FttP or FttN, the NBN is already slipping from Turnbull's grasp

Summary:As if a slowdown in the NBN rollout weren't problem enough, Communications Minister Malcolm Turnbull's NBN Co has been hit by lawsuits, subcontractor chest beating, and protracted timeframes for its Telstra renegotiations. Has he already lost his grip on the NBN?

Surely, despite all of its rhetoric and vitriol over the years, this is not how the Coalition wanted the National Broadband Network (NBN) to become.

Two months into Malcolm Turnbull's watch as communications minister, the NBN — which he promised to deliver "sooner, cheaper, and more affordably" — is in truth slowing down dramatically.

According to NBN Co's latest rollout figures, some 6,685 premises were connected in October, compared with 39,115 in September, 33,185 in August, and 18,072 in July. Just 3,082 additional connections were installed in the last week of October; compare this to 8,957 connections installed in the week ending July 14, when the rollout was (by comparison) humming along.

Cliffhanger
Is Turnbull already losing his grip on the NBN? Image: Screenshot by David Braue/ZDNet

At the current rollout rate, NBN Co will have connected less than 500,000 new properties by the 2016 deadline, when Turnbull has promised to complete the first stage of his NBN.

And that's assuming things don't slow down further. But they may: Contractors would all be watching closely as Visionstream — which recently denied claims that it had stopped work in Tasmania demands more money to finish the job it was contracted for and Turnbull insists the company's contracts will only be honoured if it holds up its side of the deal.

Meanwhile, NBN Co has been sued by Telstra for a significant sum over the calculation of instalment payments (payments, by the way, for something that's not actually happening as was expected). Then there's the renegotiation of the deal with Telstra, for which the government has advertised for someone to help it renegotiate its deal with Telstra — and listed a rather optimistic timeframe for delivery of June 30, 2014.

And that's just for the negotiations, mind you: Implementation of any changes would take months after that, potentially requiring confirmation by Telstra shareholders at the company's AGM next October. That would push the commencement of Turnbull's alternative NBN policy to the beginning of 2015 at the earliest — at which point he will have less than two years to roll out the new topography to millions of homes across the whole of Australia.

The government has advertised for someone to help it renegotiate its deal with Telstra — and listed a rather optimistic timeframe for delivery of June 30, 2014... That would push the commencement of Turnbull's alternative NBN policy to the beginning of 2015 at the earliest, at which point he will have less than two years to roll out the new topography to millions of homes across the whole of Australia.

It's an impossibly tight timeframe, made even more problematic by the fact that the NBN under Turnbull's watch is so far going nowhere, and fast. This sort of hiccup might be expected during such a major transition — except for the fact that one of Turnbull's first moves as communications minister was to order that existing FttP rollouts were to continue as usual.

That proclamation would have been an effort to prove that he was not going to "demolish" the NBN — as Tony Abbott so famously tasked him to do three years ago — but that he was going to conserve its momentum in an outward show of progress while he figured out what, exactly, he is going to do to the rollout.

The industry, however, has been covering its own backside and, judging by the precipitous drop in rollout figures, seems to have become disinterested in continuing the rollout apace.

Visionstream's intransigence reflects a groundswell of private-sector self-interest that is likely to spill over as the new government is hit with union negotiations, work stoppages, contract renegotiations, and other obstacles as the industry attempts to reset the terms of its NBN engagements.

Interestingly, NBN Co says the network rollout has stalled because of the asbestos-in-pits issue, and not anything Turnbull has done. Yet here, again, is a side effect of Telstra's fundamental apathy towards the NBN: If it were truly interested in helping the rollout proceed, it would have dealt with the asbestos issue a long, long time ago. Telstra has a financial interest in dragging out the NBN deployment as long as possible — so how can Turnbull believe it will do otherwise?

After years of professing his faith in the private sector's ability to improve broadband, Turnbull is already coming face to face with the challenges his predecessor faced every day: A fierce and difficult Telstra that has defied Turnbull by suddenly deciding that its ageing and decrepit copper has value after all; a private sector largely unprepared to contribute the kind of capital needed to compete with the incumbent; and a discordant construction sector that has shown that it truly does not care whether the NBN lives or dies.

Many took it as a noteworthy mea culpa when Stephen Conroy recently admitted that he had overestimated the industry's ability to execute on his NBN design. What Turnbull is now, painfully, learning is that the problem was not necessarily all about Labor's vision — but rather the inability of the telecoms and construction sectors to help realise it.

Those issues have outlasted the Labor government. And while Turnbull may have surrounded himself with ex-Telstra cronies with whom he feels an ideological sameness, successful execution of a project like this takes a lot more than committee meetings and mutual pats on the back.

Turnbull needs to grasp the nettle and figure out a way to at least keep the existing rollout moving at its current speed, or his capability as a guide for the telecoms industry will be rightly questioned — and his ability to actually deliver any kind of NBN, FttP or FttN, in real jeopardy.

Without even grudging support for the status quo from Turnbull, the project will simply collapse under its own weight; in such an eventuality, he would surely struggle to restart the rollout on the backs of a disaffected construction sector and a reluctant Telstra that was never supposed to be relied upon to such a degree to complete either model of NBN.

Turnbull needs to grasp the nettle and figure out a way to at least keep the existing rollout moving at its current speed, or his capability as a guide for the telecoms industry will be rightly questioned — and his ability to actually deliver any kind of NBN, FttP or FttN, in real jeopardy.

Like a duck swimming on the water, there is likely more going on under the surface of Turnbull's quiet determination. But his only real deliverables so far are the cleansing of old rollout plans and the publication of weekly updates on the rollout's progress — much-vaunted transparency that provides unprecedented ammunition with which to track his progress in meeting what are extremely ambitious rollout targets.

Indeed, with every new pronouncement, those rollout targets seem ever more elusive. Barring a miracle, Turnbull will next week likely blow past the very first deadline he so emphatically set for himself — the 60-day review of the NBN's operations, which before the election he had promised would be completed by November 11 (although to be fair, I gave him until November 17, counting from the day the government took office).

Missing his own deadlines — including Tony Abbott's promise of an updated NBN Co business play by December 27 — will do little to reinforce the authority of the new government as one that gets the job done.

Turnbull's very authority as communications minister is being put to the test here, and he will need to be unafraid to put his foot down — whether by pursuing go-slow contractors for breaches of contract, or by more aggressively pursuing a contract renegotiation with Telstra. If anaemic industry engagement means he simply cannot muster the might to keep the industry to his own timelines, Turnbull may find the entire NBN effort is slowly slipping away from him.

What do you think? Is Turnbull delivering on his promises? Does he have a larger plan? And does he have the political and market will to help the NBN regain its momentum?

Topics: NBN, Broadband, Government : AU, Telcos, Telstra

About

As large as the US mainland but with a smaller population than Texas, Australia relies on ICT innovation to maintain its position as a first-world democracy and a role model for the developing Asia-Pacific region. Award-winning journalist David Braue has covered Australia’s IT and telecoms sectors since 1995 – and he’s as quick to draw le... Full Bio

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