Could election stalemate revive FTTN NBN?

After months of heated rhetoric and policy opposition, the dead-heat election has left commentators at a loss and both sides scrambling to justify their cases to win the support of independents. Yet with NBN Co perhaps ready to down tools until it gets certainty and Telstra policy now in limbo, we're left wondering: what does all this argy-bargy mean for the NBN?

Will the election stalemate force Abbott to compromise the Coalition's minimalist broadband ambitions? (Screenshot by David Braue/ZDNet Australia)

A strong case could be made both ways. From Labor's perspective, the rebuke from Queenslanders cost the party dearly, but the party still managed a strong showing across the country — although one not really befitting an incumbent that wants to show it has voters' unqualified support. Nonetheless, Labor has squeaked ahead in the popular vote, and Gillard can use this as evidence to argue that a large number of Australians prefer Labor's version of the NBN.

There was also, however, strong support for the Coalition's plan: the party made strong gains across the board, reversing its disastrous showing in 2007 to pull within a hair's breadth of Labor and snare 43 per cent of the popular primary vote, compared with Labor's 39 per cent. And this, despite the Coalition's stated policy of axing Labor's NBN and instead pursuing a more austere network investment plan based around rolling out competitive backhaul, fixing ADSL2+ blackspots and connecting under-served areas with wireless broadband.

Tony Abbott will argue that this showing represents voters' rejection of Labor's NBN. Yet it's important to remember that the Greens also saw a record showing, with 11 per cent of the primary vote. If we are measuring NBN sentiment in terms of first-preference votes — the combination of Labor and Greens votes, which comprised 49.93 per cent of the primary vote and the majority of Monday morning's 50.67 per cent two-party preferred showing — suggests that there is strong support among the electorate for the fibre NBN.

Assuming that communications policy was at least somewhat important for many voters, the filter may have well been the factor shifting many of those votes from Labor to the Greens: for many voters, that party's pro fibre NBN and anti-filter stance would have seemed like the right way to show support and protest at the same time. Indeed, there is evidence that civil liberties were high on many voters' minds: even the Australian Sex Party pulled 8727 first-preference votes, many of which would have no doubt come from people supporting that party's anti-filter stance as much as responding to its catchy name.

The Coalition is also against the filter, and may have won over many voters that don't want the filter and can't stomach Labor's NBN or many of the Greens' other policies. Again, there is no way to tell exactly just how much of the vote was related to the NBN, and therefore just where the public's true feelings on the issue lie. The best indicator we can get comes from looking to Tasmania, where early reports suggested the NBN was a key election issue because that's the one state where the network has already begun to be rolled out, and has connected customers.

NBN a vote-changer?

If Tasmania is any indication, the NBN is most definitely a vote-winner: in two-candidate preferred measures, Labor out-polled the Liberals 57 per cent to 43 per cent in the Bass division, 55 per cent to 22 per cent in Denison (with 22 per cent to independents), 63 per cent to 37 per cent in Lyons, 58 per cent to 42 per cent in Braddon, and 61 per cent to 39 per cent in Franklin.

Lyons swung over 4 per cent towards Labor this time around, Bass by 6 per cent, Braddon by 5.6 per cent and Franklin by nearly 7 per cent. Can there be little question that much of this swing was due to the Coalition's threat of axing the NBN and selling off the Tasmanian network built to date? As we've already noted, the Tasmanian NBN can't go it alone.

There were other issues on the table on Saturday, of course, and there's no telling how many voters saw communications policy as the clincher. Indeed, the ongoing cliffhanger in Hasluck, WA, where Julia Gillard and Stephen Conroy quite-intentionally launched their NBN coverage maps a few weeks ago, shows that the NBN isn't necessarily a slam-dunk in marginal seats.

As Abbott runs frantic post-mortems on his campaigns and fights an equally introspective Gillard in the rush for the independent support they need to form government, he will be asking himself whether his party's alternate broadband policy cost it votes and whether a compromise in the communications area be enough to get it over the line. And, if so, just how much ground will he have to give?

The several ex-Nationals members hail from areas where the Coalition's previous communications policies have arguably failed to deliver equitable communications in the past, so it's safe to say they will be well aware of the potential contrasts between the two parties' NBN strategies.

Tony Windsor, for example, harbours lingering resentment over a Nationals back-down on bush telecommunications (and the Nationals in general), so might see the current situation as a chance to address that issue by siding with Labor — or wringing substantial concessions out of Tony Abbott's Liberals before making a cautious truce with the party. There may also be the potential for retributive deal-making: Windsor, like fellow independent Bob Katter, copped harsh attacks from Nationals leaders Warren Truss and Barnaby Joyce and could side with Labor as a thumb in their eyes.

FTTN redux?

Abbott, however, isn't done quite yet. He has indicated that he is willing to compromise on broadband as part of his negotiations to gain strong support. Just what this means in real terms has yet to be seen, but if he aims to shore up support among communications-starved independents, Abbott might have to get out the cheque book and commit to firm investments designed to close the digital divide once and for all — without relying on the private sector to do it for him.

Could this see him moving towards Labor's fibre-everywhere position? One option for Abbott is to float a more moderate compromise that would see him suggest a policy echoing Labor's original fibre-to-the-node (FTTN) plans, which were much less expensive than its ultimate fibre NBN.

This policy would be a compromise between the private-sector reliance of the Liberals' NBN election policy and Labor's own expensive but technically gold-standard policy.

Such a policy would require significant regulatory change, including more control over Telstra's local loop, since the FTTN strategy relies on leaving copper in-place but giving ADSL2+ a shot in the arm by bringing fibre much closer to the end-user premises. Yet this isn't such a big jump from the Coalition's existing plan, which has been said to require a wireless base station on every street to provide enough bandwidth to service needs. Each of these base stations will need to be connected to a fibre backbone — so if the backbone is going to be laid anyway, why not just hook it into a node that can leverage what copper is left?

Doing this, however, would require the separation of Telstra's copper-line network from the rest of the company and the creation of a government body to administer it, in order to ensure the alternate policy could deliver on its objectives. This would be a blast from the past, but frankly, the way things are going, this might be a blessing for Telstra: the company is investing heavily elsewhere and, as its recent results showed, the copper line has become a millstone around its neck. Telstra's strategy for growth no longer lies in dominating the local loop, as it has for so long.

By the time the next election comes, it will be well and truly too late for the Coalition to stop Labor's NBN; the current negotiations really are the Coalition's last chance to nip it in the bud. By stepping away from his minimalist policy and recognising the strategic importance of broadband across the country — and the real changes that need to be made to improve it — Abbott could give the Liberals the shot in the arm it needs to get across the line. He certainly has nothing to lose: the alternative is that Labor wins the support based on its NBN, and the Coalition is condemned to three more years as an even more frustrated opposition.

What do you think? How much did the parties' broadband policies affect the election outcome? Could the Coalition make it across the line by spruiking an expanded broadband policy?