Transcript – 2GB Sydney – 10 Jan 2011

TRANSCRIPT OF THE HON. MALCOLM TURNBULL MP

INTERVIEW WITH JIM BALL

RADIO 2GB, SYDNEY

Subjects: National Broadband Network; Brunswick take-up, Construction of Dams.

JIM BALL:

There’s an interesting story which has popped up only in the last hour or so regarding the National Broadband Network.  You’ll remember that when the Federal Government launched the NBN it was built on the foundation of a high take-up rate and certainly it trumpeted a take-up of 77 per cent of eligible premises taking up the network at its first four test sites. 

Yet today, we learn that the take-up is already starting to hit problems with the fifth site coming in dramatically below expectations.  The numbers are out for the Melbourne suburb of Brunswick and they show the NBN take-up there is only 45 per cent.   Remember that in order for the business model for the NBN to work, it needs a higher take-up rate – 77 per cent, something like that, or else the Government will back the $43 billion it is taking on in debt it is borrowing to pay for the network.  So to find out just what’s going on here – and I guess it’s a case of, ‘I told you so’ – Opposition Communications spokesman Malcolm Turnbull joins the program.  Good morning.

MALCOLM TURNBULL:

Good morning.

JIM BALL:

Now what can you tell us about this take-up in Brunswick?  It’s way below expectations.

MALCOLM TURNBULL:

Well it certainly is.  This is a very good test bed because this is a thoroughly urban area so it’s more representative of most of our Australian cities than many of the other test sites.   And what you’re seeing is that a lot of people who do have internet access now are not interested in taking up the NBN.  So it underlines the point that we’ve made, which is that the NBN is only ever going to be able to achieve significant penetration at all if competition is eliminated.  So the Government is creating a massive, Government owned telecoms monopoly.  And by eliminating competition – by over time decommissioning the copper network and preventing Telstra from selling broadband services over its cable network – it’s going to obviously, by reducing competition, ultimately result in higher charges for internet access. 

The other thing to bear in mind, too, is that the big promise of the NBN was that people would get higher speeds.  There’s been no case made or evidence made that there is any benefit from having a speed higher than what we can get now in many of our cities, at least, from ADSL 2+.

JIM BALL:

Well I was going to ask you about it.  Has there been any research done to see if people actually want higher than the broadband they’ve already got? 

MALCOLM TURNBULL:

Well Jim, the truth is that speed itself is of no use to you unless you can use it for some application.  

JIM BALL:

That’s correct.

MALCOLM TURNBULL:

If I connect your house with one terabyte per second speeds – the sort of speed you might get over a transcontinental cable – it would be of no use to you.  There’s nothing you could do with it.  Now the interesting thing is that when you look at the NBN business case or any of the other material, the applications they say will drive take-up are all about internet television.  It’s all about video, interactive gaming.  And yet we see right now that with this IPTV, providers such as Fetch TV which is one service that’s being rolled out right now, being provided over bandwidths of much lower speeds.  In fact, I think they only need four-and-a-half megs download speeds to deliver it.  So the big question mark is what is the use of all this extra speed at a household level?

JIM BALL:

Well, I was going to ask you about the household level.  Because any big business, hospital, learning institution, that wants this level of speed can get it already.

MALCOLM TURNBULL:

Well that’s true.  That’s exactly right.

JIM BALL:

So what the hell’s going on?

MALCOLM TURNBULL:

Well it’s difficult to know.  This is one of the most irrational, poorly thought out Government policies imaginable.  If we go back to the foundation: You’ve got to ask yourself first: what is the problem we are trying to solve?  Now does anybody believe that nowhere in Australia are there adequate access speeds to the internet?  The answer is clearly not.  So the issue had always been that there are some areas in the cities, some blackspots in the cities because of network architecture reasons which were poorly served and of course there are areas in rural and regional Australia which have been poorly served.  So a rational Government would say, ‘Okay that’s the problem – let’s set out to rectify it’.  Now we were doing that when we were in government. We had a fully funded scheme to roll out broadband in rural and regional Australia, the OPEL plan, which Labor cancelled after they won in 2007.

But putting that aside, say alright, let’s bring everybody up to the best standards in the city. Then you’d say, what is the most cost-effective way of doing that. What these guys have done, is rather than going about it in that rational way they’ve just said, we are going to replace, in it’s entirety, our entire telecommunications network, we’re going to junk the whole copper network and replace it all with fibre-optic cable regardless of the cost and regardless of whether it is needed or not.

JIM BALL:

That’s right. It doesn’t, I mean while you were talking I’ve just done a bit of a search on Google and it came up in 0.07 seconds. That’s pretty quick.

MALCOLM TURNBULL:

I’m sure. The fastest growing, by far, the fastest growing access technology to the internet of course is wireless and that’s been particularly driven by all the tablet devices.

JIM BALL:

And that’s the other thing. We’re going in one direction – fixed line – yet everything else is moving mobile and wireless.

