To Morrow, when the NBN war began

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.

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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, Broadband, Government, Government AU, Telcos, Optus, Telstra, Australia

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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Talkback

18 comments
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  • Turnbull's incompetence.

    It goes to show the low levels Turnbull will go to defend his fraudband. For a man who has requested reviews upon reviews to try and discredit Labor's FTTP NBN, he has one doctored up test review to give his FTTN the go ahead. For such a huge decision and cost to be made on such little testing shows just how slapdash this government is.
    This government has done nothing more than juggle sets of figures to suite it's own agenda with the NBN, budget deficit and the carbon tax. It's alternate policies or lack of them leave a lot to be desired. To block private investment is a huge backflip on everything Turnbull has stood for in the past and it will be interesting how he tries to wriggle out of this one.
    Lastofthegoodguys
  • I'm bored

    Basically what I'm reading about the Liberal NBN cock-ups is EXACTLY what I expected when Turnbull came in.

    As I've said on many occasions - status quo. Australia will never get decent broadband. I'll always be stuck on ADSL1, and Telstra is the only game in town still. In fact just last week I was given qualification on 3 customer service lines from iiNet, given to them by Telstra, that only one of those service lines could carry an ADSL1 for the customer (which we would take - as the customer is currently pointing a Yagi at the heavily congested Forrestdale tower and it drops out every 5-10 minutes for 5-10 minutes). Call Telstra....funny how they CAN supply ADSL2+ instantly.

    Biggest wrought ever.

    They tell iiNet they can't do it then do it themselves. Monopoly to the max.

    And Turnbull wants to rely on Telstra even more by using the existing copper. Do you think we'll EVER get a true competitive fair deal? Keep dreaming.

    A true wholesale NBNCo would have been fantastic. We've now taken yet another step backwards. Pat on the back Malcolm - nice work.
    Ramrunner-5dd3e
  • There must be a hidden agenda?

    How can Turnbull be so incompetent? Denying the misguided use of FttN to waste our hard earned tax$. ...and now this? WTF is going on, are the LIBs that insane?
    bzdata2
    • Hidden Agenda

      There is one, its called the protection of Ruperts monopoly at all costs, after all he bought a government for them.
      BoomerMMW
    • Suggesting such things is perilously close to Conspiracy theory.

      Never attribute to malice that which is adequately explained by stupidity. I genuinely he believes his own hot air. Now if only those nasty fibre 'zealots' and know-it-alls would leave him alone.
      internerd
    • Maybe not hidden

      Turnbull was tasked with destroying the NBN

      He may actually be pursuing the not hidden agenda?
      richardw66
      • An election promise kept

        Have to agree with that.
        As much as I detest Turnball he is not stupid. He has been given the task of destroying and putting NBN into disarray by Abbott and delaying as much as possible (you watch how much blame gets spread around when things slow right down) without putting something of value as a replacement. And for such a publicly character destroying role he will be promised whatever plumb diplomatic position or some such he wants.
        br00dy
  • This field is required

    Keep up the good work calling it like it is.

    It's pity that MT is going to suffer for following the directive of the greater Liberal party.

    I think it's what they can 'a fall guy'....
    cabidas
  • unfolding

    I always said, I wonder who will bw dumb enough to tarnish their future career prospects by taking on the CEO and executive jobs M.T would be offering, guess they will try to save their reputations by pointing out, incompetent board and management run by idiot politicians.

    A Fool and his money are easily parted, problem is it will be the taxpayers money for Dross
    Abel Adamski
  • Responsibilty

    Whilst T.A, J.H and M.T are directly in charge, those I hold most responsible are the MSM commentators and Journalists whose either ignorant of the factors or venal or ideologically driven distortions are messing up Australia's future possibilities, even Chanticleer has blurted out an article.
    The trouble with Colonial Conservatives is they fail to comprehend the difference, their words are not only there for posterity but are readily available and easily disseminated to the public to hold them to account and the extent to which that can impact on their future professional reputations, either research in depth and get their facts straight and understand the issues or keep their traps shut.
    i.e M.T's comments re the Satellites
    Abel Adamski
  • TrueNet NZ FTTN measurements

    Time Australia started to get some facts working to assist consumer's internet experience. Check out the measurements of FTTN operating in NZ on TrueNet's website at truenet.com.au.
    It (VDSL) works, it delivers higher speeds and it is cost effective. It also works from exchanges immediately, no need to roll out any fibre, the "node" is simply the exchange.

