Quigley back in the spotlight

NBN Buzz is a weekly wrap up of everything that's going on with Australia's biggest ever infrastructure project. For previous editions go to our href="http://.Quigley under the spotlight

NBN Co boss Mike Quigley will be under the spotlight today as he fronts the joint parliamentary committee to provide an update on how the rollout of the NBN is proceeding, and the focus will very much be on why things are running behind schedule.  The fact that things were running slowly was already unveiled a couple of weeks ago but the entire issue was given fresh impetus this week when Quigley was questioned on it at the Communications Day Summit in Melbourne. The reasons for the delay were outlined in last week's column, however, it was the release of the latest set of invectives from the Economist Intelligence Unit that provided NBN detractors ample reason to draw the knives out again. According to the report, the Gillard government's decision to pour $36 million of taxpayer money into the NBN was an example of “extreme government intervention.”  It immediately led to a geography lesson from the shadow communications and broadband minister Malcolm Turnbull on just how profligate the government is with the NBN. Cuba, North Korea, China and Greece all got a mention but labelling the network as the last bastion of communism just shows how low the political debate has sunk. As pointed out in yesterday's edition the subsequent salvos exchanged between the NBN Co and its detractors has shown that arguing over numbers is a futile exercise, especially when the battlelines are set in stone. Each side will find ways to justify their view and rather than engage in this intractable conflict Quigley will be better served to ensure that the regulatory negotiations are laid to rest and the rollout picks up pace.

Pushing the anti-NBN buttons

However, there are those who argue that aside from the EIU's data, there's enough evidence at home to paint an adequate picture of where the NBN is at. As independent telecom consultant and a former member on Kim Beazley's ministerial committee on telecom reform, Kevin Morgan, points out this morning, a thorough examination of the first progress report on the NBN shows that cost blowouts are a real prospect and the NBN may not be the good news story that the government is hoping for. The article pretty much pushes all the buttons that the anti-NBN lobby loves to wax lyrical about at every opportunity with nothing new to add. Meanwhile, Royal Bank of Scotland's (RBS) Ian Martin also finds a home in the pages of The Australian this morning with the analyst pointing out that the continuing drop in revenue in the fixed telecom market as voice and data traffic move to mobile networks raises the issue of just how much the shortfall between the cost and value of the NBN will be, and how asks how will that shortfall be met? While fixed data traffic has more than doubled in the last three years, the growth is not being seen in revenue, and according to Martin, the proponents of the NBN have so far failed to adequately consider the question of why the $17 billion copper access network is being scrapped by a network that costs three times as much but may not deliver on the revenue side.  Martin argues one solution to the problem is to adopt a more sensible rollout, which entails using copper for longer, better use of wireless capacity and better targeted rollout of broadband capacity. That's the sort of measure that the coalition may choose to undertake provided it can dethrone the Gillard government at the next election. 

Steady as she goes with the ACCC

Switching back to NBN Co and the Australian Competition and Consumer Commission (ACCC), it's steady as she goes with the regulator's boss Rod Sims telling an audience at the Melbourne Press Club this week that the ACCC was happy to engage with the NBN, its access seekers and consumers in a constructive way to reach a favourable regulatory outcome.  The only point of concern was the need for an equivalence of outcomes so that there is a level playing field for all as the NBN rolls out. It's a point that Sims has made before and the signs are that a positive outcome will be found, however, Quigley's biggest concern right now is likely getting that favourable outcome as quickly as possible.  Meanwhile, the Australian Communications Consumer Action Network (ACCAN) was a touch sterner on NBN Co with the consumer advocate group taking exception to the 'anti disparagement' or gagging order clause in the $800 million deal between NBN Co and Optus.  The caveat prevents Optus from making any adverse statements against the NBN for 15 years, while advertising rival services. According to ACCAN, NBN Co's heavy-handedness in this matter was unjustified given that existing laws against misleading or deceptive conducts should be adequate to allay any fears.

Telstra's dark fibre and the sub-standard split

It wasn't all bad news for the NBN at the Communications Day Summit, with Quigley announcing that NBN Co had secured an agreement with Telstra for access to the telco's dark fibre to start beefing up its backhaul capacity. According to The Register the deal will provide the backbone for the NBN's transit networks, with Quigley unveiling a 10 Tbps core network running 100 Gbps interconnects to individual Points of Interconnect (POIs). This will be first of four transit networks that NBN Co hopes to build to cover not only its fibre access networks but also the wireless network. As The Register points out, incumbent carriers are not quite generous with the competition when it comes to dark fibre, so this is a clear indication of just how closely Telstra is willing to co-operate with NBN Co. Speaking of Telstra, a yes vote from the telco's shareholders on the NBN deal is pretty much a done deal and Internode's Simon Hackett has reportedly labelled the vote a meaningless exercise that will lead to a sub-standard structural separation and more delays in the rollout of the NBN. According to ZDNet, Hackett told the audience that Telstra's separation undertaking is wholly inadequate because it provides no explanation as to how it proposes to undertake the split. He warned that given the heat NBN Co was facing for being behind schedule on the rollout, Telstra's current offer was a "form of blackmail" designed to pressure the government to accept substandard terms. The Internode boss also pointed out the three mistakes the government has made in its approach and three solutions to the problems. However, they are all points that have been raised by him before and are unlikely to have any meaningful impact at this stage of the game.

Businesses don't get NBN: Roy Morgan Survey 

Finally, a Roy Morgan survey has reportedly shown that half of the businesses in Australia don't understand the NBN. However, while they might not have a clear picture of what NBN means, most will have little choice but to come onboard as their services will be migrated to the network as its rolls out in their neighbourhood. According to Arnnet.com, the survey showed that only six per cent of the 449 respondents had a clear idea of what the NBN was.  With regards to the remaining 94 per cent of respondents, 27 per cent had a good idea, 55 per cent had a rough idea and the rest had little or no understanding. Perhaps the more alarming fact is that 12 per cent of those surveyed said they saw no benefit from the NBN and 23 per cent didn't understand its purpose.