The latest leaked NBN document gives us more insight into the project which was meant to be about "nation building", but which is now turning into a politicised quagmire, writes Paddy Manning.

Yesterday's leaked internal document revealing that the NBN's rollout of fibre-to-the-node has been well behind schedule is further confirmation that Malcolm Turnbull's version of the NBN is proving to be much more expensive to deliver than was originally hoped.

Remember that the only merit of Turnbull's "multi-technology mix" (MTM) was that it would be cheaper to build, and arrive sooner. There was no question that it was technically inferior to the former Labor government's mostly fibre-to-the-premises network, which then shadow communications minister Turnbull derided as a "Rolls-Royce" option.

But if the Coalition's NBN could be delivered cheaper and sooner, there was a good argument that the earlier arrival of revenue from business and residential customers could fund subsequent upgrades to the network.

It hasn't worked out that way.

The MTM network has blown out twice in projected cost - first, from $29.5 billion to $41 billion, and then last year to "up to" $56 billion. And instead of delivering 25 Mbps by 2016, now the MTM network isn't expected to be finished until 2020 - only a year earlier than Labor expected to finish its rollout. NBN's own chairman has admitted meeting this 2020 target will require a "heroic" effort.

The NBN debate remains a giant political "he said, she said" in which neither side gives the other any credit. In a Background Briefing program late last year, I tried to cut through the thicket of NBN politics to discover the truth of where our largest, most significant infrastructure project stands.

There is a non-partisan way through the debate, in my view, but it relies on an analysis of an ever-receding counter-factual scenario: what would have happened under Labor.

The PM and communications minister Mitch Fifield are being cute when they say - as they did again yesterday - that reverting to Labor's fibre-to-the-premises NBN would take an extra 6-8 years to complete and cost an extra $30 billion. That is an estimate of the cost of going back to Labor's NBN, after having embarked upon the Coalition's version in 2013. It is not the amount that Labor's NBN would have cost if it had continued as originally planned. Obviously, it is much more inefficient to change horses mid-stream, then change back again.

Forget Labor's numbers for a moment, Malcolm Turnbull's own strategic review in December 2013 came up with an estimate that the fibre-to-the-premises network would have cost $73 billion.

It is true that Labor's NBN was behind schedule and over-budget when the government lost office in 2013.

But as a matter of degree, they were only a year behind, and only a few billion over-budget, on their own figures - which, by the way, respected former NBN chief Mike Quigley stands by to this day.

Labor had very good reasons for being behind: firstly, they were negotiating a one-off deal with Telstra that would see the ageing copper network - which Telstra's own engineers thought was at five minutes to midnight - retired. Then Telstra chief David Thodey was convinced it was the right deal both for Telstra and the country.

Secondly, the NBN was not only starting from scratch, with all the inevitable teething problems - it had to build the national transit network, the "backbone" of the NBN. This was another one-off, up-front exercise that was expensive but was duly completed and is relied on by NBN today.

A more substantial criticism is that Labor's NBN rollout lacked any market discipline: there was no attempt to target those areas that were readiest to pay for fast broadband, such as business precincts. Instead, some unlikely regional areas were targeted, and while this might have been defensible for nation-building reasons, it also undoubtedly made the rollout much more expensive for taxpayers.

A huge component of the cost of the NBN is debt and the quicker you can earn revenue, the lower your borrowings need to be, and therefore the lower your ongoing interest bill. It was imperative to target suburbs with the highest likely take-up rates.

If really pressed on his NBN role, the PM resorts to a rhetorical defence. ( AAP: Lukas Coch )

Lastly on Labor's errors, there was the rejection of fibre-to-the-basement connections to the hundreds of thousands of apartments in Australia's most densely populated cities. Even the staunchest defenders of the fibre-to-the-premises network concede this was a mistake, which would have led to a crazy rewiring of recently completed tower buildings that already had perfectly serviceable internal cabling capable of gigabit speeds. (Admittedly, it's a different story for the suburban three-story blocks of flats which were Labor's primary concern when devising the policy.)

For all that, Labor's all-fibre network would have been built, for somewhere between the NBN's contemporaneous costings of $44 billion and the Coalition's estimate of $73 billion. Once connected, it would have been a readily- and endlessly-upgradeable network with fibre servicing 93 per cent of homes and businesses, and would have been a highly-attractive proposition for institutional investors.

Thanks to the Abbott and Turnbull governments, what have we got instead? The promise that underpinned the original MTM network, that all Australians would have 25Mpbs or higher by the end of 2016, has long been broken.

Since the NBN's corporate plan was released last August we have known that costs have blown out to between $46 billion and $56 billion (and we all know that when a project proponent specifies a likely range of costs, it is wise to assume the upper estimate). Based on the upper estimate, that's a 90 per cent increase, or almost a doubling in the cost of the project.

One of the key cost increases was in IT, as the NBN's computers had to be upgraded to cope with the extra complexity of integrating the new mix of connection technologies, a direct consequence of the switch to a MTM.

The latest leak confirms the copper-based fibre-to-the-node component of the MTM - which will bring fibre through to fridge-sized cabinets on many street corners - is proving difficult. One of the well-known disadvantages of fibre-to-the-node is that the nodes require power. That there have been delays due to negotiations with electricity suppliers was predictable and can only be considered a failure of network planning.

Again, this should not be a surprise: one of NBN's own directors, Simon Hackett, said last year that fibre-to-the-node is a "dud", and NBN has already started trialling faster technologies that will rely on bringing fibre closer to the home, to what is known as the distribution point or "fibre-to the-curb", potentially replacing fibre-to-the-node altogether but increasing the rollout cost again.

Reusing and upgrading the Hybrid Fibre Coaxial network - the pay-TV cables bought from Telstra and Optus - was defensible in theory but is also proving more difficult than expected in practice, with a leak last year suggesting the Optus network was unfit for purpose and would need to be overbuilt at a cost of more than half a billion dollars. HFC trials so far have been encouraging and there is no doubt that the planned DOCSIS3.1 technology can deliver superfast internet speeds, but it will not be cheap and the major rollout will not begin until 2017-18.

The upshot is that we have a NBN which gives some lucky home and business owners a fibre-optic connection courtesy of Labor's abandoned rollout, while the rest of us wait for our HFC cable to be upgraded or make do with a much slower copper-based connection that will probably need to be replaced.

The whole hotchpotch will be worth $27 billion - less than half its likely construction cost - when it is finished and put up for sale, according to a recent estimate by PwC. There is no doubt Labor's NBN would have sold for more, improving the return for taxpayers.

If really pressed on his NBN role, the PM resorts to a rhetorical defence, blaming Labor for starting the project - his preferred wheeze is the Irish joke, "If you wanted to get there, I wouldn't start from here" - and mounting an elegant-sounding attack on the very idea that anything can ever be "future-proofed", a theme he hammered home when he took over the leadership. This is unassailable high ground for Malcolm Turnbull, but it is completely wrong-headed.

NBNCo is leaking and, if what I'm hearing from former staff is right, morale inside the organisation is abysmal, management is hostage to every expensive consultancy in town, and senior staff are leaving, disillusioned, as what they thought was a nation-building project is turning into a politicised quagmire. As one former employee told me: "I'll be amazed if it ever gets built."

This is an unforgiveable state of affairs for such a vital project and, whoever wins the next election, the NBN will need to be redesigned again. Hopefully it will be done with the national interest, not politics, uppermost in mind.

Paddy Manning is a journalist and author of the recently published Born To Rule: The Unauthorised Biography Of Malcolm Turnbull (MUP).