Millionaire entrepreneur and Internet plan key in Australian election

SYDNEY Fri Sep 6, 2013 1:27am EDT

Australian opposition leader Malcolm Turnbull gives a speech at the Foreign Correspondents Association Newsmaker Luncheon in Sydney October 12, 2009. REUTERS/Daniel Munoz

Australian opposition leader Malcolm Turnbull gives a speech at the Foreign Correspondents Association Newsmaker Luncheon in Sydney October 12, 2009.

Credit: Reuters/Daniel Munoz

SYDNEY (Reuters) - A popular millionaire technology entrepreneur behind the Australian opposition's flagship revised plan for a national high-speed internet service is a not-so-secret weapon in Saturday's federal election.

Malcolm Turnbull, former Liberal Party leader and the communications spokesman for the Liberal-led coalition, which is expected to be the runaway winner in the vote, is well-liked by both business and the public.

A former lawyer, Turnbull earned his technology stripes as a major investor and chairman of OzEmail, an internet service provider that became the first Australian tech stock to list on the Nasdaq in 1996.

He was ranked 197 on a Business Review Weekly (BRW) list of Australia's rich, with A$186 million, in 2010, though Turnbull denied the BRW figures.

More left-leaning than his successor as party leader, Tony Abbott, Turnbull is consistently chosen in opinion polls as the country's preferred leader over his right-wing boss, with his appeal extending to swing voters.

Turnbull's cheaper, slower alternative to the current government's A$34 billion National Broadband Network (NBN), however, is significantly less popular.

"What they are trying to do is offer us a bag of lollies (sweets) by saying we can do it cheaper and faster, but what we are really being sold is a lemon," said Mike Gregory, a telecommunications lecturer at Melbourne's RMIT university.

Turnbull's plan would halt the current rollout of the fiber-to-the-premises network that Prime Minister Kevin Rudd has promised will deliver internet speeds of up to 100 megabits per second (Mbps) to 93 percent of Australian premises, 8.5 million of them, by 2021.

By June this year, delays meant just 163,500 premises had been hooked up to the network, which takes a fiber-optic cable direct to households and businesses. If completed, the network would be one of the most advanced in the world.

Turnbull has instead proposed a A$30 billion fiber-to-the-node network. Under this plan, high-speed fiber would be laid to street side "nodes", but the final connection to homes and businesses would rely on Telstra Corp Ltd's ageing copper wires, with much slower download speeds than fiber.

This method, the Liberal Party says, would provide 25 Mbps minimum by 2016 and 50 Mbps for the "vast majority of households" by 2019.

Both parties plan to serve remaining remote locations by satellite and fixed wireless.

Critics, including ISP iiNet, Australia's second-largest service provider, say the Liberal-led coalition's plan would create a two-tier system, require costly, ongoing upgrading and still be outdated within a few years.

Robin Braun, a computing and communications professor at the University of Technology in Sydney, said the speeds of the coalition's network would be good enough only for internet browsing.

"Internet browsing was the service of the 90s and 2000s," he said. "The services of today and the next decade are telemedicine, telecollaboration, telecommunicating, blended education etc."

Turnbull said it made little sense to invest in a system for the future when technology may improve.

"You don't want to be saying 'I'm going to invest huge amounts of money in the technology of today for 20 years hence', if, on the other hand, you can meet the needs of today and the foreseeable future, and then meet the needs of 20 years hence with the technology of 20 years hence," he told Reuters after launching a fiber-to-the-node service at a Sydney apartment complex.

"BIG POSITIVE"

Turnbull argued that his method entailed a cost of A$200 per apartment for download speeds of up to 100 Mbps and upload speeds of up to 40Mbps, compared with an estimated A$5,000 bill per apartment for Labor's fiber-to-the-premises.

The opposition coalition has committed to confirming cost savings, both in dollars and time, from its planned changes within the first 100 days of a new government.

But Turnbull faces a hard slog, with a likely expensive, and possibly lengthy, financial renegotiation with Telstra to use its copper wires to replace a A$11 billion deal the company struck with the government to switch over its network.

He also faces opposition within his own party. Ousted as leader by Abbott, Turnbull's left-leaning views on subjects ranging from same-sex marriage to a republic are at odds with the controlling hard-right.

Still, Turnbull is credited by many with getting a version of the NBN, even a truncated one, back on the table after his boss last year pledged to ditch "a white elephant".

"We detected in our focus group research mid-campaign that the NBN was starting to come through as a bit of a positive equity for Labor in this campaign," said pollster John Scales of JWS Research. "The Liberals have picked up on this and you've seen more of Turnbull in the recent weeks of the campaign, trying to negative some of that positive equity."

A June AFR/Nielsen poll, 62 percent of voters preferred Turnbull, whose densely populated Sydney electorate includes some of the city's most exclusive harbor side suburbs, as leader, compared with 32 percent for Abbott.

A recent chat with Reuters during a train journey on the campaign trail in Sydney was interrupted by a number of well-wishers and photo-seeking fans.

In business circles, his name crops up repeatedly, particularly in the technology sector, an area pegged to pick up some of the slack from Australia's fading mining boom.

"Turnbull is a big positive," Niki Scevac, the director of technology start-up venture firm Blackbird Ventures said in a recent interview.

But his real test - coming up with a final NBN plan that's palatable to business and his peers - is still to come.

(Editing by Robert Birsel)