10 August 2010

Why the Coalition telecommunications policy has failed

The Coalition policy on broadband is pathetically inadequate. It shows they don't understand the wider issues in this sector and its ramifications for the economy going forward. It shows their political contacts and general savvy is non-existent. It is an indictment of the lazy and stupid Tony Smith.

This policy area is like a prism through which you can view the general stupidity, laziness and lack of readiness for the Liberal-National-LiberalNational-CountryLiberal Coalition.

It also shows why the journosphere are unable to explain complex issues to voters, and hence that their whole fourth-estate function in the political system is one they've pretty much forfeited. The issues in telecommunications in Australia have remained pretty constant for some years now and even the most tech-illiterate journalist should have a checklist against which to judge the Coalition against the issues.

The Coalition have failed on telecommunications policy because:

  1. The prime challenge in Australian telecommunications is to stop Telstra charging first-rate prices for third-rate services. Telstra has a chokehold on the entire ICT industry in this country: a bit like the wharfies union had over the import and export of goods but much, much worse in terms of macroeconomic impact and opportunities foregone. To address this, even in a tokenistic way, is to get the prime policy challenge facing this sector. Details of the tech industry could be forgiven if the number one issue was squarely addressed. To fail to address it, to not regard it as an issue - or even to bleat about tall poppies - is to have a firm grasp on the absolutely wrong end of the stick.

  2. "... the Coalition will take real action to deliver them over an affordable high-speed broadband network using the best mix of optical fibre, HFC, wireless, DSL and satellite". No, it won't. The "best mix" judged by whom, based on what, for whose interests? DSL, for goodness sake! The first paragraph: starts with bombast and ends with a hodge-podge. This policy is stuffed from the start.

  3. There is no support for this policy from participants in the industry. This is because Tony Smith has been too busy knocking off leaders and perfecting his eerie Peter Costello impersonation to consult with the industry of which he would be minister. His policy would have more credibility, and the party coffers might even have more money, if Smith had gotten out and listened rather than talked nonsense at people who know nonsense when they hear it. If you're going to sell your soul, to Telstra or anyone else, at least demand top dollar for it.

  4. "The Coalition’s plan will deliver uniform nationwide availability of high speed broadband". No, it won't. It can't. Any market-dependent solution like this one will mean that the CBDs of Sydney, Melbourne and Canberra - possibly also Perth and Brisbane - will have broadband as fast as anywhere in the world, much faster than in [insert remote location in Australia other than a mining site here] or [insert low-to-middle-income suburb/town in a marginal seat here]. The proposed regulator isn't strong enough to even out any disparities nor offer any incentives that have not already been offered for telcos to cover vast distances where customers are few, far between, and have a raging sense of entitlement.

  5. "... high-speed networks capable of delivering from 100 Mbps down to a minimum of 12 Mbps peak speed ...". Where did those numbers come from? On what grounds are we limited to this extent?

  6. "We will emphasise affordable broadband, with all such premises wherever they are in Australia able to receive services at prices comparable to those for similar services in metropolitan Australia. There will also be improved satellite delivered broadband services for the last three per cent". No there won't. That technology doesn't exist, it won't be developed by a government more keen on cutting debt and taxes than it is on broadband delivery.

  7. "The Coalition will cancel Labor’s reckless and expensive National Broadband Network. The NBN would be a $43 billion taxpayer funded white elephant. It would do nothing to deliver lower prices – it just substitutes one monopoly for another". It removes the monopoly provider of wholesale telecommunications infrastructure from the retail market, and means that the former need not be skewed in favour of narrow commercial interests of the latter.

  8. "The NBN gives no priority to those who do not get an adequate service today – in fact Labor’s plan leaves them waiting up to eight years before they see a change". True enough. The fact that Telstra and Optus aren't racing ahead of this slow-moving elephant shows the market failure that Coalition policy (such as it is) fails to address.

  9. "... the Coalition’s plan will stimulate a vibrant, private sector-based broadband market, with Government involved to encourage competition and ensure services reach all Australians". The only way government can "ensure" this is if it gets into the provision business itself, or throws around cash like - well, like the Rudd government did, really. We have a private-sector based market already, and the service we get is inadequate due to regulatory failure - a failure the Coalition seems keen to perpetuate.

  10. "Central to the Coalition’s plan is a $2.75 billion investment (with the expectation of leveraging at least $750 million in additional private sector funding) to create a nation-wide competitive fibre optic ‘backbone’ by 2017". An amount like that will be cut in the name of debt reduction, tax cuts, porkbarrelling or a combination of these. No part of this policy references any sort of broader vision for a Coalition government: it's a turkey waiting for a Coalition Christmas.

  11. "Our backhaul plan will ensure lasting competition and stimulate new private sector broadband networks being built to connect with the new competitive backhaul network". Again, it won't be competitive because it will be a publicly-funded, bureaucratically-administered monopoly. Policies are doomed when they double back on themselves like that.

  12. "Our plan will serve the priority areas quickly. We will identify the areas where Australians are underserved – particularly outer metropolitan areas and rural and remote areas – and ‘fill those gaps’ as quickly as possible ..." - it's too late for that. You should know where those areas are, and be hammering this policy in those areas long before now. It's too late now. That message has been buried in budgie-smugglers, wandering decimal points, boofhead failed leaders, and all the other chaff and fog one finds in an election campaign.

