NBN the key to power after Australia’s dead-heat election

When Australia’s Labor Party-led government announced in April 2009 that it was planning to build a National Broadband Network – at a time when the party was still massively favored to win re-election this year – party members could scarcely have dreamt that the NBN would end up being the slender thread that might just help them retain power.

September 1, 2010

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By Tony Brown

When Australia’s Labor Party-led government announced in April 2009 that it was planning to build a National Broadband Network – at a time when the party was still massively favored to win re-election this year – party members could scarcely have dreamt that the NBN would end up being the slender thread that might just help them retain power.

But that’s exactly how things have turned out after an extraordinary drop in public support for the government saw the August 21 federal election result in a hung parliament, with the Labor and Coalition parties tied with 73 seats each and needing to win support from four independents MPs – three of whom are from rural constituencies – to secure a working majority.

There are numerous reasons for the collapse in public support for the Labor government over the past six months, but two of the biggest criticisms leveled at it have been that it lacked the political courage to make major decisions and that it had no core convictions around which it formulated policies. These were most obviously illustrated by the dumping of its planned emissions-trading program in April, a move that caused fury among environmentally focused voters and triggered the collapse in support for former Prime Minister Kevin Rudd that ultimately saw him replaced by Julia Gillard in June.

How ironic, then, that the government’s only piece of genuinely visionary and bold politics – the creation of a A$43bn ($38m) NBN, offering FTTH connections to 93 per cent of the country’s homes – might prove to be the policy that enables it to fight a second term, albeit as a minority government.

The cliffhanger changes it all

So, how did the NBN suddenly become the central issue in a country where telecommunications policy has never before appeared even remotely on the main agenda of either major party at election time?

First, the “rush to the middle” of the Labor Party and the opposition Coalition parties left few substantial policy differences between the two parties on the key issues, such as the economy, immigration and education. As a result, the rollout of the NBN was one of the few policy areas where clear blue water existed between the parties, and it therefore attracted far more media interest than any telecoms issue had ever received in a federal election campaign.

Then, of course, there was the result of the election itself, which means that both major parties need to somehow persuade the three independent MPs from regional areas – Tony Windsor from New England, New South Wales; Rob Oakeshott from Lyne, New South Wales; and Bob Katter from Kennedy, Queensland – to help them form a majority.

All three independent MPs have long been huge critics of the existing telecommunications infrastructure in their electorates and rural Australia in general, claiming that the quality of rural telecommunications has plummeted since Telstra’s privatization forced it to focus on profits rather than quality of service.

As a result, all three independent MPs have been enthusiastic backers of the NBN project, with the maverick Katter – although socially conservative – viscerally opposed to allowing the “privatization” of rural telecoms services to continue.

Abbott left in a nasty wedge

All of which leaves Coalition leader Tony Abbott in a parlous position, given that he ran much of his campaign pledging to “end Labor’s waste and debt” and scoffed at the creation of the NBN.

During the campaign, Abbott not only doubted the government’s ability to successfully roll out the network but also described the NBN as a “white elephant” project that would be superseded by superior wireless technologies.

In its place, Abbott proposed a A$6bn broadband plan that would provide a government-built fiber-optic trunk network to serve metropolitan areas, enabling private operators to build their own last-mile FTTH/B connections, and would use wireless broadband to serve regional and rural areas.

The Coalition plan was immediately denounced as a complete turkey by many local industry analysts, who pointed out that it did not address the crucial problem of last-mile fixed-line access because it left Telstra in place as a monopoly network operator. The plan also did not provide details about what spectrum would be used for the planned mobile broadband services, what technology would be used to provide the services and how many transmission towers would need to be built – and by whom – to facilitate the rural mobile broadband service.

Abbott himself hardly helped matters by putting on a cringe-worthy performance on the influential 7.30 Report in prime time on ABC TV, where he struggled to explain the technical details of the Coalition plan. At one stage, interviewer Kerry O’Brien even had to explain the concept of peak download speeds, with Abbott eventually pleading: “I am no Bill Gates. And I don’t claim to be any kind of techhead.”

However, now that there are three rural independents to be wooed, Abbott has had to suddenly readdress the issue and concede that he would be willing to negotiate with the independents on the issue of rural broadband.

It’s either the whole pie or none at all

The problem is that having so vigorously attacked the NBN as a huge waste of taxpayers’ money and even – mind-bogglingly – claiming that FTTH would soon be an “outdated technology,” Abbott will find it difficult to reach a compromise deal with the three independent MPs.

The key attraction of the NBN – and one that helped Labor retain several regional seats, such as the traditional bellwether Eden-Monaro, New South Wales – is that it is the first piece of genuine national infrastructure that does not short-change regional areas. The NBN will offer the same 100Mbps connectivity to the city slicker in Bondi Beach, Sydney, or Toorak, Melbourne, that it does to the small farming towns in New South Wales and Queensland that are represented by the three independent MPs.

As a result, it is hard to envision how the Coalition can offer anything short of the full NBN that will keep these independents happy, not least because the NBN – no matter its flaws – represents a concrete plan and commitment to providing rural areas with high-speed broadband.

By comparison, the Coalition plan is really no more than a vague list of policy preferences that leaves much of the heavy lifting to private players, which have little commercial interest in providing rural telecoms services. And it is hard to see how the Coalition can put together a serious plan in the weeks before the new government will be formed.

Moreover, although Oakeshott and Windsor have made public comments about potentially working on a new NBN plan that incorporated a greater wireless segment in order to lower the overall cost of rollout to rural areas, both MPs will be aware that diluting the NBN in such a way would be hugely dangerous from a political perspective. The NBN would provide equal access to households, and rural and regional voters will simply not accept funding a network that provides high-quality FTTH connections to urban areas – already served by HFC/DSL – but provides them with wireless broadband services offering variable quality.

As a result, the three independents – although serving notionally conservative electorates – will find it difficult to return home with a deal that dilutes the NBN with a significantly increased portion of wireless connectivity, because rural voters have already been promised FTTH connectivity and will not be happy if it is replaced by a wireless offering that remains more theoretic than actual.

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