TECHNOLOGY SPECTATOR: A misguided NBN Co inquisition

Malcolm Turnbull's strategy to question the competency of NBN Co might make for good politics, but can the Coalition really make the company any more effective?

Technology Spectator

Malcolm Turnbull made two notable speeches this week, one attacking the pernicious threat of the federal government’s proposed mandatory data retention regime and another criticising the misguided priorities of a less than competent NBN Co. Both speeches were delivered with great aplomb, something that we have come to expect from the shadow communications minister, and both were interesting for different reasons.
While Turnbull’s lofty phrases against the dangers of data retention sent many a hearts aflutter, his display at CommsDay Melbourne Conference was a decidedly defensive affair, highlighted by an insistence that the NBN debate had been hijacked by pro-NBN ‘media apologists’, unfairly targeting the Member of Wentworth’s attempts to seek accountability.

In all, an ever erudite Turnbull did make a few things crystal clear. The Coalition has woken up to the fact that the NBN could once again mean the difference between success and failure at the next elections. This realisation is manifest in Turnbull’s recent rhetoric – the Labor NBN isn’t bringing broadband to those who need it most and the NBN Co’s board needs an overhaul, because it has botched up the rollout.

According to Turnbull, the problem starts at the top, with NBN Co chief executive Mike Quigley, and is further magnified by a board consisting of "five former bankers, two former McKinsey consultants, two former equipment vendors, but no former telecom executives".

Perhaps it’s a precursor of what lies in store for NBN Co post-election, with Quigley’s crown placed on the head of a veteran telco executive. Some have suggested talent from Telstra might be a good fit but why stop there, maybe Simon Hackett could be persuaded to take the job. Jokes aside, the injection of telco execs into NBN Co’s management might sound good in theory but doesn’t exactly guarantee smooth delivery.

However, the one point raised by Turnbull that is not in dispute is that the rollout has struggled to hit targets. There are valid reasons for why the process was slow to get off the ground and perhaps the best retort from NBN Co came yesterday with the announcement that the clock has started ticking on the copper connections for 25,000 homes.

With NBN Co unveiling the name of the first locations to take part in the 18-month switchover from copper to the fibre, Quigley and his team has scored a valid milestone but the trick now would be to ramp up the pace of the volume rollout of the network.

According to NBN Co, it now has 30 times as many end users as it did in the middle of June last year. The number of active users is up to 24,000 but keep in mind this number is for all technologies and Quigley would dearly love to see fixed-fibre account for a lot more of the active users. The other metrics are in the table below.

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For now, NBN Co is sticking to its target of 3.5 million premises under construction or connected by June 2015 but sticking to this target will now need to be a focal point for the company. Any missteps now will further embolden the Coalition’s argument and Labor’s grand broadband vision doesn’t amount to much unless the public can see tangible benefits.

While Quigley’s commitment to the current NBN vision, his passion for the job, cannot be questioned, it might be worth considering whether the company has sufficient engineering expertise to keep the rollout on track. That is not to say that Quigley and his board are not the right people for the job, but perhaps there is scope for some scrutiny at an operational level, where some personnel might be out of their depth.

There is a substantial bureaucracy at work at NBN Co and to somehow expect that Quigley can keep track of every task is unrealistic. So making him the target and peddling the idea that somehow a post-election overhaul of NBN Co management board will deliver services quicker to Australians should not be seen as a certainty. The only way the Coalition can deliver on that promise is by changing the technical strategy and curtailing the scope of the Labor NBN.

A wholesale regime change at NBN Co, at the behest of a victorious Abbott government, will not only fail to address the existing issues at the operational level but will almost certainly disrupt the organisation to such an extent that existing rollout work will be impaired.

With NBN Co reportedly attempting to negotiate new long-term contracts with construction companies, ones that will formally lock the company into four-year deals, and ensure that a Coalition government has no choice but to comply with the existing rollout strategy, Turnbull may be left with very little room to manoeuvre. Dethroning Quigley won’t solve that problem and if anything make it harder for the Coalition to get cracking with its NBN policy, which they are so fond of keeping under lock and key.

Questioning the competency of Quigley and his team might help propel the Coalition’s rhetoric that NBN Co is another symptom of a profligate Labor government. But destabilising the company could well prove to be a counter-productive measure that does nothing to bring broadband access to Australians, quicker or cheaper.