Monday, 29 July 2013

NBN: Turnbull's Weasel Words - I

Turnbull appeared on ABC Local Radio, Shepparton, (transcript) repeating his usual phrases and claims. Politicians are notorious for not saying things that can be clear enough to be held against them later.

Combine this political trait with the wiles of a former barrister history and you'll find Malcolm is very deft at this 'art'. I find his utterances to be a classic use of Weasel Words, not just oversold or misleading, but deliberately obfuscating (hiding) critical issues and phrased in a slimy way so that later he can truthfully say "I never said that".

Through this he creates the impression of firm promises and strong statements. They are not. But would you expect less in a politician making vapid promises in the hope of getting elected?

More so when it is peddling an inferior infrastructure on the scale of his FTTN plan?  A plan rejected in 2005 (by John Howard of all people) and trying desperately to be revamped in 2013 and beyond.

This doesn't makes economic or technological sense.
Here are some of the tactics Turnbull uses to obfuscate. This piece comes from a longer version.

1. Attack the Messenger: it's a good strategy when the public has rejected your message and you want to deflect questions. Over multiple questions on why there seemed to be overwhelming public support for Fibre, not Copper, the ABC summarised that the media was to blame and they weren't asking the right experts.

2. Turnbull has repeatedly said, including in this interview, Labor is "telling lies about our policy and indeed about their own". Elsewhere he has said in public, repeatedly, that Labor claiming "connection to the (current) NBN is free" is "an outright lie", "Now that is a lie" and in this interview, "outrageously false and terribly misleading".
Turnbull is setting a very high bar for himself by picking at minutiae and using strong language like "outright lie". He's also wrong in his blanket assertion: At least one large ISP/NBN Retailer, iiNet, do not charge setup fees for standard NBN service installations.
Were Labor "lying"? Only in a very legalistic and pedantic sense. BUT, if you adopt that frame of reference and apply the same test to Turnbull's rather over-the-top rejection of the proposition, then he too is wrong.
Using Turnbull's own logic and standards, he is being "outrageously false and terribly misleading" in his accusation of lying. Why? Because not all NBN Retailers charge setup fees in all cases (those with a standard install can get zero setup fees if they choose their Retailer well) - as must be the case for his legalistic pedantry to be 100% correct. And as he is the one attempting to enforce the standard of complete precision and exactitude, then he must also accept that all his statements will be tested against his own standard.
 3. Turnbull trots out the usual "we estimate" it will cost much more "will take many, many years – it could be decades – to complete", and later switches, dropping "estimate". Both pure spin, justified only in the minds of those making up the Coalition estimates. Plus trotting out the usual "you've seen how little progress if any there’s been in ..." is more weasel words. Later he quotes his own worst-case scenario estimate as if it were an established fact, giving it the same credibility as the professionally created, detailed and justifiable NBN Co project budget.
Either Turnbull does NOT understand the nature of large, complex infrastructure projects or he does understand the complexities and realities and is being purposefully disingenuous  and misleading. It cannot be other (this one is binary logic). He is either uninformed and incompetent or knowingly "spinning",  I consider outrageously. Both are NOT what voters respect or desire in a possible Minister for Communications, the role he is advertising and advocating himself to fill.
4. Q: "Do you personally believe that that is the superior option to the fibre to the home network which is already underway?" A: "Well it is certainly the most cost-effective one."
"Cost Effective" is a weasel phrase to mean "Cheap" and probably nasty. Turnbull is confusing and mixing up terms, that somehow what seems like an accounting or business term is being applied to the NBN and a cheaper, inferior solution is preferable. There is no standard definition of "Cost Effective" - it translates to "If we feel like it". What's most effective depends on what expenses you include or exclude, the time-frame you use and whether you consider profitability/returns or only input costs.
The Turnbull Node Plan can only be 10% cheaper to the Government, while much more is transferred onto customers (there really will be large setup costs for VDSL2 users), they cannot meet their promise of connection with "No Disruption", no DSL or telephone access charges have been published (but are used in their spreadsheets) and they are building their FTTN to throw away. In fact, they have put a number on their deliberate wastage: $2 billion dollars. For the 8.968M premises they'll "cover", they estimate $900 per service and "Capex Reused" will be 50% [bottom p14 Background doc]. Translated: "we'll throw away $450 per service on 9M services". Strangely, this is about how much less VDSL/FTTN is than Fibre.
What Turnbull never goes on to discuss is something most people, including the commentators, don't seem to have paused to consider: Will Fibre to the Node be more profitable?
Confusing "more Cost Effective" with "more profitable" is the massive con at the heart of the Turnbull Node Plan: "Sooner, Cheaper and More Affordable". They have never spoken about being Profitable or even paying for itself, let alone providing a Return.
Every single Business Plan, especially by big business, and that Turnbull would have written or assessed has four critical numbers, only one of which, Total Funding, appears in the Turnbull Node Plan.
  • Total Funding,
  • Project Lifetime,
  • Return on Investment, and
  • Years to break-even.
"More Affordable" can only mean one thing: lower charges, which means lower Revenue. Turnbull et al have never discussed their anticipated Revenues, how long before they intend replacing their Fibre to the Node network, how Profitable it will be and if it can or will ever be able to pay for itself. The only commercial aspects they've discussed are "Sooner" and "Cheaper".
"Cost-Effective" is weasel words solely to mean "Cheaper to buy" and to take attention away from their own modelling: the Turnbull Node Plan is a Financial Disaster. If it wasn't they'd be talking about Profitability as well.
It will cost many more times to run the the Nodes, they will make a lot less in Revenue, barely covering costs. Not only will the Turnbull Node Plan force $2-4 billion of new costs onto customers, it will be barely profitable, it will never pay for itself, can never provide a Return on Investment (versus 7% in the current plan) and while they say they intend to throw it away, provide absolutely no detail on that critically important next stage of their Plan: who will pay, and how much, for direct Fibre in the future.
5. Here, two issues are conflated. First: Nobody but the Turnbull experts know anything, amazing when he also calls Labor "arrogant".

