As Quigley drops his knitting, is Labor's NBN unravelling?

Does Mike Quigley's surprise support for an FttP-FttN tete-a-tete suggest that NBN Co is preparing for a change of government? Or is it just Labor's way to pre-empt a Coalition CBA?
Written by David Braue, Contributor

There are so many implications to NBN Co CEO Mike Quigley's recent surprise concessions — that the National Broadband Network (NBN) is struggling to find enough staff, and that perhaps it would be a good idea to engage industry to review available technologies — that, come election time, we may be remembering this as the week when Labor's NBN began to unravel completely.

NBN Co chief executive Mike Quigley
Image: Josh Taylor/ZDNet Australia

Quigley has steadfastly stuck to his knitting when it came to questions of non-FttP technologies. Asked in the past why he hadn't evaluated alternative network topologies for the NBN, Quigley's answer has invariably been that the NBN isn't planned by politics, and NBN Co's only responsibility is to effect the policy decisions of the government of the day.

It was a convenient excuse to toe the party line, but the fact that Quigley would now seemingly support what amounts to a cost-benefit analysis (CBA) of FttP versus FttN, informed and executed by industry, is a marked departure.

On one hand, it could be read as an effort to get the upper hand on the Coalition — to short-circuit that party's planned CBA by encouraging industry to conduct its own long called-for analysis, on its own terms and with its own input into the process.

Whether industry body the Communications Alliance will actually conduct the study remains to be seen. But Quigley's apparent support for the idea seems likely to give it legs. And since NBN Co is effectively managed by Communications Minister Stephen Conroy, this could even be read as an arm's-length effort to get some real facts with which to inform the upcoming election debate.

The other way to read Quigley's sudden change of heart is that he senses that Labor's days are numbered, and wants to be proactive about working with industry to plan for a change of architecture if the Tony Abbott and Malcolm Turnbull-backed FttN plan is foisted on the country later this year. After all, the telecommunications industry has spent much of the past few years aligning itself with the planned NBN, so if it's about to change dramatically, the industry needs to be ready.

Interestingly, the suggestion was violently rejected by Turnbull, who sees it as a "cheap stunt to distract attention from NBN Co's appalling record in executing the rollout". He wants as few numbers in support of Labor's plan as possible — which means that he wants the CBA done on his terms. He knows that an industry-driven analysis, coordinated in the current political climate, may well favour Labor's own policy — which would, later in the year, do considerable damage to his efforts to use a Productivity Commission-led inquiry to convince the industry that his plan is in fact the better option.

Turnbull wants as few numbers in support of Labor's plan as possible...He knows that an industry-driven analysis, coordinated in the current political climate, may well favour Labor's own policy.

Whether the industry would support the NBN in such an analysis or not, this is yet another headache for Conroy, who has worked his guts out to deliver real NBN outcomes before the election, but has recently run into a host of problems that take the shine off the January proclamations that the project has actually exceeded its targets.

Keeping the NBN's momentum going through February became much harder, due to one problem after another: Syntheo's failure to meet its own targets in Western Australia, South Australia, and the Northern Territory; continued coalition resistance; the hard reality that unexpected problems with NBN Co subcontractors mean that the network will struggle to meet the real rollout targets (as opposed to those that it concocts to sound like it's further progressed); and the knowledge that no amount of prodding Malcolm Turnbull will fix any of these.

Given these inconsistencies and the underlying issues with execution that they represent, Labor runs the risk of having the coherence of its NBN plan thrown into chaos that would make it more resemble the dog's breakfast that the Coalition is peddling. This would hardly enchant voters come September 14 — especially if Labor can't sell a convincing story that the NBN is on track.

It wasn't too long ago, you may recall, that NBN Co CTO Gary McLaren said that the NBN effort would reach its milestone of 6,000 households per day by the end of this year. However, all recent signs suggest that his optimism may be misplaced: The latest Clarius Skills Index (PDF), a quarterly index that tracks demand for a range of skills, named IT professionals the third most undersupplied market, rating it a "very high" skills shortage.

That's not great news for Turnbull's FttN, which will also rely on getting a large number of skilled telecommunications engineers on the job — and quickly, given Turnbull's commitment to delivering his NBN in around two and a half years to Labor's 10.

There is no guarantee that the Communications Alliance analysis will give a tick to FttN...This would see Turnbull arguing against the same industry he [needs] to execute his plan, which could lead him to offer all manner of concessions to Telstra in the hopes that it can just get the bloody thing done.

Then there is the role of the much-vaunted private sector, into whose hands the Coalition will all but place Australia's NBN future. That sector has already ruled out Turnbull's hybrid fibre-coaxial (HFC) plan as unworkable, and there is no guarantee that the Communications Alliance analysis will give a tick to FttN.

This would put Turnbull in the uncomfortable position of arguing against the same industry on which he would be relying to execute his plan; this, in turn, could lead him to offer all manner of concessions to Telstra in the hopes that it can just get the bloody thing done.

If Labor's problems contribute to a stronger case for a coalition government, they will not be because it has the better plan, but because Turnbull has not yet had the opportunity to crash and burn by actually trying to execute his own policy. The biggest take-home for Turnbull, no matter his outward opposition to a Communications Alliance analysis, is that skills shortages are real and will impact FttN as well as FttP.

Despite his optimism about costs and delivery timeframes, Turnbull's FttN network is hardly going to build itself. Any coalition NBN will face the same constraints on available resources as NBN Co is facing now — and even more so, since one expects coalition subcontractors to be under even greater pressure to deliver the FttN at the lowest cost possible. And while Conroy will be watching any industry evaluation for validation of his strategy, Turnbull should also follow it closely — and use its findings to inject some real figures into his own rhetoric.

What do you think? Are we seeing Labor's NBN unravelling? Will an industry evaluation help Labor or the Coalition? And would it help Labor set the terms of engagement for the upcoming election battle?

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