What does the telco industry really think of the NBN?

The Australian telecommunications industry’s future is under the microscope and the sector’s response has so far been found wanting.

The Australian telecommunications industry’s future is under the microscope and the sector’s response has so far been found wanting.

The National Broadband Network (NBN) is either loved, reviled or misunderstood by the Australian public but remains favourable for many and is almost certain to be an important issue at the next federal elections.  

So what do our politicians think about the NBN?

In the lead up to the recent Tasmanian election the Communications Minister Malcolm Turnbull said that the leader of the Tasmanian Liberal Party Will Hodgman “has definitely drunk the fibre-to-the-premises Kool aid.”

During a showdown on the NBN between the former Communications Minister Anthony Albanese and Turnbull in the lead up to the last federal election, Albanese said that the $94 billion cost for Labor’s NBN quoted by Turnbull was “pulled out of a Coco Pops packet.”

Kool aid, Coco Pops, it would seem the average politician is spending too much time kissing babies in supermarkets.

For the Nation’s elected representatives (the NBN wrecking crew) the NBN is a football, an elixir or something you find in a shop.

But what does the NBN mean to the Australian telecommunications industry?

We’re all one big happy family

On March 24 the Internet Industry Association (IIA) announced that it will shift responsibilities for its collection of industry codes to the Communications Alliance (Comms Alliance) and cease operations.

In a letter to the IIA’s members the chairman, Patrick Fair stated "It is with some regret that I write on behalf of the board of the IIA to let you know that at the last meeting of the board it was resolved to seek to transfer its operations to Communications Alliance and, in due course cease trading and seek to wind up the company."

The letter states that the organisations fund raising had failed to bring in enough cash for the association to continue. "Unfortunately the significant initiatives undertaken by the IIA last year and the recent very successful annual dinner had not been enough to maintain financial viability of the association."

The IIA provided a valuable service to industry members and consumers through initiatives including icode, SPAM Code, Gambling Code, Internet Law and guides for ISPs and consumers.

The IIA’s failure to attract members willing to contribute to the work being carried out by the association to “deliver the ongoing leadership and support needed to collectively drive our Digital Economy forward” is in part due to ongoing industry consolidation.

However, the IIA’s tag line “securing a fair and open internet” will not sit easily with some of Comms Alliance’s members who will be sighing with relief now that IIA’s activities have fallen to CA and can be quietly sidelined or refocused.

The loss of the IIA’s positive but waning advocacy for a range of industry and consumer related initiatives that often didn’t reflect the views of the telcos may not be felt immediately, but it will be sorely missed over time.

The Australian Communications Consumer Action Network (ACCAN) now stands as the last remaining communications consumer advocate organisation. The Australian government levies telecommunication carriers under section 593 of the Telecommunications Act 1997 to provide funding for ACCAN’s operation.

But Comms Alliance has set its sight on ACCAN’s demise.

In a CA response to the Department of Communications review on reducing the regulatory burden for business and the community ongoing funding of ACCAN was questioned "the approximately $2 million annual operating cost of ACCAN is funded by the industry, but ultimately borne by consumers. Concerns have been raised that while ACCAN strongly advocates on behalf of the specific interest groups within its membership, such as the disabled, vulnerable, and indigenous, it’s not necessarily well placed to represent the concerns of the vast majority of Australian telecommunications consumers.”

CA’s concerns that ACCAN is “not necessarily well placed represent the concerns of the vast majority of Australian telecommunications consumers” can be easily fixed by the government doubling or tripling the levy on Comms Alliance’s members so that ACCAN can expand its valuable work and have the resources to enter the regulatory and NBN debates with some authority.

To have the peak communications industry body taking pot shots at the peak communications consumer advocacy organisation speaks volumes about the state of the telecommunications industry.

Is the Communications Alliance helping?

The Comms Alliance overview states that it “was formed to provide a unified voice for the Australian communications industry and to lead it into the next generation of converging networks, technologies and services. Comms Alliance offers a forum for the industry to make coherent and constructive contributions to policy development and debate.”

The body will now absorb important codes developed by IIA, an organisation that supported Labor’s NBN. In August 2010, the IIA - a collection of 150 companies at that time - stated “The key to Australia’s broadband future is speed. Speed, and capacity give us the ability to move vast amounts of information across networks. It’s not a ‘nice to have’, it’s an essential part of a modern economy.”

In April 2013, at the launch of the Coalition’s NBN plan the Comms Alliance  chief executive John Stanton stated "My immediate reaction was that we now have both sides of politics committed to creating a ubiquitous high-speed broadband network for Australia. There's now more common ground on this issue than has been the case at any time I can remember. It's always a risky thing to forecast how technologies will be able to evolve or adapt. The reality is that the age and condition of the copper are indications that eventually you'll end up migrating to fibre-to-the-home. You'd expect that is the long-term likelihood but it is hard to be definite."

Has Stanton changed his views now that legions of nations have announced FTTP rollouts? Does he still think that copper will survive indefinitely?

In Comms Alliance’s submissions to the NBN Cost-Benefit Analysis and Review of Regulation chaired by Dr Michael Vertigan, it has taken the opportunity to argue for increased protection of its members, particularly from NBN Co’s perceived actions to discriminate against members - including existing broadband and infrastructure providers, and deregulation that will benefit CA’s members and a bigger role for private satellite operators.

Comms Alliance’s submission does not address the possibility that NBN Co would become a Telstra reseller when a FTTN NBN is built and what effect this would have on the industry.

Telephony would be much as it is now, utilising the Telstra PSTN and digital core. NBN Co could end up renting Telstra’s copper to build a FTTN NBN and this cost would be on top of the $11 billion to be paid to Telstra to lease infrastructure access.

It begs the question why did the Alliance’s members form the Competitive Carriers Coalition (CCC) in the first place to advocate for significant change in the telecommunications industry,  which in part led to the NBN?

Possibly because debate within the Comms Alliance is controlled by the largest telcos and CA is unable to adequately tackle internal debates on topics like technology change, competition, structural separation, etc.

Comms Alliance appears more concerned about maintaining the status quo and its “us versus them” position when it comes to its relationship with NBN Co and consumers.

Out from under a rock

The Australian telecommunications industry’s future is under the microscope and not for the first time the industry has been found wanting.

Comms Alliance represents all or nearly all the telecommunications carriers, yet it has not been able to put together a 5, 10, 20 or 30 year plan for the industry.

Ongoing disagreements within the Comms Alliance have led to the CCC, a breakaway group formed to present an alternate view, and one that has proved popular and critical of the status quo.

Over the decades since the early 1990s when the telecommunications deregulation process began there has been ongoing debate about how to put in place a competitive, fair and open telecommunications industry but if the Comms Alliance’s representations made to the various government reviews and audits are anything to go by we may have to wait a few more decades before this occurs.

What does the telecommunications industry really think of the NBN? We may never know.

Mark Gregory is a Senior Lecturer in the School of Electrical and Computer Engineering at RMIT University

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