The second is simple, he's not comparing Apples with Apples. All the "authorities" Turnbull cites are incumbent Telcos who critically, like Telstra, own the copper. That's the enormous difference here in Australia: Telstra, the asset owner, is not building the network, that completely changes the economics. One of the largest single costs to, and creditor of, NBN Co is Telstra.

The answer to Turnbull's rather bizarre & irrelevant comparison is simple: Yes, they all know what they're doing with their own copper. That's NOT what we're dealing with in Australia, or did you not notice that "$50 billion" deal you wrote about in your Node Plan?
the people that we have been speaking with and learning from are not people who bob up on television and maybe have a lecturer at a university or something. They’re people who are actually building networks. You know, you’ve got to be pretty arrogant and Labor is of course, to think that that they know best and:
  • Deutsche Telekom in Germany doesn’t know what they’re doing.
  • British Telecom in Britain doesn’t know what they’re doing.
  • AT&T in the United States doesn’t know what they’re doing
6. Costs. Massively underestimate his own Costs then massive and baseless exaggeration of current detailed & precise NBN Co costs, including never mentioning the latest real figures reported in April to Parliament. No mention of Revenue, Profit or Return on Investment: the critical factors in an investment.
So it’s not right to say it’s copper versus fibre. [Framing the question as "something else".] 
What we are saying is that you can save three quarters of the cost or three quarters of the time [his plan is NOT for $10 billion or 2.5 years. This is pure fabrication.] 
to get the job done by not digging up and replacing the last 4- or 500 metres of copper. [That Telstra, not NBN Co or the Coalition own, and will charge a lot for.
And that is because of the latest technology that is now available.... ["New Technology" must be good, eh?! Another meaningless, relative term. It's very expensive and a poor second to what really works.
But are we really so brilliant that we know something that the rest of the world doesn’t? [Yes. He's reframed the question as if we're in the same position as everyone else. It isn't Telstra doing the rollout on their own network. Elsewhere he cites "$50 billion" was given to Telstra, this completely changes his NBN project economics
I mean, are the Germans idiots?  Are the British idiots?  Are the Americans idiots?  Are the Belgians idiots?  Are the Austrians idiots? [Citing irrelevant Authorities. These are incumbent Telcos working with their own copper to maximise their returns on their asset.] 
Why are all these other countries taking the approach I am describing? [Because they're different!]
Q: "Malcolm Turnbull, just to recap on the cost under the Coalition plan, how much will it cost?"
A: "Well in terms of how much it will cost to complete the project, $29.5 billion for ours and $94 billion for Labor’s." [No, that's only a 1 in 100,000 worst-case scenario. Not a meaningful figure.]
"In terms of what it will cost people, it will cost – our estimate is that the wholesale price, and of course this will feed into the retail price, will by 2021 will for the average connection be $300 less." [All the Coalition "estimates" are unreliable and highly biased.]
So from these examples (and they are only a few) you get to see the political speak that Malcolm Turnbull uses on a regular basis.

You may note that the 'debates' he has are not with the 'techs' - people who have the on-the-ground experience and insight into Australia's current copper system. They are with journalists, other politicians and business people. Apart from whatever research they can rustle up, this is not their area of expertise.

Through this Turnbull can exploit any lack of confidence or uncertainty these questioners/interviewers may have about the subject. It makes his ability to bluff and obscure important details all the more easily.

If he took on an experienced person with indepth knowledge of the systems involved (which he won't as they might question too deeply), then many interesting facts about the multitude of failings of even proposing an FTTN in Australia would come to light.

Until then, technical commentators & bloggers like I, will keep writing, as it's beyond MSM (Main Stream Media) to do the detailed research and analysis and present the facts as we can. Then you, the voter & customer, can make more informed decisions on which is the better, more appropriate NBN for you, Australia and our combined future.

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