“Somewhat deranged” is how one Federal government minister privately describes the speculation over who will sit on the NBN Co board after this Thursday’s Federal cabinet meeting.
Throughout the fevered speculation over who will join director’s ranks at the beleaguered company, it’s clear that former Optus and Testra CEO Ziggy Switkowski is the firm favourite to chair the board.
Switkowski is not the most popular choice among telecommunications and IT industry commentators, however, who cite his mixed track record in leading the telcos and his lack of civil construction experience a problem that has hamstrung project’s performance.
While those criticisms are valid, there are also compelling arguments for why the industry veteran is the best choice for overseeing the construction of the National Broadband Network.
The arguments against Switkowski
Possibly the strongest criticism of Switkowski was his failure to identify the rise of the internet during his periods running Telstra and Optus.
In his short tenure as the head of Optus, Switkowski failed to take advantage of the internet to disrupt Telstra’s business model, instead attempting to compete with the much better funded and politically connected incumbent in an ultimately disastrous Pay-TV venture and in long distance calls markets.
Later at Telstra, Switkowski – along with Bigpond CEO Justin Milne who is another rumoured candidate for an NBN Co leadership role – did everything within their power to discourage users from adopting the internet in order to prop up existing profitable product lines.
Bigpond’s high prices and stingy data plans, which were copied by Optus, arguably put Australia five years behind the rest of the world and were partly responsible for making the National Broadband Network a necessity a decade later.
Ironically Switkowski’s failure to embrace the internet at both Optus and Telstra allowed dozens of smaller operators to thrive: particularly OzEmail, which counted the current communications minister among its shareholders.
Another legacy of Switkowski’s reign at Telstra, one that lead to the need for the NBN, was the running down of capital expenditure and maintenance budgets as the company was fattened up ahead of the Howard government’s full privatisation.
The resulting poor state of Telstra’s network was one of the driving reasons for the Rudd government to choose the fibre to the premises (FttP) option for rebuilding the nation’s communications infrastructure.
Lacking business vision
Having missed the fundamental market shift to the internet while being CEO at two telecommunications companies, it’s difficult to portray Switkowski as a business visionary.
Indeed prior to joining Optus, Switkowski was the CEO of Kodak Australia, where he was credited with turning Australia into an exporter of film at the very moment the camera industry started its transition to digital photography.
On leaving the telco sector, Switkowski became prominent as the country’s leading advocate for Australia’s nuclear power industry, a sector once described as “mechanical engineering’s last gasp” and some Abbott government critics would assert that the Liberal party's 1950s world view would qualify Switkowski for a prominent role in the new administration.
The case for Switkowski
There are plenty of reasons why Switkowski shouldn't get the gig as NBN Co's chairman, but many of the criticisms levelled against him could turn out to be strengths for NBN Co and supporters of the NBN.
Switkowski is notable as being a ‘safe pair of hands’ who delivers the objectives needed by his shareholders and boards. Should Turnbull and Abbott give the board a clear mandate after the various reviews of the project Switkowski may have an opportunity to shine.
During his period at Optus the company underwent a massive ownership change and Switkowski’s role was to hold the company’s financial and market positions during a turbulent period. He did that.
Switkowski was also exposed to the difficulties of rolling out an HFC network which featured many of the problems that the NBN has struggled with today, such as infrastructure access, construction and technology.
Similarly at Telstra, Switkowski’s running down of the network was part of the Howard government’s plan to fatten Telstra for eventual full privatisation. At the same time the company also started planning for another network rollout in the Telstra Next G network, a project his successor Sol Trujillo gleefully accepted full credit for.
A role as an advocoate
In his role at Kodak, Switkowski showed he was able to argue with the Keating government over supporting an industry despite the objections of Treasury, free market advocates and many commentators. Being able to argue the political case for the broadband network will be very handy for both NBN Co and Malcolm Turnbull in the face of sceptical Prime Minister and cabinet. Being trusted and having credibility within the Liberal Party is another advantage Switkowski will bring to the NBN Co board.
One of the great failings of the outgoing board management of NBN Co was its lack of a high profile advocate for the project among the leadership. Switkowski has never been reluctant to come out to promote his organisation or defend his projects, even desperately unpopular causes like nuclear power.
Having a credible public face of the project may be the best result for the NBN.
While Switkowski fits the bill for leading NBN Co’s board there are other candidates who would prove to be equally effective.
Former Howard government Communications Minister Helen Coonan would bring political smarts and toughness to the role while veteran Leighton’s CEO Wal King would add steel to the board while providing much needed construction experience.
While Switkowski looks set to get the tick of approval, his appointment is the beginning of a complicated process for Turnbull. Switkowski and the rest of the refreshed NBN Co board face a monumental task in running the planned reviews, finding a new CEO and installing a management team that can deliver.
The key test for NBN Co lies in its ability to ditch some of the surprisingly bad habits it has managed to pick up in its short life. This could prove to be the toughest task of Ziggy Switkowski’s career but it may save the NBN from a nuclear winter under an Abbott government.
Paul Wallbank is one of Australia's leading business and technology bloggers, his business Netsmarts helps organisations adapt to the new ways of doing business online.