By David Braue

Photo: Not even Malcolm Turnbull's Strategic Review can change the reality of the NBN. (AAP: Dean Lewins)

We knew before today that the Coalition's NBN plan would cost much more than claimed, and that the odds were stacked against its easy implementation, writes David Braue.

After six years of attacking Labor's National Broadband Network (NBN) rollout in opposition, the reality check handed to the Coalition about its own alternative policy has substantially rephrased the entire conversation about the future of broadband in Australia.

In presenting the long-awaited Strategic Review into the current state of the NBN, Communications Minister Malcolm Turnbull said the review marked "the beginning of the era of truth on broadband, and the beginning of an era where we will have facts to work with, objective analysis instead of political spin".

It's quite a claim since in opposition Turnbull was, in my view, a master of political spin, engaged in a ruthless smear campaign against Labor's fibre-to-the-premises (FttP) rollout while promoting a less technically-capable alternative NBN built on fibre-to-the-node (FttN) technology that, among other things, requires the government to somehow gain control of Telstra's century-old copper phone network.

The Strategic Review's revelation that the Coalition had seriously underestimated the costs of its alternative policy going into the election - and made rollout promises that it can not deliver - made the review a Pyrrhic victory for Turnbull, who had previously concocted a worst-case scenario putting Labor's version of the NBN at up to $94 billion.

The reality is much humbler - $73 billion if the current FttP rollout is continued, versus $41 billion for the Coalition's mostly FttN model. Factor in potential financial and social returns, and it's not even clear that the Coalition's option represents the best value-for-money option.

Yet behind the headline figures is an interesting story you may have missed, which was played out on the pages of Fairfax Media newspapers and specialist telecommunications site ZDNet Australia, in which I processed and published NBN Co's unadulterated advice to the incoming government in small pieces over the last fortnight.

This advice - which was prepared by NBN Co during the caretaker period to help the now Department of Communications prepare its 'blue book' incoming government brief for Turnbull - was the first formal evaluation of the Coalition's policy and spelled out in some detail just how many challenges the Coalition's NBN model would present.

It was leaked after Turnbull resisted repeated calls to publish the blue book, and the Department of Communications has knocked back repeated freedom of information requests for its release - even in redacted form.

After my stories based on the leaked document began appearing, Turnbull continued to defy calls for the release of the blue book - and said that the NBN Co advice was not part of the blue book.

Just to recap: the advice was prepared by NBN Co for inclusion in the blue book, cleared by its board and, it would be assumed, delivered to the department for inclusion in the blue book. If it did not eventually make it into the blue book, that could only be because either the new minister, or someone in the department, had instructed that it not be included in the incoming government brief.

In other words, the expert and objective opinion of NBN Co - whose over 3,000 staff include some of Australia's most talented telecommunications engineers - was deemed to be so politically tainted that it did not merit presentation to the incoming minister. Turnbull, whether by design or by what we might infer, preferred to make his own truth about the NBN.

As you read through the NBN Strategic Review, it's important to also consider the advice that was given to Turnbull by NBN Co's experts as they sought to paint a realistic portrait of the challenges facing the Coalition in its construction of a mostly FttN NBN.

The NBN Co knew months ago that the Coalition was "unlikely" to make its 2016 deadline for delivering 25Mbps broadband to all Australian premises, and would struggle to meet its 2019 secondary deadline of boosting this to 50Mbps on 90 percent of fixed-line services.

In response to the Strategic Review announcement today, the Shadow Minister for Communications, Jason Clare, was quick to condemn the timeframe blowout as an indictment of a government that had made grandiose promises before the election that it was showing it couldn't keep. Yet that's only the beginning of what became a stream of stories highlighting different aspects of the NBN Co advice.

Much of that advice is damning and suggests that the Coalition has painted itself into a corner by advocating the widespread use of technically inferior FttN technology. For example, use of FttN would not only force the biggest spenders on broadband to look elsewhere for connectivity, but would threaten revenues from high-end broadband services.

The problem is so significant, NBN Co warned, that the Coalition needs to plan an eventual fibre-to-the-premises (FttP) rollout now to cost-justify its own approach.

Failing to do so, NBN Co warned, could leave the government facing such an unfavourable FttN revenue model that it could be forced to pay for its NBN out of taxpayer funds rather than funding it off-budget as a strategic investment.

Then there was NBN Co's assessment that the Coalition's preferred FttN technology wouldn't support its policy promise of delivering guaranteed 50Mbps services; that the FttN model's lower revenues could keep prices higher than they need to be for existing FttP customers; that the installation of approximately 60,000 large and unwieldy kerbside FttN cabinets would face resistance from local councils; and that FttN's limited bandwidth would threaten the ability to provide government, e-health and other services across the network.

NBN Co advised that the Coalition's NBN had to be built as a monopoly or risk losing so many customers that it would be financially unviable; and that it should prioritise signing up large numbers of customers quickly rather than racing to cover the entire country.

Not to mention that NBN Co advised the government that its two-stage rollout was completely the wrong approach to take and would blow out costs compared with doing the whole rollout in one hit.

NBN Co also advised that the government should not, as Turnbull has previously suggested, seek to own Telstra's legacy copper network - access to which is a non-negotiable requirement for FttN to work - but should instead seek to lease it to minimise its exposure to the risk of an "unknown" amount of work to fix the century-old network.

It knew that building the complex administrative systems to manage an FttN network posed a "high risk" to the government's project and could hold back the project's timetable. It warned that the VDSL2 technology on which FttN operates would require costly and time-consuming visits inside each and every home on the network to test speeds and fix any performance issues caused by old copper. It even raised concerns that trying to maintain compatibility with existing phones, faxes and other analogue phone equipment might not be a "sensible" use of government funding.

Indeed, NBN Co identified 12 major issues that the Coalition Government would have to remedy - each of them incredibly complex in its own right - within the next 18 months or so if it wanted to have any hope of meeting its objectives.

Not even Turnbull's Strategic Review can change the reality of the NBN, which is that changing the direction of Australia's largest-ever infrastructure project not only involves massive change and unknown risks - but could, by virtue of its own technological limitations, prove unable to deliver enough revenues to justify being built in the first place.

Those issues remain major challenges that will impede whatever rollout the government designs once its revised Corporate Plan becomes available next year. The new government may have chosen to ignore the well-considered advice of the very people that built one of Australia's largest telecommunications carriers from the ground up in just four years - the same people it will task with building its technically inferior alternative NBN - but it now faces an uphill struggle to deliver a functionally limited NBN that will already be outdated by the time it's complete.

Technology journalist David Braue has been covering the telecommunications industry since it was deregulated in 1997. View his full profile here.

The inconvenient truth for the Coalition's NBN - The Drum (Australian Broadcasting Corporation)