TONY JONES, PRESENTER: It's now becoming clear how Malcolm Turnbull's version of the NBN will be rolled out, the numbers of premises connected by fibre to the home or fibre to the node or linked up to existing cables or satellites. The NBN now has a new CEO along with a new chairman and while they're committed to speeding up the rollout, the network still does face some big problems.

Communications Minister Malcolm Turnbull joins us now in the studio on a day when his old colleague at The Bulletin magazine, Bob Carr, was getting a pasting in the media over his new diaries.

Thanks for being here.

MALCOLM TURNBULL, COMMUNICATIONS MINISTER: Great to be here.

TONY JONES: Now, I suppose some of your colleagues might be wondering if you're keeping a diary.

MALCOLM TURNBULL: (Laughs) Well, you know, Bob Carr I think would put anybody off keeping a diary, but it is a remarkable exercise in self-indulgence and narcissism, isn't it?

TONY JONES: What do you suppose convinced him to reveal quite so much of himself?

MALCOLM TURNBULL: Well, I hope for Bob's sake that it is just a very cynical and calculated exercise in selling more copies of the book. If, on the other hand, he really thinks that an anxious nation needs to know about his efforts to achieve a six-pack and what he eats for breakfast and his terrible hardship, the cruelty that has been imposed on him in not being able to travel first-class. If he feels that the nation is just waiting, dripping with empathy, to sympathise with him for the sacrifices he's made for Australia, then I'd have to say I think he's lost the plot, so let's just hope he's just trying to sell his book.

TONY JONES: We'll wait to see whether it becomes a bestseller on the strength of some of these revelations. But in the meantime, he was branded a bigot today for criticising what he calls the very unhealthy influence of the Melbourne Israel lobby on Prime Minister Julia Gillard. Now, you've known him, as I said, since working with him at The Bulletin. Have you ever known him to go in for bigotry?

MALCOLM TURNBULL: Oh, look, I don't think Bob's a bigot. I think he's a - in fact I think that's a - that is a - that's a pretty harsh description. I wouldn't apply it to him. But I think - I don't agree - I think he's mischaracterised that issue. I mean, the - everybody - as Mark Leibler was saying on Lateline last night, everybody - everybody in Australia is entitled to lobby their politicians and there are all sorts of groups and there are Jewish groups and there are groups from every walk of life that lobby the Government about issues domestic, foreign and so forth. So, I think that the - what I didn't like - and I hope Bob Carr wasn't intending to make this point - what I didn't like was the suggestion that there was something illegitimate about Jewish Australians putting their point of view to the Government and lobbying the Government.

TONY JONES: Well he was saying of this specific lobby group that they held extreme views, extreme right-wing views, unlike, he would argue, the broader views in the Israeli community.

MALCOLM TURNBULL: Well I've got no idea who he's talking about then because I'm not aware of any well-known lobby group or organisation in the Jewish community that you could describe as having extreme right-wing views. Extremism, frankly, is not a characteristic of the Jewish community and there's a very large Jewish community in my electorate.

TONY JONES: Well I was going to say that: there is a high concentration of Jewish Australians in your electorate. Have you ever been lent on to take a certain position on Israel issues?

MALCOLM TURNBULL: No - well, two things. No, nobody's ever lent on me. But the other thing is, you can't generalise about any community and certainly not about the Jewish community. I mean, it is as diverse in its opinions and its range of views as the Australian community generally. So this - I'm always a little bit uncomfortable when I hear the term the "Jewish lobby" or the "Catholic lobby" or the "Arab lobby" because invariably it massively oversimplifies what is always a very diverse community with a wide range of views. And - I - it - yeah, I don't - I think that's - I don't think Bob's - Bob Carr is off the beam there on that one, and it's - and again, I just - I'm uncomfortable, Tony, about this suggestion that there's something illegitimate about people lobbying their government. I mean, those of us who have the privilege of being members of Parliament, let alone ministers or prime ministers, it is our job to be lobbied. Our job is to listen. I mean, lobbying is just another way of saying getting your opinion across to your elected representatives and that's what you're entitled - everyone's entitled to do that and it's our obligation to listen carefully and then make a decision in the national interest.