    Especially check out this story: https://www.truenet.com.au/articles/adsl-vdsl-consumer-perspective
    truenetau
    • Yes, shitty

      Your link doesn't work, but the speeds they show on other articles show sub 20Mb speeds. Isn't that why the roll out has gone to FTTH. Turnbull doesn't mention NZ anymore because of the crap results they got from their FTTN
      Pilfer-52cec
  • This nations future in high tech is at stake...

    Nice to see a very direct piece covering these matters, now we just need a way for these sort of comments to get into the main stream mouthpieces for the LNP and other main stream press sympathetic to the Coalition:-)

    For what it is worth, the approach taken by our current Government is very destructive to the technology and telecommunications future of this Nation.

    We are loosing jobs left, right and centre in the manufacturing industries, our resource boom is slowing and there seems to be little thought put into where we go next.

    One would have thought that any Government would at least consider where this Nation wants to go. We are not particularly smart as a Nation compared to many other countries we like to compare our selves with and we seem to be dumbing down even more under this Government. The technology sector would certainly be one where new training and skills development could see the workforce develop into a more competitive one where we should even be able to create new jobs and exports. Any modern Nation needs good infrastructure, including telecommunications, to achieve a better future for all.

    There are many very smart individuals and small businesses, who could benefit greatly from a first class telecommunications network, but we are providing a stone age approach to what should be a first class universal access telecommunications network.

    Its not just about high speed Internet but about creating a uniform easy access network for all to use on equal terms.

    From a technical point of view, the network is no longer national, it is a mix of outdated short term "fixes" on multiple platforms. Only God knows if NBN Co will ever be able to pull together these diverse technologies to make anything resemble a uniform network interface to the end users - I think this will be impossible to achieve.

    There is no doubt that an all fibre network, to as many premises as possible, is the best solution long term, however, there are cost considerations.

    The overall goal should be to maximise the fibre roll out in a cost effective way. The fundamental ideas that Labour put in place, whether by sheer luck or genuine foresight, are very sound.

    Although Labour made some big blunders like trying to shoehorn fibre into every apartment in high rises instead of fibre to the basement with VDSL to the units, and some other items like not provisioning RF-Overlay (NBN Co could have a nice contract with Foxetel and others, for distribution of Pay-TV on RF-Overlay).

    Through my work I can say with some authority that the use of copper in the FTTN part of the deployment, will be a very risky proposition, cost wise. The state of the copper network in many areas is such that the costs to bring it back to a usable state will be very high.

    Information I have would indicate that the Coalitions plan calls for fibre to be deployed in such areas where the copper is in a poor condition, to expensive to rectify. However, the decision to not guarantee speeds any more would indicate that this is no longer going to be the case, instead the service will be put on the copper regardless of the performance.

    This will certainly save some money but will be little more than what ADSL2 can do today.

    Through past experience with large scale Coax/Fibre (HFC) deployments, it is going to be very expensive to change the network topology of the current HFC network and the end result will be a clumsy network interface and no upgrade path in the future - it is basically a dead end for any people living in the coverage areas of the Telstra and Optus HFC networks.

    There is technology available today which will allow the full GPON fibre deployment in the street exactly like you would for a FTTP deployment with the only exception being that you do not connect a fibre from the street tap to the premises. Instead a small dongle size piece of electronics plugs into the fibre tap and the existing copper to the premises gets used to connect to a small NTU in the building. The NTU powers the electronics in the street through the copper and VDSL is used to carry the data.
    The great advantage of this approach is the lower cost of deployment while maintaining an upgrade path should you want to replace the copper run with fibre. This way no nodes are required and the overall cost can be reduced. I know that advisers to Mr. Turnbull have looked at this but I think ideology and other considerations will have prevented this from being seriously considered in any form or having any cost benefit analysis done.

