Quigley defends NBN investment

NBN Co chief executive Mike Quigley has blasted the Coalition's alternative to the ALP's National Broadband Network in a fiery speech at an ACS (Australian Computer Society) luncheon in Sydney today.

Quigley addressed the limitations of copper, HFC and wireless networks and made no apologies for entering the political debate, outlining the social and economic reasons why Australians should vote for a national fibre-to-the-home network.

Here's the speech in full:

Mike Quigley, 2010 Charles Todd Memorial Oration

It is an honour to be here today giving this Charles Todd Memorial Oration in the company of many of Australia's telecommunications leaders. When, many months ago, I accepted the invitation to speak here today little did I know that it would be just a few days before a Federal election, the outcome of which will have a profound impact on our industry.

But here I am, the CEO of the company charged with building the NBN, which as we all know has become rather a hot political issue. So, I was left with the question, what to do?

My conclusion was to take a deep breath and just tell it as I see it - without fear or favour. This is what I did just last week when we made the announcement that we would be providing a 1 Gbps product.

We had been working on this for quite some time and I saw no reason not to follow our usual practice, which was to make the industry aware of our conclusions. We are continuing to do this. So we released our Product Overview documents for our Fibre, Wireless and Satellite products [PDF] yesterday.

Tomorrow we will be releasing a more detailed 80-page technical Product Description document for our Fibre product.

I was also conscious of my responsibility to try to ensure the public debate surrounding the NBN is as fact-based as is possible given the current circumstances. I came out of retirement for this project because I believe this is the right way to deliver a national broadband network for Australia.

So, I plan to use this speech to outline:

Why it's better to invest $27 billion rather than spend $6 billion
Creating a monopoly helps competition
Why a ubiquitous broadband network isn't just equitable, it's essential for the delivery of social, economic and productivity benefits
Why wireless can't, on its own, serve all our long term broadband needs but a combination of wireless and fibre can.

In fact, there is an even more fundamental point I would like to address - the veritable elephant in the room, in fact, the "white elephant" in the room.

Some have claimed that the FTTP network would end up not being used because of the growing capability of mobile networks. But why then are some very large and very experienced commercial Telcos investing in fibre architectures, both FTTN and FTTP.

I am talking about some of the biggest telcos in the world such as AT&T, Verizon and DT. They all have large mobile networks yet they have heavily invested in fibre access.

Even more interestingly, I heard just earlier this week, from a Chinese equipment vendor that China Mobile, the world's largest mobile operator, is now looking at deploying FTTP.

Are all these Telcos wrong about the future of FTTP?

These are some interesting questions, but first I would like to return to decisions made 140 years ago to build the Overland Telegraph, which was supervised by Charles Todd.

The Overland Telegraph cost £480,000, equivalent to just under a $1 billion in today's terms. The total cost was met entirely by the tax-payers of South Australia and was equivalent to 60% of the state's annual budget.

This was the first of the three major investments that have been made in Australia's fixed line telecommunications infrastructure.

The second was made just after the end of WW2, when the PMG committed £42 million to rollout today's copper Customer Access Network. In today's dollars this was a commitment of around AU$10 billion. Even more extraordinary is the fact that in 1950 Australian Government public debt was at about 80 percent of GDP, more than 10 times the level of today's public debt.

The Overland Telegraph and the copper CAN, built using public funds, were great public investments that have paid for themselves many times over in social, economic and productivity benefits.

Let's have a look at what was happening 60 years ago, when this decision was made. This is compliments of the Telstra History Museum. The third major fixed line investment was attempted by the private sector. I am referring of course to the investment in HFC technology by two private companies.

We all know that the infrastructure was duplicated as the two companies chased each other up and down streets until they both called a halt to their rollouts. In terms of the utilisation of scarce capital, this multi-billion dollar duplication of access assets was not an ideal outcome.