To Morrow, when the NBN war began

Summary:NBN Co is becoming a parody of itself as new CEO Bill Morrow strongarms would-be competitors and a multi billion dollar organisation justifies a 180-degree policy turnaround on the back of a single, non-representative speed test.

It is one of those unspeakable ironies that Bill Morrow, fresh from years spent trying to position the flailing Vodafone Hutchison Australia as a viable competitor to Optus and 800-pound gorilla Telstra, would begin his tenure  at NBN Co by using its size to crush the competition posed by one of the private sector's biggest operators.

Shevkal
NBN Co's declaration of war on competitors has reinforced its descent into farce. Shevkal image: Public domain.

That his full-ahead pincer move against TPG Telecom would be facilitated by a revised Statement of Expectations (SoE) from communications minister Malcolm Turnbull – in a move that exhausts Turnbull's last pretence of moral superiority but gives Morrow carte blanche to pursue new technology options – confirms that Turnbull has shifted NBN Co from well-meaning network builder to misdirected political plaything.

Originally designed as a wholesale-only network, NBN Co is now being targeted by telcos concerned that NBN Co may be gradually allowed to offer retail services.

This issue was raised years ago and seemingly quashed at that point, but telcos' recent submissions to Turnbull's Vertigan cost-benefit analysis (CBA) committee – including a corker from VHA that rails against a retail-focused NBN Co and slams "a litany of missed opportunities to deliver real market reform" and "a series of poor regulatory decisions that have... deterred long-term competitive infrastructure investment" – suggest concerns that scope creep could compromise everything the NBN Co was ever meant to be.

Telstra, for its part, is worried that "the dividing line between NBN Co's upstream monopoly and downstream competitive activities is too ill-defined and porous. NBN Co should be unambiguously prohibited from operating at the retail level." Pot, meet kettle.

Morrow has reiterated his support for an open, wholesale-only NBN Co, although the company's own Vertigan submission confirms there are exceptions if companies really want there to be. But that hasn't stopped him from sabre-rattling, openly attacking TPG Telecom's plans to build a fibre-to-the-basement (FTTB) network past 500,000 premises where NBN Co would really rather it didn't go.

The result? Days into the job, Morrow – who has taken the extraordinary step of calling for a tax on TPG  because of its FTTB ambitions – is already fully engaged in a war of words with one of Australia's largest telecoms operators.

His well-funded marketing machine rushed out a press release – pardon me, a "commercial response to cherry pickers" – that is effectively a declaration of war on any company bold enough to consider building infrastructure. Wherever you go, Morrow has made it clear, NBN Co will be there too.

Days into the job, Morrow – who has taken the extraordinary step of calling for a tax on TPG because of its FTTB ambitions – is already fully engaged in a war of words with one of Australia's largest telecoms operators....Wherever you go, Morrow has made it clear, NBN Co will be there too.

Sound familiar? It should.

Fifteen years ago, when Telstra chased Optus around the suburbs and ended up duplicating the rollout of pay TV, we lamented that its massive size gave it the ability to squash all competition and waste billions building redundant infrastructure.

A decade ago, when Telstra declined to roll out ADSL2+ in many of its exchanges until a competitor moved to do so, telcos complained that the 800-pound gorilla was unfairly exercising its market weight.

Of course it was. And these days, NBN Co is the new Telstra. We now have a government-funded monopoly threatening to bludgeon competitors as it bum-rushes our inner metropolitan areas in a race to beat its rivals to customers' doors.

It gets worse. Property owners will, NBN Co's cherry-picker manifesto suggests, be expected to sign up to NBN Co exclusively. After all, if building owners allow TPG in their basement, NBN Co won't be duplicating the service.

"A building that signs up to TPG runs the risk of being left with only one retail service provider," Morrow's statement warns. "TPG itself."

That's rather like the local water company threatening to cut off supplies to any business that takes out a bottled-water contract with Olinda Springs. But in the new anything-goes-but-FTTP world Turnbull has created, this is apparently the new normal.