MALCOLM TURNBULL:

Yes that’s true. It’s true except I’ll just make this one qualification. Everything is not going one way or the other. There are applications and circumstances where fibre to the premises, particularly for businesses and institutions, is necessary because you have a lot of users and a lot of demands for bandwidth. But the big bucks, the big dollars is in rolling out that fibre-optic cable to every household.

JIM BALL:

To the home as opposed to fibre to the node?

MALCOLM TURNBULL:

Yes, fibre to the node.

JIM BALL:

Well how did it get from $4.7billion or whatever it was for fibre to the node, to $43billion for fibre to the home?

MALCOLM TURNBULL:

Well apparently what happened was they had a tender as you know, for this fibre to the node. And just to explain that to your listeners, to our listeners here, the fibre-optic cable is the backbone of all modern telecommunications networks. And most of the big exchanges in Australia are connected to the internet through fibre-optic cable. But the ability to deliver broadband from those exchanges to your home depends on a lot of things and one of them is the distance from the exchange. So the proposition of fibre to the node, is in essence, to create a series of mini-exchanges connected to fibre-optic cable that were closer to peoples’ houses. But the big dollars is when you start bringing fibre, in effect reengineering or re-plumbing the telecommunications network of Australia. And it sounds grandiose, it sounds visionary and all of those things, but we live in a world of limited resources.

JIM BALL:

I was going to say, visionary.  With $43billion we could do some amazing stuff with $43billion.

MALCOLM TURNBULL:

Well how many billions are we going to have to spend in Queensland alone? We’ve got to remember that taxpayers’ money is a scarce resource. That’s why every piece of government infrastructure, major government infrastructure, whether it’s telecommunications network, or a railway, or a big freeway, or a damn or whatever, should be subject to a rigorous cost-benefit analysis and that’s why I get back to, this is where you get that irrational part of Labor’s plan, is that they refuse to do their homework and ask the fundamental question of what is the problem we’re trying to solve?

JIM BALL:

And of course, because they won’t do it the index of suspicion rises, well what’s your problem here? If you’re genuine about it, it wouldn’t matter what the infrastructure was you would do a CBA.

MALCOLM TURNBULL:

See this is the really strange thing. This is where you get the dysfunction and the peculiarity of this Labor government. Because at the end of the day nobody cares much about logistics and how things get to them as long as they arrive. We don’t care whether our loaf of bread got to the shops on a truck, a train, a dirigible, a barge; you know people don’t really care.

JIM BALL:

As long as it’s there.

MALCOLM TURNBULL:

As long as it’s there. So the political promise, the political objective surely should have been to deliver everybody access to high speed affordable broadband. And as to the technology, let’s not be dogmatic about that, let’s do it in the manner that is most cost-effective. And that’s the approach I would take if I were responsible for this and it’s the approach I will take when we are returned to government.

JIM BALL:

One other thing, you were Water Minister in the Howard Government. Okay, we got lots of water its all going south what are we going to do about it? Tony Abbott said on this program some weeks ago and again in the last few days about ‘dam-phobia’. Are you for or against Dams?

MALCOLM TURNBULL:

I am neither ideologically nor hydrologically opposed to dams. There are people who say all dams are bad – that’s crazy. People who say all dams are good – nobody says that but if they did they would be equally crazy. The thing about dams is that they are just – if I can bring one thing to this debate it is being hopefully rational and objective about it – dams are a very useful, very important critical vital part of our water management infrastructure but they have a cost.  They have a cost in terms of construction, they have an environmental cost and of course they take up a lot of real estate. So for example the Queensland Government under Peter Beattie wanted to build a dam up on the Sunshine Coast, up behind Sunshine Coast at Traveston Crossing. Now that was a bad site for a dam. The amount of productive farm land it would have put out of commission, the cost of moving the water from there to where it was going to be used, all of that meant it did not stack up. On the other hand there are dam sites that work very well. It is not an ideological matter it is a question of just looking at the –

JIM BALL:

The locations, what you want it for and so on, I understand.

MALCOLM TURNBULL:

Just make one point though –

JIM BALL:

We’ve got 10 seconds –

MALCOLM TURNBULL:

Never forget, there are two important things to remember about water. Firstly a cubic metre of water is a 1000 litres and it weighs one tonne.  Water has a very low value to weight and to volume, so it’s very expensive to move around and to store.

JIM BALL:

They are doing it in Libya.

MALCOLM TURNBULL:

Yes I know and its costing a fortune. I don’t think Gaddafi is the model.

JIM BALL:

They’re doing it in Western Australia from the coast to Kalgoorlie, 600 –

MALCOLM TURNBULL:

You see again, they did that 100 years ago.

JIM BALL:

Yeah early 1890s.

MALCOLM TURNBULL:

They did because there was no water in Kalgoorlie. They needed water and that was the cheapest, and indeed it was the only way, to get water there at the time. Another thing to bear in mind is that Australia is incredibly flat and there are in many parts of the country you struggle to find dam sites. The perfect dam site is like Warragamba dam – big deep valley which is narrow at one end and you can put a plug in it.

JIM BALL:

Sure I am right out of time Malcolm but thank you so much for coming on the program.

MALCOLM TURNBULL:

Thanks a lot.

[ends]