  13. "Based on industry trends and consultation, we expect that wireless networks will play a central part – and we have provided sufficient funding to roll out wireless networks to achieve our stated objectives". Nobody who has the choice between optic fibre and wireless favours the latter. Look at television: cable television is far more efficient, diverse and economical than free-to-air. It's too late for all this waffle about "industry trends and consultation" (shoulda done that already, so you could be more specific and credible when it counts - now).

  14. "Our plan will establish a commercial and technical platform for much greater fibre penetration over coming years, particularly by stimulating demand for broadband services and in turn stimulating investment by the private sector (building on government contributions such as new and more competitively priced backhaul.)". Again, no it won't. If "fibre penetration" (!) was so important it wouldn't be just another option alongside wireless, HFC, two tin cans on a string, etc.

  15. "The Coalition will establish a National Broadband Commission (NBC) to implement our broadband plan. The NBC will build and publish a detailed National Broadband Database". Great, another government agency with an acronym, whose role is to build a database. Can't wait.

  16. "Funding for the Coalition’s broadband plan will commence in our first year in government, and we will invest almost $2 billion in the forward estimates period". $2b on the never-never: because it's not linked to anything, because industry is lukewarm about it and because the temptation to cut big unintegrated wads like that out of the budget will be overwhelming, we may fairly call bullshit on this whole policy.

  17. Well done in piling on to Conroy's Filter (mainly for fiscal reasons), but only after Conroy himself had canned it. The sheer vacuity of this policy undoes that good work. Tony Smith is a lightweight, Joe Hockey must surely have his measure by now (as must Andrew Robb, who was only at Smith's announcement because the journosphere would ignore it otherwise).

  18. The broadband policy is not integrated with, and in fact largely negated by, this. If you're going to present the WWW as some sort of reverse sewer in a policy written by ninnies and robbed of any real impact (when will you provide these things, to what standard? Did you seriously imagine anyone was going to be impressed by a Ministerial Advisory Committee on Social Networking?), it undermines the idea that broadband has a vital role to play in the future of our economy, our society, our nation.

Admittedly, the idea of the importance of broadband is not one the Coalition has put forward, so I suppose it can't be held responsible for that. Yet, it is the fact that it accords broadband no importance (except as a threat), and does not integrate it with other infrastructure, and won't stand up to Telstra - this is why the Coalition policy has failed, why it must not become government policy, why its spokesperson is unworthy to govern the nation or even be considered a representative of it. Better industry analyses of telecommunications and the Coalition's failure are available from here and here.

You can't fatten the pig on market day - but if the Coalition knows anything it must surely know that. Get some respect for policy or government will slip from your grasp: this is the lesson the Coalition have finally learned in NSW and what the Feds have unlearned, in pursuit of God knows what. Get a basic understanding of the issues and the industry, and good policy and politics will follow.


  1. Wow - you gave their policy much more thought than they did, and it deserved.

    Reality has been restored - Libs to lose.


  2. An excellent post Andrew - a line by line take down - the kind of thing you wonder why the hell didn't they do that themselves?

    But then you give us the answer on Smith, and Tony Abbott last night on the 7:30 Report gave us his.

  3. Jason Wilson11/8/10 1:10 pm

    I'm aware that you've long taken a dim view of Tony Smith's capacities. But as of last night, it looks like he's the means by which Abbott may have been found out. Yesterday's press conference was the prelude to the disaster on the 7:30 Report, and today they've sent Andrew Robb out to do the talking on this. For all his many faults, you can't imagine Conroy having to have his hand held whilst dealing with the core of his portfolio responsibilities. Your exposition is good, because it shows clearly that the Coalition fail to grasp anything from point 1 down in this area. Their approach is a real puzzler - are they trying to get Telstra shareholders on side.

  4. Thanks Kymbos.

    Grog: they used to, I was one of them. Replaced by PR dollies, unfortunately. When you get to the point where 'you can't polish shit' they get lost a bit.

    Jason: I think Minchin set up this idea of Telstra shareholders as a Liberal redoubt but I can't see any evidence for it myself.

    Smith compares to Peter Shack, the Shadow Health Minister who admitted that he had no policy for the Liberals to take to the 1990 election. Compare him with Richard Alston, who was highly effective in Opposition in articulating a future for ICT, but was well and truly co-opted once in office.

    This mindset of protecting the Telstra monopoly and "I'm not a tech head" is one of those holdovers that must go before the Libs can get back into government.

  5. we haven't always agreed, andrew, but i am convinced our country would be the better for having people like you in charge of the liberal party.

  6. John Bignucolo7/9/10 5:08 pm

    Credit where it's due Andrew, for you picking up on what a dog of policy Tony Smith dragged into the election.

    The Coalition's broadband policy turned out to be a crucial determinant in Tony Windsor's and Rob Oakeshot's decision to support the ALP in the House of Representatives.

    Tony Smith, and everyone in the shadow cabinet who signed off on the policy should have a good hard look at themselves.