Thursday, 2 May 2013

NBN: Lies, Damned Lies and Spreadsheets.

The Coalition haven't updated their with the figures recently released by NBN Co. Too busy? No, Turnbull & team released 22 Dorothy Dixer's. What's their game? It's definitively not about being "open & transparent", nor about remotely approaching the truth...

The figure at the heart of the outrageous ~$100 billion prediction has always been bogus, as any competent and straight analyst would know. When does political spin become deliberate deception and falsehoods?

Turnbull/Abbot have had ample time to correct or withdraw their wildly incorrect figures. To leave them, and their bogus spreadsheets, out there at some point "crosses the line" and becomes much more than "spin", it's acting in Bad Faith, directed at bringing the political process into disrepute.

Previously, I've written up my calculations of the estimated costs in NBN Co's Corporate Plan. Here's a recap:
  • $2,195 per premise
    • With a "common cost" of $1700M for 121 PoI's, transit networks, FAN's...
    • This same network, and cost, will be used by a FTTN.
  • $1,200 per premise Telstra disconnection fee (from 2010 Plan, used by Telstra in 2011)
    • $10 billion total vs $11.3 billion "FTTP Access Fees" released by NBN Co
    • The effective rate per passed premise, with only 70% premises connected, 
      • is $845.
Making the per-premise construction costs of Fibre from the 2012 Corporate Plan:
  • $2195 - $845
  • = $1,350
The variable costs, labour, machinery and consumables, are, I'm told, typically 50% on Network Engineering like this, or:
  • $1,350 ÷ 2
  • = $675
  • or $48/m for an average 14m/premise. Well above the $20-30/m for Fibre Backhaul construction.
This variable cost has to increase 300%, to $2,080, to reach the "reasonable" figure of $3,600 proposed by Turnbull et al. Because NBN Co hires sub-contractors to actually install the fibre, presumably on tight, outcome based, contracts, I can't see how such a huge variation is possible.

A reasonable figure, to use the Turnbull/Abbot language, would be adding $750, more than doubling, to the per-premise variable cost. At $3,000, a little short, 20%, of the claimed figure. And this only for the Fibre-served premises, the 93%.

Every day Turnbull/Abbot and their team leave their bogus estimates uncorrected, now that good data is public, raises questions about their credibility, intent and ethics. The danger for Turnbull in particular and the Coalition as a whole is "transference", moving an attributes from one entity to another.

If Turnbull and the Coalition NBN is ever perceived as deceptive, tricky and slippery, they run the real risk of the electorate taking a leap and "tarring them all with the same brush" and having everything they say discounted and disbelieved.

I find it incomprehensible to be relying on a deceptive strategy so far out from an election... All the overstatements, misinformation and deceptions will come out in six months: then what? More spin and propaganda? Is there something I'm missing? I just don't get the strategy...


  1. Perhaps their strategy is the same as their NBN, all about what we can get away with right now and no plan for the future.

  2. Steve,
    Turnbull in a recent statement implies that his FTTN plan will allow users to dispense with their Telstra phone-line rental. Another example of his blurring of the 2 competing plans.

    This is an important point, and I'm looking for evidence to refute the idea that FTTN can "do away with phone-line rental" and still make phone calls.

    If you have any evidence, let me know so I can add it to my web site.

  3. @Dedalus.

    Turnbull can say what he likes without fear of contradiction because he's withhold so many important details.

    He should be technically correct about Telstra line-rental changing, as the current wholesaler & retailer, but that would appear to be misleading.

    In the new world order, customers do NOT deal with NBN Co, they deal only with Retailers. And Telstra will still be the largest retailer.

    Will people stop paying service charges to Telstra?
    No, absolutely not.
    Will it be called "phone-line rental"? Probably not.

    It will be rental on a digital service, perhaps with a line item marked "line rental", perhaps not.

    It seems he's making a very fine distinction that most people won't understand and will make no difference in practice:
    - they will still buy a service from Telstra
    - they will pay only Telstra bills
    - those bills will include different services: phone and data, possibly multiples.
    - there will be a line-rental component of the bills
    - and a usage charges for phone and data.

    How's that different to "Telstra phone-line rental"?
    - It's actually an NBN line that Telstra is reselling
    - it's more than a simple phone service
    - it can be sold without a phone service

    More slippery & misleading phrasing.

    But then, we don't know, because he's not revealed all his plan..

  4. This on whirlpool by seven_tech:
    "Line rental won't exist under the Coalition. NBNCo. will control the lines via Bitstream, even if they rent-to-own it off Telstra. Therefore, the Bitstream can provide telephony, via VOIP OR straight IP data. It makes no difference, so you cannot differentiate in pricing terms which is "line rental"."

    Still sounds dodgy to me.

  5. I haven't read the Coalition Plan for this detail.
    On the surface, it looks like another cynical "play with the words" exercise.

    It may be dodgy. I've no way of knowing what they are trying to achieve.

    NBN Co is wholly owned by the Government. The Board performs to a "statement of expectations", which the Government of the Day can change at will.

    Who knows how an Abbot Govt will direct them. They're not being open, honest and fully transparent.

    I'd like to say that NBN Co has locked in two-part wholesale charging (AVC & CVC), but they may be directed to alter their charging regime comprehensively - which the ACCC has to approve.

    The Govt -of-the-day also creates the laws under which the ACCC operates. It could take 12 months, but they'd be able to change the rules.


Note: only a member of this blog may post a comment.