TECHNOLOGY SPECTATOR: NBN Co's corporate showdown
NBN Co stares down accusations from Telstra, while revelling in proof its satellite tactics aren't "highly unusual".
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Can I park here?
NBN Co Mike Quigley has some ammunition to fight allegations from opposition communications spokesperson Malcolm Turnbull that launching a satellite without an orbital parking spot is "highly unusual”.
The pair locked horns once again in parliament this week, this time over the issue of where NBN Co will put its satellites in the event that it doesn’t have official permission. Satellites have to secure orbital parking spots and while NBN Co doesn’t have to launch its two satellites until 2015, these spots can be hard to come by. Australian satellite company NewSat has been active in making this known to the market, as it encourages the federal government to rent theirs instead.
Turnbull argued that this is a strange situation and threatens the $660 million in taxpayer money set aside for the two satellites NBN Co needs to service the 7 per cent of Australian residents that won’t be touched by the NBN’s fibre footprint. Quigley conceded during the hearing that if NBN Co can’t secure the parking spots it wants and has to park them somewhere else, the satellites will have to be modified at a cost.
However, NBN Co has subsequently quoted the United Nations International Telecommunications Union saying that it is possible to purchase a satellite without booking an orbital slot. NBN Co has applied to the ITU for four slots and the Geneva-based agency says its possible to purchase satellites in advance of a position being finalised. "So long as there are no regional objections and the ITU registration process is under way, an operator can proceed with its launch plans,” the ITU said in its advice.
This doesn’t sound like the "highly unusual” situation Turnbull would have us believe is afoot.
CommsDay NBN talk down
Much of the NBN debate this week has emanated from the CommsDay Summit in Sydney. Turnbull spoke there, where he emphasised that many of the benefits of the NBN could be achieved through a fibre to the node network, rather than fibre to the home. The other benefits that wouldn’t be achieved by FTTN aren’t worth the extra billions in Turnbull’s eyes. Indeed another analyst has emerged to warn that the NBN could easily blow its budget.
Internode chief executive Simon Hackett took some time out from fusing his business to iiNet to make an appearance at the summit to argue that the NBN-inspired consolidation in the industry is almost coming to an end. This week M2 Telecommunications picked up the Australian business of global telco Primus for $192.4 million. M2 might hope to become a niche player for small business, but the big boys rule the roost in NBN land. Telstra, Optus, TPG and iiNet control roughly 90 per cent of the fixed-line broadband market base, leaving little room for a significant fifth force.
Hackett also spoke out against the anti cherry-picking legislation that prevents ISPs from building their own high-speed networks, arguing that it threatens innovation. The legislation is ostensibly crafted to prevent another player building a network that threatens the NBN’s business model, but Telstra and Optus are the only ones really capable of doing so and they’ve already signed their deals with the government that include promises not to do so.
Hence, the legislation now only stands to prevent smaller ISPs from perhaps doing something innovative with a small business for example. It’s possible. But then again the NBN will allow enormous amounts of innovation across the economy, for businesses great and small.
Telstra’s big week
On the flipside of that counter-argument, Telstra chief executive David Thodey says there isn’t yet enough focus from the government on what business will do with the NBN once it’s up and running. Speaking to the Queensland Media Club in Brisbane this week, Thodey said he remains sceptical about whether business will be able to use the increased broadband capacity to innovate in the way the broader community is expecting.
"It is not going to be about the rollout of fibre to 93 per cent of homes which will be the issue. It is what the hell we do with it," Thodey told the audience. "And I'm not yet convinced that there is enough focus on the innovation and the different ecosystems that we need to put around that, even from educating people about how to use it."
Indeed, Telstra is also worried that it’ll have to sack workers if it doesn’t win contracts associated with the rollout of the NBN fibre network. Telstra is expected to announce a share buyback plan today, paid for by the proceeds of its $11 billion deal with the government. But the telco is also warning that it’ll have to let go a number of employees as its copper network is shut down, as per the agreement, unless it can find something else for them to do.
Of course, they could probably secure a job with whoever beats Telstra to these contracts, something the telco’s executives have acknowledged.
Perhaps some of them might be able to secure a job at research and development giant SAIC. The global company says it will create 50 news positions over the next three years by creating a regional cyber security research development centre in Melbourne as a direct result of the NBN.
Meanwhile, the federal government says that it will review how the freedom of information laws apply to NBN Co. Attorney General Nicola Roxon announced the review on Monday amid concerns that some of the exceptions that NBN Co enjoys stifle information that could be in the public interest. On the flipside, the parliamentary grillings that the company’s boss gets keep the network’s movements in the public eye.
And finally, some residents in Hobart are gearing up for the fibre rollout in Australia’s most pristine state. NBN contractors are preparing to roll out fibre to the inner suburbs of Hobart and on the eastern shore.