Tuesday, April 7, 2009

Newspoll ALP 58 - LNP 42

Today's Newspoll was conducted on over last Friday, Saturday and Sunday - a period when the media and the Liberal Party was doing a full court press on Rudd's abuse towards a hostess on the PM's plane back in January.

The result? Rudd's preferred PM rating went from 65% to 67%. His Satisfaction rating went from 63% to 68% - the highest it's been all year.

And Turnbull? Well only 18% think he'd be a better PM; and 42% are dissatisfied with the job he is doing, compared with 39% who are satisfied. Yep more people are dislike what he is doing than like. That pretty much means the end is nigh.

I expect over the next few weeks the name of Joe Hockey will start getting more and more air. Once they start asking in the newspoll who would you prefer as opposition leader Turnbull or Hockey, that will be the sign for the rumblings to get loud.

Hockey won't beat Rudd - in fact in QT, Rudd likes it when Hockey asks him a question; but the Liberal Party will be getting desperate, and like a drowning man, they'll clutch at a snake if they think it will save them.

They'll be even more desperate after today's announcement of the National Broadband Network. Having gone to tender for Fibre to the Node (FTTN) at 12mbs , the Government decided none of the bids were any good, and so decided bugger, it all - we'll do it ourselves, and instead make it Fibre to the House (FTTH) at 100mbs.

And instead of $4.7b, lets spend $43b over 8 years.

It's absolutely huge. It's absolutely staggering. It's as big as it gets.

First some reactions from the industry. The owner of internode, Simon Hackett, went on the "whirlpool forum" (a known IT blog) and wrote this:

My thoughts:
- It'll be ten years once they run the obviously required [tender] process first

- It reads like my keynote slides for the last few years – FTTN at $4.7bn doesn't cut it, do nothing or have the guts to build FTTH at more like $40bn.

- Wholesale only, separate to Telstra (means not touching the copper network – hence no grounds for Telstra to stop it or delay it)

- Government majority owner with intended privatisation 5 years after building – which I think is exactly the right idea

- Leaves existing copper network in place, leaves existing ADSL2+ market and competition un-impacted – meaning we've got many more years of useful ADSL2+ network building ahead of us in parallel to the emergence of the new network, to which we'll have access too, on an equal footing with everyone else.

- By avoiding the copper network, it also avoids regulatory changes – the existing access regime can continue unchanged while the new network is put in, in parallel.

- If they take industry advice and build the new network 'outside in' – fixing blackspots first, installing where ADSL2+ is already running strongly last, then everyone wins, because people with no broadband get it, while people who already have broadband can use that ADSL2+ competitive landscape in the meantime, and people who have invested in that landscape can recover that investment before the new network renders it obselete. But even then (like dialup) the old stuff will stay around for ages too – and noone loses... (!)

- I'm gobsmacked. If they do what they promise, they've actually got it right, and we might just turn into a broadband front-runner country ten years from now... after all.

Sounds pretty good.

Here's Optus:
Optus' head of government and regulatory affairs, Maha Krishnapillai, told BusinessDay that the shock announcement was "absolutely the best case scenario on every level," as it will allow the Government to completely bypass Telstra's infrastructure and run fibre directly into buildings. It was believed before today's announcement that fibre would be run out to street-side nodes, but that Telstra's existing "final mile" of copper wire would be necessary to access homes.

"It really picks up all the recommendations of the last decade and allows us, and others, to compete and invest on a level playing field, because the fundamental advantage Telstra had in the last mile of copper is gone." Mr Krishnapillai said.

Ok, Telstra's gotta hate it then right?

We look forward to having constructive discussions with the Government at the earliest opportunity. There is a lot to absorb in the Government's announcement and we will consider every aspect in detail," he said in a statement.

"We will work with the Government to assist with the implementation of its strategy, but will remain at all times committed to ensuring the best interests of our shareholders, employees and customers.

Ok, not as full of love, but given Telstra's history of criticism, it almost counts as gushing.

Now the press. Bernard Keane from Crikey used to work in the Department of Communications, so he knows a bit about the issue (in fact more than any other political journalist):

Huge? Massive? Historic? All of that, and more. This is an announcement that will roll through the ICT industry, over the media industry and across the Australian political landscape.

Kevin Rudd may not be too keen on tough decisions, but he doesn’t baulk at expensive ones. The Government has reversed the last 20 years of communications policy, hitting the reset button on infrastructure ownership and plunging completely into telecommunications infrastructure.

There are plenty of problems, but none are immediate. In the current investment climate, government-guaranteed infrastructure bonds are likely to be popular, so there’ll be no difficulty attracting investors. The eight-year build might frustrate voters, but the network can get off to a flying start if owners of unused fibre participate, taking an equity stake in exchange for providing existing networks.

The massive company that will result from the rollout might need the same sort of restraint as Telstra, but it will be strictly confined to wholesale services, removing the current Telstra problem of anti-competitive incentives. The risk of taxpayers losing money on the venture won’t crystallise, if it ever does, until years into the future -- not merely after 2010, but probably after 2013 and probably 2016 as well.

Now an economists view. This is Joshua Gans who is an Economics professor at Melbourne Uni writes:

The outcome of the broadband network was announced today and I must say that I almost fell off my chair with delight. If I am reading the news correctly, the government is going to do it themselves with a fibre to the home network that will put Australia right up there with the world leaders in this space.

It was only in November last year that I proposed this very same policy in AFR opinion piece. The benefits include (a) avoiding the regulatory morass that is Telstra; (b) providing not only competition in broadband but also competition across the whole of telecommunications; and (c) a great way of providing a fiscal stimulus in anticipation of the coming recession.

All I can say is wow.

Ok enough gushing. Bernard Keane perceptively notes the politics of the issue:

.... you get the feeling this is the sort of announcement many in the ALP wanted to make while they were in Opposition, but Government ownership was so unfashionable it had to be reshaped into a joint public-private initiative. Now, the private sector is in retreat and big government projects are flavour of the month. It also complements the Government’s response to the recession. 25,000 jobs a year in construction, Rudd noted. 37,000 at its peak, constructing a network to enhance Australia’s productive capacity.

He's spot on - most in the ALP would be feeling all warm and fuzzy by this big infrastructure spend - it's Ben Chifley all over again!!!

Now let's see what Malcolm Turnbull says. Surely he has learnt his lesson and will bide his time before nailing his colours to the mast? Nope:

Opposition Leader Malcolm Turnbull has accused Mr Rudd of plunging the country further into debt and says he is trying to cover up the fact the tender process failed.
"We have a Prime Minister who has always got a political strategy but no economic strategy," he said.
"He hasn't got a head for figures, he's got a head for headlines and that's all.
"And that's why we're running into tens and tens and tens of billions of dollars of unsustained debt."

Sigh. Once again he gives himself no wriggle room. He's attacked it straight out the gate. And now he's locked into opposing it. Dill.

Here's what he said back in February about the Government's last stimulus package:

You know what someone said to me just a little while ago, very wise point. He said, imagine if 60 years ago Ben Chifley and Bob Menzies had sent everyone a cheque for 50 pounds instead of building the Snowy Mountain scheme.

Well Malcolm, they now are building the Snowy Mountain Scheme of the 21st Century, and you're opposing it while sitting on 18%, you might want to ponder on how wise that is.

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