TONY JONES: Well here's one issue the Jewish community in Wentworth and probably beyond that and maybe not just the Jewish community either I'm sure have been lobbying you about and that is the plans to alter the Racial Discrimination Act and the amendment has been put forward, the draft amendment. Do you share the concerns, for example, of the Jewish community about this?

MALCOLM TURNBULL: Well, the views about 18C - and you flagged this earlier in the program - are very, very widespread. I've just come from speaking to an audience of 1,000 people out at Parramatta - the Harmony Day dinner, from people representing every ethnic group, every multicultural group in this wonderful multicultural city of ours here in Sydney, a wonderful city and a wonderful multicultural nation. And I can tell you a lot of people from every conceivable background raise this issue with me. It is a very hot topic and it is not a - there isn't a Jewish opinion on it; there is very wide concern about it. We share - all of us share those concerns. The Government is united in its opposition to racism and bigotry and discrimination.

TONY JONES: Well not quite united on the question of bigotry, evidently, because the Attorney General himself says that people have the right to be bigots. Is there a generalised right to bigotry?

MALCOLM TURNBULL: Well, I think his - I think that's - I think his remark was perhaps misunderstood or misinterpreted.

TONY JONES: Well it certainly wasn't taken out of context because the context was absolutely clear.

MALCOLM TURNBULL: Well, look, rather than - George Brandis is not a bigot and he doesn't condone bigotry, but he is very committed to free speech and what he is seeking to do in this exposure draft - now this is not - this is - this - these amendments have been put up for public consultation. So, this is not a bill that we're about to introduce into the Parliament. We are seeking views and we've had a lot of them and I can run you through what the common views are. I mean, the ...

TONY JONES: Well, let me - before that, let me just ask the obvious question: do people have the right to say bigoted things about Jews?

MALCOLM TURNBULL: Well, people don't have the right to engage in - as the law stands at the moment, in language that is - which could generally call racial vilification or vilification based on the grounds of race or ethnic background. And the question is: how you frame that legislation, but the - so there's always that balance ..

TONY JONES: Well as it's now framed in the draft, which people are deeply concerned about in your community and the concerns that you were getting today at that event, do you think it should change?

MALCOLM TURNBULL: Well, the cabinet will consider the submissions that people are making and we'll come to a collective decision, but I can just tell you the bulk of the criticisms of it or the suggestions revolve around two aspects. Firstly, people - many people have said they feel the definition of vilification and the definition of intimidation are too narrow and they should be broader. And also, there is very widespread concern that the defence, if you like, which is currently in 18D, which would be in Subsection Four of the proposed amendment, which basically says, "If you're engaged in a public debate, then that's a defence to a charge of having been engaged in racial vilification, etc." The - there is a - a lot of people who are arguing that to have the advantage of that defence, you must be shown to have acted reasonably or in good faith or reasonably and in good faith and that's - which is the current situation and that's a powerful and good - a fair point.

TONY JONES: Briefly, do you share those concerns?

MALCOLM TURNBULL: Well, I share the concerns, but I don't want to - of course I share the concerns, but - as we all do - but I don't want to endorse a particular conclusion because we'll come to that conclusion collectively as a cabinet.

TONY JONES: Alright. Let's go to communications issues. Whatever else you're changing about the NBN, it will remain a monopoly owner of the broadband network and the provider of access to it for retailers, is that right?

MALCOLM TURNBULL: Well, yes, it'll be - it will be the - in the vast majority of premises, it will be - residential and small business premises - it will be the sole fixed-line, just indeed as Telstra is currently the sole fixed-line in the majority of ...

TONY JONES: Because the NBN chairman Ziggy Switkowski's unequivocal about this. He says, "For the economic model to work, the NBN will have to be the monopoly provider." You agree with that?