    Finally, on the political front, with all the lies and distortions put out by our politicians, it is almost impossible to know what they are thinking or if there are any hidden agendas, corruption or other dodgy thinks happening.

    One thing that can be said for certain, Mr. Tunbull has "stacked" the board, the review committees and other bodies tasked with generating reports which are supposedly "independent" so as to ensure the results are in line with the policies put forward.

    The end result of this is a non-national broadband network, not built for Australia and its future but a disastrous mess which leads to 3 classes of citizens, the ones on fibre, the ones on FTTN and the poor people on HFC. You would hope not to be in the HFC coverage area because you will never get any upgrade path to anything else.

    My personal opinion is that we will end up with a network which will likely have cost blow outs taking it to the same price projected for the original NBN, be somewhat outdated before it is finished and have built in restraints which can only be overcome by building an FTTP later. The life span of the network will be 10 years max before it needs replacing instead of the 40 years + the original network would last.

    It is beyond any common sense or comprehension that one would build such a poor network with such a short life span instead of spending a little more and getting a top class network for the next 50 years. I am not going to bother with detailed numbers because so many are thrown around but it is obvious that a network costing 50 Billion with a 10 year life span is far more expensive per year than one costing 70 Billion over 40 years.

    I am pretty sure a proper independent cost benefit analysis would show things pointing in that direction, that is why we are not getting one because that would not line up with the policies by our current Government.

    But hey, we, as a Nation, voted the bastards in so we have to live with the fallout and accept being a dumb Nation compared to our peers.
    tux2
  • No surprises

    We were promised that this would be a government of no surprises. I'm not at all surprised that they are methodically making the NBN we could be proud of into a nightmare that will do little more than entrench a Murdopoly.
    Postulator
  • always been NBN Co's approach

    Three years ago the Greenfields industry was mugged by NBN Co using public money and everyone stood by tut tutting turning a blind eye. We warned this was a cultural issue - not so sure you can pin it on Morrow.
    Rossyduck
    • Missing some key issues eh Rossy

      Plenty of disastrous el cheepo greenfields installed estates still out there, you must be proud of them.
      Plus NBNCo was made provider of LAST resort, take them on if you are happy with a long delay, quicker go a Greenfields contractor, but your News Ltd and LNP made such a fuss of the delays that NBNCo prioritised Greenfields, thus negatively impacting your Greenfield operators, not to mention in many cases the fibre backhaul was not available and they had to wait for NBNCo to have it installed rather than spend a fortune doing it themselves.

      Called hoist by their own petard
      Abel Adamski
  • Referee or Player

    When the government introduced competition for Telstra way back by allowing Optus into the market, they could no longer be owner of one of the players i.e. Telstra. Otherwise they would be both referee (regulator) and player. At the time of selling Telstra, the government should have broken Telstra into backbone (which it could have kept) and retail, but it wasn't and all the backbone went across with Telstra. NBN Co. is effectively wresting back the backbone to be held in Government hands where it cannot have competition. In this way they can cross subsidise the rural and remote areas with the lucrative metro areas. You just need to define what is backbone (government owned - no competition) and what is retail (government regulated).
    rogertheengineer
  • Nice Article

    At last an article that doesn't fall for the NBN / Government line. I don't care about the politics , I care about our country getting the right solution for the future and for it to be in a competitive environment. Sadly the new CEO Morrow is demonstrating that he is not up to the job of ensuring this is the case. To threaten TPG and then ask for a tax on those that dare to cable where NBN go shows a complete lack of knowledge of our history and what the right result should be going forward. Morrow has always loved being in the media and creating a headline and because of his close relationship with Turnbull we will no doubt see more of this nonsense. Sad really.
    Wazza11