Crunch time for NBN Co

The NBN Co strategic review is crucial to our broadband future but it's more than likely that the final outcome has been predetermined. A UK BT style FTTN network rollout will be major misstep.

With two weeks to go until the National Broadband Network (NBN) strategic review is released it might be worthwhile to look at the core issues and identify some of the actions that NBN Co should take immediately.

Let’s keep in mind that this is not the NBN Co that we had a couple of months ago.

A number of key personnel have been shown the door by the Abbott government and it’s more than likely that there will be others leaving before the end of the year. A new board has been constituted under the leadership of the executive chairman Dr Ziggy Switkowski, with key executives from Telstra brought in to bolster the leadership team.

In fact, NBN Co is starting to look like a subsidiary of Telstra and pace of Greg Adcock’s appointment as chief operating officer (COO)  was quite remarkable, given how acrimonious Telstra has been in the past over executives moving to competitors.

But then again, NBN Co isn’t Telstra’s competitor, or is it?

Telstra’s role in the current malaise surrounding the NBN rollout needs to be explored, but for now, let’s look at what NBN Co should do now.

Buy the access network from Telstra

The NBN’s origin is a perfect example of governments with the best intentions ultimately stuffing up major projects. After two years of discussion with Telstra about improving Australia’s telecommunications access network infrastructure the former government came to the decision that Telstra was just too hard to deal with.

A solution had to be found to correct the mistake made in the early 1990s when Telstra was privatised as a single entity and not separated into retail and wholesale organisations.

How do you deal with an organisation that was gifted a national telecommunication network and despite the best efforts of the Australian Competition and Consumer and Commission (ACCC) and a bevy of lawyers, remains an impediment to effective telecommunications competition?

Labor’s solution was to lease the pits, ducts and traps needed for future access networks from Telstra – yes that’s right, the former government wanted Telstra out of the access network business and decided the best way to do this was to rent vital infrastructure rather than buy it outright.

And if you make one bad decision you may as well go all the way, so Stephen Conroy & Co proceeded to lease space in Telstra exchanges for the NBN and agreed to utilise Telstra backhaul for the future NBN.

Get the picture? The gorilla is still in the room!

Got a problem with asbestos in a pit? Then you have to wait for Telstra to remediate the pit and you can be sure that Telstra will hurry out a repair team. Not!

Put your racks in Telstra’s exchanges? At Telstra’s mates rates – kaching!

Need backhaul? Telstra will be happy to provide at an inflated cost and if you live in Tasmania then bad luck because you get to pay 40 per cent extra.

And the former government was happy to pay $11 billion dollars for a deal which effectively left NBN Co in an untenable position where every segment of the NBN remains in Telstra’s effective control.

This is what makes the impending renegotiations with Telstra so important. NBN Co needs to go back to the negotiation table and provide Telstra with sufficient reason to want to sell all of the copper, pits, ducts, traps, and exchanges to NBN Co. I think $11 billion should do it.

Either Telstra is in the access network business or it is not. If Telstra is to remain in the access network business then the new look NBN Co could just as easily become a new Telstra subsidiary. And don’t think that this hasn’t been on the minds of Telstra executives for the past three years.

Change the construction approach

I have always maintained that the construction outsourcing approach was always going to be a failure and nothing has convinced me that this will change irrespective of whether the NBN is built using optic fibre, copper or string.

The evidence so far highlights that the approach currently being implemented in the Northern Territory is the best way forward. NBN Co should take over the fibre construction and work directly with sub-contractor fibre rollout teams doing the fibre past premises. NBN Co should be employing mum and dad electrical and telecommunications contractors to do installations into premises. Small contractors deal with customers face to face daily and know how to get the job done quickly, cheaply and to the customer’s satisfaction.

After agreeing to pay Telstra $11 billion to rent pits, ducts and traps the idea of rolling the fibre out along power lines must be a joke right? Telstra is responsible for asbestos remediation, it says so in the contract, so get Telstra moving or take the matter to court for breach of contract and damages.

Telstra knew all along (as did the rest of the industry) that asbestos would become an issue and it appears that Telstra just sat pat until the matter blew up in the face of the former government just before the last election. Not that this was a contributing factor to Labor’s election loss, but you wouldn’t find a bookie silly enough to bet against asbestos becoming a major problem for NBN Co at some point in the last three years.

Fix the Muti-Dwelling Unit problem

The MDU problem is perplexing and several industry studies have been carried out on this problem, both within Australia and overseas. NBN Co has described carrying out studies that looked at using fibre, fibre and copper, and a combination of fibre and Ethernet over power line. We now know that NBN Co recommended using FTTB and xDSL but this was rejected by the former government.

The FTTB and xDSL approach has a limited lifetime and is not going to work in all MDUs. Do we really want MDUs to be left behind? There are just too many to ignore.

Fibre past premises

NBN Co must adopt fibre past premises. Simon Hackett, who is one of the most recent NBN Co non-executive board member appointments, has argued for a cheaper approach to providing FTTP. In an earlier article I put forward an alternate approach that utilised fibre past premises and xDSL for the connection over copper.

Any alternative to fibre past premises will mean Australia ends up with a NBN lemon and the result will be Australia sitting on the bottom of the global broadband ladder.

If the government wants to save money then let people pay for the fibre connection from their homes to the fibre past premises. If past practice is anything to go by retail service providers (RSP) will bundle to cost of the fibre installation into a 24 or 36 month contract.

Paying $1000-$1500 for FTTP over a 24 or 36 month period would be acceptable to many Australians. If the government means tested household capacity to pay for the connection then the opportunity exists over the next decade for the government to contribute towards FTTP connections for low income households.

But without fibre past premises there can be no easy and inexpensive migration from copper to fibre.

Reach out and get communities involved

The NBN is a nation building project. Politicians of every ilk agree. So why not reach out and get communities involved?

Provide communities with the opportunity to work together to do the fibre connection from the street to the home. Provide installation kits and instructions. Train a couple of people from each community on how to do the fibre splicing so they can then go back to the community and assist others.

If the former NBN Co chairman Siobhan McKenna can do the fibre splicing course then there is no reason why other Australians can’t.

In 50 years a whole generation of Australians will be able to look back and say with some pride that they contributed to the world’s best fibre broadband network.

Only time will tell

As each day goes by we hear of another city around the world saying enough is enough, we’re sick of waiting for the telecommunication industry so we’re going to install FTTP ourselves.

Yes, even Los Angeles, a city of 3.5 million residents which to outsiders appears to have more cars than people, has announced plans for FTTP.

Yet it appears that in two weeks Australia appears set on taking the brass medal by announcing plans for a UK BT style FTTN network rollout. Surely not?

Only time will tell.

Mark Gregory is a Senior Lecturer in the School of Electrical and Computer Engineering at RMIT University. You can follow @_markagregory on Twitter or read his blog here.

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