MALCOLM TURNBULL: Well I think what - well, not precisely. I just want to be quite clear about this. The - clearly, the NBN has - was set up to be a monopoly and that enables it to be protected, if you like, against people cherry-picking the more affluent or prosperous areas. Now there is a panel chaired by Mike Vertigan at the moment which is looking at some of these regulatory issues because there is a powerful case to say, "Hang on, why are we creating a great, big government-owned monopoly?"

TONY JONES: Well can I just go to a specific case there? Because there is one. Because the actual financial plan of the NBN is now being challenged by the telecom TPG, which plans to go it alone, avoid the Government's rollout - or the NBN rollout, I should say - and put fibre to the basement in 500,000 apartments in the major capital cities. Do you propose to stop that happening?

MALCOLM TURNBULL: Well, there are a couple of things. Firstly, TPG has got to comply with the law and there's an open question as to whether what they're proposing to do is consistent with the legislation.

TONY JONES: They've put out a business plan with a model. It's all there. They know how much money they're going to make out of this and in a free enterprise system, they think they should be able to do it.

MALCOLM TURNBULL: Well, if they're able to do that in accordance with the law as it stands, that's one thing, but the - we're looking at it very carefully and - both as a government - both as the Department of Communications, I should say, and myself as the minister and also the Vertigan panel is looking at it. But the scheme of the act - and this was set up when Labor was in power - was designed basically to say this: that you could - anyone could build a high-speed, super-fast network after 2011, but if they did so, they had to - it had to be a wholesale network, it couldn't be vertically integrated with a retail telco and it had to offer services of the same type as the NBN.

TONY JONES: Well, I mean, that's more or less what they're proposing, it seems to me. But here's the thing: Ziggy Switkowski says this is cherry-picking very precisely and he says if they're allowed to go ahead with it on this scale, it would take five it 10 per cent of the NBN's proposed revenue. Now, that would have terrible implications for the Government's debt in this, wouldn't it?

MALCOLM TURNBULL: Well, it may, it may, Tony. That's not - let's just be clear, though. It's not yet established precisely what they're proposing to do. It's not yet established whether what they're proposing to do is consistent with the law. So, I think there's a fair bit of water to go under the bridge on TPG.

TONY JONES: But if you lose five to 10 per cent, possibly 10 per cent of the projected revenue, would the project have to come back on budget? Because currently it's off budget, which means we don't see the implications of the spending.

MALCOLM TURNBULL: No. Look, this - the NBN is not a commercial project. It is the most - the single most expensive, irrational project of the Labor government. It should never have been undertaken in the way it is. It is completely non-commercial.

TONY JONES: "So let's keep it going," says Malcolm Turnbull.

MALCOLM TURNBULL: No, no - well the problem that we've got - the problem that we've got is is that if we were to pull the pin on it completely, we would lose at least - we'd write off at least $15 billion, probably more and have nothing to show for it. So, Labor has left us with a shocking mess. The best thing we can do is to complete the project as quickly and cost effectively as possible.

TONY JONES: Alright. If you can ...

MALCOLM TURNBULL: And that's the - and that is the - you know, now, can I just say this to you?: the way Labor went about the NBN was unique in the world. No other country did anything as mad as this. And ...

TONY JONES: Yes, but we have heard this argument before (inaudible) ...

MALCOLM TURNBULL: Yeah, but you don't care about it because it's the taxpayers' money. - that's the thing.

TONY JONES: That's not at all true.

MALCOLM TURNBULL: Well ...

TONY JONES: What I now think is that you have to manage it ...

MALCOLM TURNBULL: I do.

TONY JONES: ... and I'm interested to know how you're going to do that. So here's a big question: if you can protect its monopoly, it'll still be quite valuable. Will you seek to privatise it in this term of government?

MALCOLM TURNBULL: Oh, you're joking, aren't you?

TONY JONES: No.

