which is the predominant technology that the government is rolling out now, there is indeed a lack of confidence in the network and there's a lack of confidence because people are taking up plans and they are not able to get the speeds that they contract to actually have delivered to them.

KARVELAS: But isn't it cost? I'm asking you to reflect on the cost element. In this quote "so the whole premise of the Fibre to the Premises argument by the Labor Party has been comprehensively disproved by what the public are prepared to do and use". The public haven't been prepared to pay for it. 

ROWLAND: Look, we've heard this kind of language before and I think that anyone who would assume that the Australian public doesn't want first-rate broadband, doesn't recognise that they need fast internet services in order to have everything from streaming to other advanced communications technologies. The Australian public are far better informed than, I think, NBNCo and indeed the Prime Minister recognise. People understand the limitations of copper. You talk to people about "would you prefer a fibre-based NBN or a copper-based one" and it’s just like what was said at the time: "do it once, do it right and do it with fibre". And if you're talking about costs too, it’s not just the issue of retail costs, look over the long term. Copper has a far higher cost under this model in terms of the remediation that needs to be done now, it’s something like $177 million of new copper and up to about $640 million of remediation. And over time, the operation and maintenance costs of fibre are far less than that of copper. 

KARVELAS: NBNCo says people aren't getting the speeds they want because retail service providers haven't bought enough bandwidth. RSPs say the wholesale price is too high. Should that cost be brought down?

ROWLAND: Well, retail service providers have been complaining about the CVC component and it's been changed a few times but doesn't seem to have had a measurable success and I put it down to this Patricia: the CVC regime was designed for a fibre-based network. It wasn't designed for this mish-mash of technologies that we currently have under Malcolm Turnbull's multi-technology mix. And again, it's very telling that the government seeks to blame retail service providers and thinks that the NBN should be above all criticism. And when you look at it, retailers often get a bad name, but let’s face it, they are the ones who have the contractual relationship with the customer. It's in the interests of a retailer to be able to service their customers in order to retain them and in order to, quite frankly, make more money off them. So, I think for the government to be hiding behind and trying to deflect all these problems that are going on and deflect them onto retail service providers, I don't think that does anything for the customer experience at all.

KARVELAS: And there are examples of some streets in Dubbo, for instance, where the people on one side of the street get optic fibre directly to their homes while those opposite are connected through existing copper wires, so that's where the digital divide argument comes from. They get vastly different speeds. This is a fact. Does Labor support ripping out that copper and replacing it with optic fibre to the home?

ROWLAND: We're not advocating ripping out copper and Bill Shorten made that very clear on Q&A a little while ago. But Patricia, we'll need to be informed by the realities on the ground, if and when and election is called in the near future and if we're successful in forming a government. But your example about a digital divide, it doesn't just happen in Dubbo, it happens in Blacktown. I've got areas that have Fibre to the Premises and literally across the road people are still either waiting for the NBN or they have a substandard service.

KARVELAS: So, if Labor was elected you couldn't actually rectify this?

ROWLAND: Well, we will have to be informed by the realities on the ground Patricia. There are so many aspects of the economics of the NBN that seem to be known only to them and to the government and, in a nutshell, the economics of the NBN are busted. It's a network that costs more, does less and one in which consumers have very little confidence. So, we'll need to examine what stage the rollout is, whenever the election is called and whenever the election is completed, and this will require difficult choices to be made, make no mistake about it. 

KARVELAS: The Minister responsible for the NBN under Labor, Stephen Conroy, was asked about this this afternoon and he made it clear he wasn't speaking for Labor but he said the consensus rather amongst technology companies was that the copper wire would have to be replaced with optic fibre. Do you agree?

ROWLAND: I've heard that from a few people in the industry, and, if fact, that was one of the reasons why Labor opted for a fibre model in the first place. But it's not just Stephen Conroy alluding to this: the reality is that only a couple of months ago the Chief Engineering Officer from NBNCo actually said, essentially he said, that the network would not be fit for purpose and some future stage it will need to be upgraded. Now, the government tried to play this down and say "well, upgrades mean different things. Everyone always looks to upgrade their network", but we don't even know whether that person at NBNCo had actually budgeted for any upgrades that he thinks would be necessary. But look, quite frankly Patricia, elections have consequences. There are a lot of reasons why we lost in 2013 but I can tell you our fibre-based NBN was not one of them. Even if you look at the opinions today, in a number of polls that are done, you can see that the majority of Australians overwhelmingly favour a future-proof fibre based network.

KARVELAS: Sure, but are they prepared to pay for it?

ROWLAND: I think we will see that people are prepared to pay for it because it will be something that we rely on as we become increasingly connected as our digital economy continues to take hold. And again, I think it would be a folly to under-estimate how much people rely on their internet services and having fast broadband and how much technology developments in future will demand that that is an essential input to everything we do. 


KARVELAS: Just on another issue, a staffer from Opposition Leader Bill Shorten's office has resigned today because of a photo of him in blackface that has emerged. Was that the right thing for him to do and why would a staffer working for the Opposition Leader have done this?


ROWLAND: I've seen those reports Patricia, and my understanding is that this occurred 10 years ago, which by no means excuses that behaviour, and that, after discussions, he decided to resign and I think he has paid a heavy price for something that was very foolish. 


KARVELAS: Is it a heavy price that all people should pay? Is this the consequence of something like blackface? Is it a message also about the way the ALP views it? 


ROWLAND: Look, I think people need to be very aware of decisions that they make and how they portray themselves in a situation where we are increasingly exposed to more and more people, whom we don't know, who end up seeing what we do, quite frankly, in many cases. But I think it is a salient reminder for all of us to be aware of who we are, about our characters, because certainly that sort of behaviour would be out of character for this individual. But he's done something very foolish and paid a very big price and obviously we live in a society where many people, many strangers have access to the images that we choose to share and we should all be mindful of that, as well as our own behaviours.