GOVERNMENT attempts to squeeze electoral appeal from its $43 billion NBN rollout masks a behind-the-scenes battle with its spying agencies.
The agencies led by the Australian Security and Intelligence Organisation are understood to be at loggerheads with the government-owned network operator, NBN Co, over the scope and cost of eavesdropping on the fibre-optic broadband cable.
"Discussions between NBN Co, ASIO and the other agencies have been really tense," one inside source said.
"This is largely resulting from demands being made by the spooks," the source said.
These principally relate to NBN Co's requirement under national security provisions in communications laws to make its network "tap-ready" for intelligence monitoring.
While this requirement covers the current, primarily copper-based, cable communications network around the country the government's decision to replace this with high-speed fibre-optic cable with significantly enhanced content capacity is a new ballgame for the security agencies.
It comes against mounting concern in the intelligence community at the increasing likelihood of cyber attacks on business computer systems from foreign operatives.
Last week ASIO director-general David Irvine said that this posed a threat not only to sensitive commercial business information but also to critical transport and communications services that could be shut down through internet hijacking.
Meanwhile, NBN Co's decision to build its high-speed broadband system on a gigabit passive optical network (GPON) platform raises further issues for the intelligence agencies.
GPON is a network architecture that uses a single optical fibre to serve multiple premises. And because it is a point to multi-point network platform, users in a fibre area -- which can include business and domestic premises -- share all internet content. Access is then restricted through a complex and enhanced system of security encryption.
The problem for the intelligence agencies is that this is designed to prevent eavesdropping and other forms of interception that are effectively their bread and butter.
The result of these agencies establishing access to the core of the network is likely to be a significant cost hike compared with traditional communications networks.
Whatever the case, the cost is embedded somewhere in the $43bn price tag for the NBN.
It will comprise the cost of making the network tappable for security monitoring, which will be born by NBN Co, and the "take-out" cost of implementing this, which will have to be picked up by the intelligence agencies. Of course the government will be hit with the tab as it owns both sides of the argument.
This issue demonstrates that the law is falling behind the rapid advances in communications technology, and while the government is trying to play catch-up, its legislative program in this critical and hugely expensive infrastructure area has stalled.
The network issue is not unique to Australia and there are GPON systems operating around the world. But it is not clear whether the national security and cost implications of this were taken into account when former prime minister Kevin Rudd unveiled the NBN strategy in April last year.
While the project, which now aims to connect 93 per cent of residences in Australia with high-speed fibre cable, was announced jointly by Rudd, Finance Minister Lindsay Tanner and Communications Minister Stephen Conroy, ALP sources say the concept was Rudd's and was not taken to cabinet before the announcement.
As last Friday's announcement by Rudd's successor Julia Gillard shows, the government's NBN strategy is still very much about taking the public on a magic carpet ride to a brave new world of communications -- but remains light on substance.