NBN Co is a text book example of why Government Business Enterprises (GBE) attract criticism. In 2017, the company’s government-appointed senior management team is set to bumble along with a failed business model, whilst rolling out obsolete Fibre to the Node (FTTN) technology to about six million premises.
NBN Co CEO Bill Morrow told the ABC Radio’s AM program on last week that the Government’s $19.5 billion loan to NBN Co was not a bail-out, and that NBN Co could have raised the funds from the private sector.
He told the ABC that “we did not actually tap into the banks to start the process but the government stepped in and said they would loan it to us rather than have us go to that market.”
“No it wasn’t a rescue at all. It was clearly just prudency and managing taxpayer’s money than leaving it to us to go to the external markets.”
In 2013, the Coalition were warned by Australian experts that rolling out obsolete FTTN would reduce the value of the National Broadband Network.
And management consultants KPMG supported this view last year in a report that estimated that the NBN value would need to be lowered by about 50 per cent before private investors would become interested.
Fear of a voter backlash if a request for private funding of the second-rate NBN led to a deal that was anything other than ideal forced the Prime Minister Malcolm Turnbull to act.
In 2010, the Coalition party leader Tony Abbott instructed the newly appointed shadow communications spokesman Malcolm Turnbull, to “demolish” the NBN.
Stumping up a further $19.5 billion that adds to the $29.5 billion already committed seems a remarkable way for the Turnbull Government to “demolish” the NBN.
By now Mr Turnbull must realise that the decision to rollout FTTN was a can of worms that he will not be able to contain before the next election, and yet he has made no move to correct this policy mistake. Advances to technology continue apace, and Australians are increasingly aware that the Coalition’s NBN plan is a dud.
NBN Co is now spending an inordinate amount of money of public relations and spin in an effort to obfuscate what is actually happening.
The decision to shift to the Multi Technology Mix (MTM) was always going to be a train wreck, and Mr Turnbull cannot avoid personal ownership for this disaster. It will be his legacy.
True to form, Mr Morrow recently rejected the widespread claims that there has been a reduction in transparency at NBN Co.
Speaking to news.com.au on February 5, Mr Morrow said that “today you can go on and no matter who you are, log onto the website and find out when you can actually begin to order a broadband service that uses the NBN. That was never the case before.”
“We’re still refining that, we still have other details we need to add. It’s not that we’re removing anything, it’s just an evolution of the website that starts first with what people are asking about most. We seldom if ever get a call or a request about what technology it’s going to be,” he said.
Mr Morrow’s statements, quoted by news.com.au, are false and the Communications Minister Mitch Fifield should instruct him to withdraw the remarks, assuming news.com.au accurately reflects Mr Morrow’s statements. It is unacceptable for the CEO of a GBE to publicly make incorrect and misleading remarks in this way.
I entered my home address into NBN Co’s “check your address” page and received the statement “we are still finalising the plan for this area and expect to have more information about availability soon.” My experience has been no different to that by many others over the past three years.
Complaints about the lack of transparency at NBN Co are widespread. NBN Co has removed the technology area rollout maps and updates. Information about premises identified as Service Class 0 (SC0) [in the too hard basket] and the time it takes to move premises from SC0 to ready for service was promised and is now even harder to ascertain than it was before 2014.
Information about technology design rules (including FTTN and HFC), performance standards, what is actually being provided to customers and so on are not being made public – and for good reason – because we would see firsthand how shambolic the NBN has become.
Concerns about NBN Co’s lack of transparency are now being voiced by the broader telecommunications industry and last week, Telstra announced that it would publish NBN performance information because NBN Co was leaving consumers in the dark.
Telstra CEO Andy Penn told the Herald Sun News Corporation that “not all experiences are the same, not all NBN services are the same.”
“The industry should be publishing the speeds that they are delivering across the various technologies and we’ll be absolutely preparing ourselves to be able to do that. What’s critical is that the industry comes along on that journey so there’s no game-playing.”
It takes some gall to front the media, to make claims that ignore the facts, and to publicly support the government’s policy.
But this is what we’ve come to expect from NBN Co and after three years of ‘alternate facts’, it is disappointing to see that 2017 is already off to such a bad start.