MALCOLM TURNBULL: I mean, this unsalable. Are you kidding? This is - look, I've always said - and this may be not doing him sufficient justice - I've always said the NBN - the privatisation of the NBN may well be a key priority of Wyatt Roy's second term as Prime Minister - Wyatt being 22. But Wyatt could, I think, become Prime Minister sooner than the NBN'll be fit for privatisation. The problem - what we've got to do is get the project completed as cost effectively as possible and mitigate the many billions of dollars that Labor has lost. In other words, try to retrieve some of the billions that they've lost. But this is - this is - let's be quite clear about this, Tony: this was never a good idea, never a good idea for the Government to be embarking on this and the last few years have proven that. Now, you know, ...

TONY JONES: Well, if you could just contain your enthusiasm for the project for just a minute, let me go through how your NBN is going to look. 28 per cent of households will have fibre to the home, 44 per cent fibre to the node, 30 per cent will have to make do with the existing Telstra and Optus cable network. So it'll be some new fibre optic cable, some copper, some hybrid fibre-coaxial cable, some satellite and some fixed wireless. Ziggy Switkowski calls this the network of networks, but it sounds more like a dog's breakfast, doesn't it?

MALCOLM TURNBULL: Well, the internet is a network of networks, by the way, and that's why it's called the internet, because it enables you to connect all sorts of networks. If you think about it - if you think about sending an email, for example, you might send it from your mobile phone, it travels over wireless to a base station, it then goes into, say, some fibre transit network, it then may reappear at an exchange somewhere and then be carried over ADSL to the recipient's address and any other myriad number of connections. So, the whole point of the internet is a - it is a network of networks. Now, what we're talking about is using the legacy assets, copper and coax, where it's available to reduce the cost of the construction of the NBN consistent with achieving universal very fast broadband. So the ...

TONY JONES: Well, you know, fast broadband in the United States we now know means upload and download speeds of one gigabyte. And ...

MALCOLM TURNBULL: That's completely - well, you mean one gigabit per second.

TONY JONES: One gigabit per second.

MALCOLM TURNBULL: But, yeah. But the - that's actually not true. That's not true.

TONY JONES: OK.

MALCOLM TURNBULL: That is very fast of course. That is super-fast.

TONY JONES: Yes.

MALCOLM TURNBULL: And it's much faster than anyone would need ...

TONY JONES: Is it not the case that they can do that in Chattanooga and a lot of people have moved there for that reason?

MALCOLM TURNBULL: I don't think so. The reality is, Tony, that connectivity is a - is important to people insofar as it enables them to do something. I mean, there is nothing that you can do ...

TONY JONES: But Ziggy Switkowski admits this - "We don't know what we want to do with internet in the future," and he said there's going to be an exponential desire for increased speeds and I'm just wondering what's the highest speeds we're going to be able to see on this coddled-together network?

MALCOLM TURNBULL: Well, the typical speeds available now on vectored VDSL, which is what will be the fibre to the node part of the project, are now upwards of 100 megabits per second. That would enable you to stream simultaneously 15 high-definition video streams. Now, I'm - you know, you've got a large family, but you don't - it's not a family of 15 and they're not all watching high-definition videos at the same time, so you've got to ask yourself, before you go nuts and spend tens and tens of billions of dollars on giving everybody the capacity to have one gigabit per second, you've got to ask yourself, "What is that actually going to be used for, and importantly, will people actually pay for it?" Now ...

TONY JONES: Isn't the problem here that in our current space right now, we don't know the answer to that question? Unless you have the capacity to have very, very fast internet, much faster than what you're talking about, you may be constraining the future.

MALCOLM TURNBULL: But you're not, Tony, because you can upgrade networks. You see this is the whole - this is the thing you've got to remember: building a telecom network is not like building a bridge. You build a bridge with six lanes and you can't add an extra lane every five years or 10 every years. With a telecom network, you can upgrade them all the time. And so, if you can, build it now and meet the demands for the next decade only, say, and then in 10 years invest again to meet the demands of the next decade, that is not only a wiser use of your money, but it also means when you're investing to meet that new demand, you're using the technology of the future, not the technology of today.

TONY JONES: I'm afraid we've actually gone into the future because we've exceeded our time limit for the interview, but thank you very much for coming to join us tonight.

MALCOLM TURNBULL: Always good to be with you.