Tuesday, August 13, 2013

Turnbull and Albanese talking NBN on Lateline

Turnbull wants to punch the Internet in the face. And Albo too.

Malcolm Turnbull is far more knowledgeable about his communications brief than is Anthony Albanese, having not only had years in the portfolio but direct previous business experience during his time at Ozemail, so last night's Lateline NBN debate was always going to be lopsided in terms of detail. Emma Alberici tried to keep things relatively top level - she clearly struggled to do the sums that one gigabit is a thousand megabits - which was always going to benefit Albo. When Turnbull did try to nail the debate on detail, however, he exposed the underlying flaw with the Coalition's NBN policy: that it is based on an outdated view of the Internet which fails to address the needs of today, let alone the much-mentioned future.

I am old enough to have had several careers, one of the early ones being as a technology journalist in Sydney in the late 1990s as the first Internet boom happened. Back then, tech companies would sometimes invite journalists to general briefing sessions to improve their knowledge base, and subtly push their point of view on how a certain part of the industry should be reported. Telstra was one such company who had the funds to do this, and they invited me and many other journos along to some talks that their boffins delivered. I remember Geoff Huston, in particular, giving a presentation on carrying Internet traffic over frame relay, and as I watched something became clear to me: Telstra's strategy was to nobble the Internet.

This was understandable from their commercial point of view. Back then, they pretty much carried the entire Australian Internet across their networks. The AARNET section, pioneered by Huston and paid for in full by the government through the universities, wasn't the problem. Businesses paid through the nose for closed virtual circuits (CVCs, more on those later), so they weren't the issue either. The rapidly growing private version for everyday Internet users at home was the problem. It was threatening to cost Telstra a lot more money than they were making back in revenues in the short term, as they invested in hardware with the resultant profits skimmed off the top by consumer-facing retail ISPs. The more infrastructure they built to meet the influx of traffic demand, the worse their balance sheet looked, the worse their newly floated share price looked, and the worse their executives did in performance reviews. Media pressure was ongoing not to charge monopoly rents on third party usage of their infrastructure. Telstra employs a lot of bean counters, and the beans added up to an inescapable conclusion: the Internet was a cost centre to be minimised as much as possible.

To put the technical situation in readable terms, one only has to look at Geoff Huston's blog, where he wrote a long post about the competing NBN policies which contained this gem, which was used in a different context there but also applies to what I'm talking about:
This always strikes me as such a strange business model. It's like building a slow car by taking a specialised high speed racing car and bolting on additional leaden weights in order to slow it down, all to charge the customer a lower price than the price of the original high speed car!
This was not Geoff's fault of course, but his talk, and the argument we subsequently had about it, firmed in my mind the view that this was an untenable situation. Unfortunately, John Howard's association with the Telstra float meant that he was hamstrung from changing the situation even if he had wanted to. He had a choice between propping up Telstra's share price on one hand, and reforming the telecommunications sector on the other, and he chose the former to the detriment of the industry and consumers. Of course he was going to prefer succouring those middle class suckers whom he conned into buying Telstra shares. This policy of abandoning any thought of serious telco reform to protect Telstra shareholders continued all through Howard's long reign, and has become ingrained in the Liberal Party's culture.

It was only with the advent of the NBN concept that a solution to this impasse has been found. I will cover the NBN itself in more detail in another post, but for the purposes of characterising Turnbull's argument in the Lateline debate last night, I related the previous history to illustrate where he is coming from when he starts talking about 1 Gigabit per second CVCs costing $20,000 per month. Turnbull knows his stuff, but his mindset came from that era in the late 1990s when the Internet was seen as a cost centre to be squashed into a box devised by serious telcos who were embarrassed to have to deal with such riff-raff.

John Gilmore once said the Internet sees censorship as damage and routes around it, but telcos see the Internet as viruses and try to punch it in the face as if they are Agent Smith and the Internet is Neo. Turnbull is on the side of the losers in that debate, and it was lost twenty years ago. The copper wires of the POTS are those leaden weights that Huston talked about, and we as consumers demand to drive those fast cars at full speed whether the Libs like it or not.


  1. You fart idiot, Monster.

  2. Get a dead dog up ya mOnts.

  3. Again, a devastating critique by the anonymous coward.

  4. wow Catallaxian repartee at its best.

  5. Fuck off Homer. Go talk about the Nazis at your own unread blog, you moron.

  6. funny enough plenty of you lot read my blog!!

    and it goes bazookas on Friday!

  7. Better to focus on the issues and improvement of NBN.