Michael Sainsbury
May 29, 2016

Ziggy's unwanted election entrance

NBN

Ziggy's unwanted election entrance

Digging a hole: There's plenty of flouro for the PM out in Voterville

NBN chairman Ziggy Switkowski’s entry, in the middle of an election campaign, into the growing furor around the company’s decision to call in the Australian Federal Police to investigate a serial leaks is extraordinary for many reasons.

The man behind the curtain of Malcolm Turnbull’s controversial Multi-Technology Mix network has decided to reveal himself. As usual, timing had proven not to be the strongest suit for Dr Switkowski, who famously bet Telstra’s entire offshore strategy on a $5 billion deal with Hong Kong’s PCCW only weeks before the dotcom bubble burst in 2000.

His lengthy opinion piece in The Age and Sydney Morning Herald on Saturday has, for the second time in two weeks, allowed Labor to latch onto the issue of the NBN and bring it into an election campaign where the Prime Minister – the creator of the Frankenstinian successor to the original 95 per cent fibre-to-the-premises plan – surely does not need it.

Dr Switkowski’s highly defensive essay was completely free of any numbers and is likely to amplify attention on the network, rather than to calm fears about the core issues raised by the leaks.

In fact, Dr Switkowski has quite clearly elected not to address the issues of network quality at all in his piece.

Instead, he chooses the deliberately narrow criteria of whether NBN Co as a corporate entity has delivered on a business plan hatched a year go, well after the game-changing decision to switch from a largely FttP network to one using a patchwork of technologies that includes the hybrid fibre coaxial cable originally deployed for pay TV, and Telstra’s copper “last mile network.”

The reason is that, despite deciding to back the second rate NBN when appointed as NBN’s executive chairman in 2013, Mr Switkowski actually understands how second rate the mixed-technology solution really is.

In 2003, at the height of Dr Switkowski’s tenure at Telstra at a Senate estimates hearing Tony Warren, now group communications chief at Telstra has this to say:

"I think it is right to suggest that ADSL (broadband using Telstra’s copper network last) is an interim technology. It is probably the last sweating, if you like, of the old copper network assets. In copper years, if you like, we are at a sort of transition – we are at five minutes to midnight."

Mr Warren’s boss, one of Dr Switkowski’s most trusted lieutenants Bill Scales, then elaborated that those five minutes could be “10 maybe 15 years. That’s between 2013- 2018.

Then, in 2009, nicely clear of the telecoms sector, Dr Switkowski has this to had this to the Business Spectator:

“I think the fibre network would overtake the copper network and replace it. After all, if you have national fibre network, which provides you with Internet-based telephony, and video, high-speed Internet access and IP television, that provides you with much greater functionality than copper, and presumably at a future speed which is considerably in excess of what ADSL can offer.”

“I think an all-fibre network is a desirable end point, and along the way it will render obsolescent the copper network.”

A related question is whether Dr Switkowski ever really knew about the real state of Telstra’s copper network that was part of Telstra’s $12 billion deal-of-the-century on the NBN.
As a relative neophyte at Telstra – he only had five years as the executive in charge of business customers at the company – before stepping up as CEO in 1999, he never had any direct experience or responsibility for its copper networks.

He should also have understood both the extra expense and potential for problems that installing raft of extra information technology systems into NBN Co to support the different technologies would bring.

Rather than having a relatively clean and simple IT platform, NBN Co now has a far more complex networks of operations and business support systems (BSS and OSS).

Customer angst about the NBN appears to have shifted somewhat: Those who don’t have it other remain angry that they don’t or resigned to getting it whenever it comes – but anecdotal evidence suggests that many customers who have recently connected to the network are finding it problematic.

With so many services now delivered over one pipe, when network connections fail, it’s like having the electricity go off for communications. It is an essential service, after all.

And so, back to Dr Switkowski’s timing. A somewhat surprise intervention in the midst of an election campaign, on what is very much an election issue. The size of the issue depends very much on a voter’s location, right down to suburb and side of street upon which they live.

Has he done this at the behest of the Prime Minister, or his Communications Minister Mitch Fifield, who has said that he did inform his boss or indeed anyone in Cabinet of the AFP complaint?

Did the PM himself ask his old mate? Or has he done it off his own bat, eager to shore up a reputation in the telecoms sector that already carries more than a few dents?

Labor has claimed that Dr Switkowski breaches the caretaker rules that govern elections.

"Dr Switkowski's intervention is a clear breach of the Caretaker Conventions and the Commonwealth Government Business Enterprise Governance and Oversight Guidelines," Opposition finance spokesman Tony Burke wrote in a letter to the head of the public service Martin Parkinson.

“I ask that you immediately undertake inquiries in relation to this matter’ he added, in relation to whether Mr Turnbull or Senator Fifield encouraged the NBN chairman to speak up.

Dr Switkowski knows better than any executive in Australia how politically charged the issue of telecommunications can be in Australia and is nobody’s fool, so it was a calculated move.

After all, he is the only person to have run both of Australia’s major telecoms companies – Optus and then Telstra – before being pushed out of both.

It is still bewildering to this essayist that Dr Switkowski took on the NBN when his roller-coaster career in the Australian telecommunications sector was receding nicely in the rear view mirror as he carved out a nice portfolios of corporate board seats.

Perhaps he was hoping it would be third time lucky.

Despite his assertions over the weekend, there is gathering evidence – be it from whistleblowers or, as Dr Switkowski described them “ideologically driven” “thieves”, as well as from end users – that it will not be.

All the blather in the world about hitting corporate targets by Dr Switkowskiv– targets which are made to be hit and seem to be moving ones at NBN Co – can’t get around the fact, to play on Mr Warren’s words in 2003, that it’s midnight in Australia’s telecoms sector.

And Dr Switkowkski, and his former boss Communications Minister Malcolm Turnbull, have left Australia with an NBN that is looking for all the world like a pumpkin.

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