NBN Co even draws on industry statistics to support its new mission: quoting a Communications Day survey, the company says that 47 percent of respondents were opposed to TPG's FTTB plans. That figure represents a mandate for hobbling TPG in the same way that the Coalition's 2013 election win represented a mandate for the reintroduction of knights and dames – that is to say, not at all.

Despite NBN Co's misgivings about TPG, it appears to be perfectly OK for Telstra and Optus to exclusively offer broadband services to their subscribers over their HFC networks, or even for iiNet (which bought TransACT, which bought Neighbourhood Cable) to do the same. No, TPG has clearly been singled out – and heaven help it if it tries to resist.

Turnbull has banged on for years about encouraging the private sector to invest in telecoms infrastructure, even if subsidies are necessary to make it happen. Yet, now that NBN Co is under new management, it appears any company building where it's inconvenient will be punished with the full force of Morrow's Law (come to think of it, if you squint a bit Morrow could indeed pass for Charles Bronson).

NBN Co isn't helping its case with its absurd decision to crow over the results of the trials of one – yes, one – fibre-to-the-node (FTTN) connection .... a blind, deaf, dumb and drunk Laborador could figure out that the results of one test over 100m of carefully-selected copper is hardly enough to green-light the rollout of any technology to around 6 million properties.

TPG's move to FTTB reflects what can only be described as a growing dissatisfaction amongst the telecommunications industry, which gave the previous Labor government the benefit of the doubt but is finding the current government to be all talk and precious little action. A collective shrug of the shoulders has seen conferences cancelled  and even putative supporters openly wondering how in the world Turnbull is going to get himself out of this one.

With all guns firing, appears to be the answer. But NBN Co isn't helping its case with its absurd decision to announce the results of the trials of one – yes, one – fibre-to-the-node (FTTN) connection as though it is somehow a validation of everything Turnbull has been arguing for for years.

Even the most casual observer couldn't miss the stupidity of publishing just one single test as some sort of conclusive result. And a blind, deaf, dumb and drunk Laborador could figure out that the results of one test over 100m of carefully-selected copper is hardly enough to green-light the rollout of any technology to around 6 million properties.

Is this really the best that more than 2000 of Australia's best technically-minded telco engineers can come up with? One test of one FTTN line?

Just to recap: it's been nearly a decade after FTTN was first discussed, and all we have to show in terms of actual technology trials is a single speed test, conducted in far better conditions than are typical, confirming that FTTN does, in fact, work.

I'm sorry, we have two readings; we shouldn't of course forget the blistering success in a single Sydney apartment block – almost a year ago – where a user did or maybe did not  get 49Mbps services over a VDSL broadband connection.

Oh, and a promised six-month trial of the technology that's contingent on negotiating widespread access to enough Telstra local-loop connections to produce something resembling usable results. At this rate, we'll have enough trial data points to justify a full FTTN rollout by somewhere in 2029.

Meanwhile, even the companies Turnbull cited as evidence for FTTN, are moving on: news suggests that AT&T, for one, is now pushing away from FTTN towards an FTTP alternative.

Industry leaders won't say it to the minister's face, but scuttlebutt suggests there is growing discontent with his scorched-earth approach to the NBN, which is undoing years of preparation and putting the entire telecoms industry into a precarious state. By the time Turnbull figures out what he's actually going to do to Australia's broadband, potential infrastructure builders will have walked away in disgust.

Worse still, it's all happening primarily so NBN Co can be steered from its original mission – instead becoming little more than an unconvincing mouthpiece for Turnbull's dysfunctional alternative NBN vision. Morrow may have helped turn VHA around, but even he will struggle to turn bullyboy tactics into good policy. Australia will be the victim as each new ill-informed move against competition makes NBN Co an even bigger parody of itself.

What do you think? Does TPG need to be reined in? Or is the competition actually healthy for NBN Co?

Topics: NBN, Australia, Broadband, Government, Government : AU, Optus, 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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