TECHNOLOGY SPECTATOR: NBN Buzz - Playing rollout favourites

NBN Co's rollout schedule cops grief for giving Coalition seats short shrift, but the company can still have a future under a Coalition government.

Technology Spectator

NBN Buzz is a weekly wrap up of everything that's going on with Australia's largest infrastructure project. For previous editions and the latest news visit Technology Spectator's NBN Buzz page.

It's all about politics

The release of the three year rollout plan by the federal government has seen the expected share of brickbats thrown its way. While some have labelled the schedule as a cynical pork-barrelling exercise by the Gillard government to curry the favour of voters, with coalition seats missing out to Labor seats, others have revived fears that the NBN is going to go down in history as a colossal waste of money.

The release of the rollout timetable was always going to lead to finger pointing about the choice of the locations and unsurprisingly the Victorian government isn’t happy about being left out of the loop while Shadow communications minister and Coalition MP Paul Fletcher have taken the government to task for the "blatant political bias.”

The maps released last week reveal that its Brisbane rollout is strongly biased towards Labor seats, particularly the ones held by three of Labor’s most senior figures: Wayne Swan, Kevin Rudd and trade minister Craig Emerson.

The electorates of Lilley (held by Swan) and Griffith (Rudd) achieve 100 per cent coverage on the NBN maps. While in the electorate of Rankin (held by Emerson) all but two suburbs are covered by the three year rollout plan.

NBN Co has always maintained that the choice of location has always been dictated by technical needs and the fact that the network needs to rolled out into areas (rural, regional) where it is needed the most. Now, that’s not to say that there isn’t a certain amount of political bias at work here but I wouldn’t be surprised to see a similar scenario if the shoe was on the other foot.

While NBN Co is unlikely to lose much too much sleep on this issue, it will be little ticked off by the assertions of former head of NSW Treasury and president of the Australian Institute of Public Administration, Percy Allen, who has told The Sydney Morning Herald  that Labor’s NBN will be a financial disaster.

Now, this isn’t exactly new news but with NBN Co already 15 months behind schedule this is one area where there is just no room for slip-ups and it’s certainly something that the company doesn’t need reminders on. Allen has told the paper that a lower than expected take up rate will end up making the NBN an expensive failure but the way things stand at the moment the  public can’t seem to get on board the network quick enough.

NBN Co after the election

As the public continues to pore over the rollout maps to figure out when the network is coming to their neighbourhood, there should be a distinct surge of satisfaction inside the boardroom at NBN Co .One certainly gets that impression listening to NBN Co boss Mike Quigley who is no doubt enjoying the prevailing mood of expectancy in the public. After all it wasn’t that long ago that the critics of the project were pointing out that no one actually wants the network but as it turns out all the talk now is about how quickly can the NBN be rolled out in their neck of the woods.

This rush to the NBN shouldn’t be characterised simply as the public waking up to the benefits of the network. The distinct prospect of a change at Canberra next year is most likely proving to be far more potent incentive for everyday Australians, with most sanguine that a Coalition government will stop the NBN in its track. Faced with such a prospect you would certainly want to be on the network by the time the federal election rolls in. However, stopping the NBN in its tracks is easier said than done and that’s certainly the view of analysts at Commonwealth Bank, who say that the network is already crossed a point of no return.

According to CBA analyst Alice Bennett, developing an alternate strategy will take much too long leaving the Coalition with little choice but to push on with the NBN in its current form.

While the Coalition hasn’t provided too much detail on its plan, it’s more than likely that Malcolm Turnbull has something up his sleeve. However, getting that plan through the senate will not be easy and let’s not forget that Turnbull would need to renegotiate a new, potentially costlier, deal with Telstra.

Herein lies another positive for Quigley and NBN Co: the Gillard government may get caned at the next election but the NBN Co will still be crucial part of the Coalition’s alternative. The fibre backbone that is being put on the ground right now will be just as invaluable to the Coalition as it is to Labor.

The final regulatory tick

With all the attention focused on the rollout it’s easy to forget that the regulatory tangles that have held back NBN Co so far are not completely over. The ACCC is yet to sign off on NBN Co’s structural access undertaking although the regulator has closed the book on any further submissions form the telcos. The telcos have stuck to their guns with regards to their criticism of the SAU, with Optus taking aim at both the lack of stricter regulatory insight and the pricing regime.

The harping about regulatory oversight shouldn’t come as a surprise; after all it has been a key feature of the process, ever since NBN Co lodged its SAU with the regulator in December. The SAU would set out the terms of access over the 30 years of NBN Co's corporate plan, which was released in late 2010. So is Optus’ dire warning really going sway the ACCC? Probably not, as far as the regulator is concerned it has undertaken a rigorous process to ensure that all no stone has been left unturned and everyone has had a say.

NBN Co's new CFO and the trouble with 2GB

Finally, NBN Co has ended its search for a new chief financial officer with the acting CFO Robin Payne getting the gig on a permanent basis. Payne took over as interim CFO in January after the departure of former CFO Jean-Pascal Beaufret and frankly he was always in the mix to get the job for good.  NBN Co did implement an eight-month search process but giving the job to an internal candidate probably makes sense as the NBN enters a critical stage.

Meanwhile, with the NBN message now being spread far wide across the nation, NBN Co, this week found itself in the unenviable position of having to rely on the ‘shock jocks’ at 2GB to say something nice about the network. Actually, they were meant to read out simple message about the rollout, minus the political editorial, but as it turns out it proved to be too difficult a task. NBN Co is spending a bit of cash to get the rollout information on the airwaves but has now decided to move the ads from 2GB. The station’s reach within the public is undeniable but given the conservative track record of the presenters something like this was bound to happen.

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