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Conroy's Six: Can FTTN's gatekeepers deliver?

Post-election adrenaline surging through his veins, one of the first acts performed by new Communications Minister Stephen Conroy was to disband the expert panel that his predecessor Helen Coonan had appointed last June to evaluate tenders for fibre-to-the-node (FTTN) construction.
Written by David Braue, Contributor

Post-election adrenaline surging through his veins, one of the first acts performed by new Communications Minister Stephen Conroy was to disband the expert panel that his predecessor Helen Coonan had appointed last June to evaluate tenders for fibre-to-the-node (FTTN) construction.

Now, it seems we're back to the future after Conroy this week named named his own crew -- but brought back two of the six members to reprise the roles he unceremoniously snatched from them last year (my count of six excludes chairperson Patricia Scott, secretary of the Department of Broadband, Communications and the Digital Economy, whose very job description made her a shoo-in for the panel).

One of the two is former ACA chairman Tony Shaw, who has more than 30 years' experience in Australian telecommunications and was one of the architects of the current deregulated regime. Nobody is going to question his credentials, which is why he was also chosen for the Coalition government's panel last year.

Also making a comeback is treasury secretary Dr Ken Henry AC, who is there as a sort of Vesper Lynd to Conroy's James Bond; he's the one with the briefcase handcuffed to his hand (metaphorically, at least) to make sure the public monies are being well spent.

There's lots you can do with AU$4.7 billion but Henry's role is much more important than Ms Lynd's: AU$10 million, the amount she was managing, is barely an interest payment on the amount we're talking about here.

The panel's sole industry representative is Tony Mitchell, chairman of Allphones, a nationwide reseller of -- wait for it -- mobile phones.

Could someone please remind me what mobile phones have to do with this tender? Allphones' greatest exposure to broadband issues comes from signing up customers to wireless broadband services from Big Pond, Optus, Vodafone, Virgin, and 3.

Allphones also resells DSL services from Big Pond and Optus, as well as Dodo Internet -- arguably Australia's worst ISP, whose biggest claim to fame (apart from its silly and gratuitous TV ads) is generating nearly twice as many complaints to the Telecommunications Industry Ombudsman as Telstra BigPond despite having a fraction as many customers. If that's considered acceptable broadband to Mitchell, we should all be worried.

Of course, procedural fairness is critical, which is where business advisor John Wylie, CEO of Lazard Carnegie Wylie, comes in. LCW is big in consulting related to large tenders, and owns a majority of credit and collections agency D&B. Wylie not only knows how to appraise tenders, he knows how to find out whether tenderers will make good on their promises.

Speaking of not-paying-up, Conroy has recruited Reg Coutts, Professor Emeritus of communications with the University of Adelaide. Coutts is no stranger to Australia's broadband policy, having issued a scathing evaluation of OPEL's WiMax plans on behalf of the ACCC last year.

Coutts, who coincidentally is a 17-year Telstra veteran, seems like the perfect panel member to fulfil Conroy's secret dream of axing the OPEL contract altogether: put Coutts and Henry in a room together and throw the word "OPEL" into the air, and you're almost guaranteed to get a consensus that the bid is a huge waste of taxpayer money.

Or is it? There's no telling whether Conroy has visited the Web page of Coutts' company -- Coutts Communications -- which paints a completely different picture. WiMax is, Coutts writes, "a serious wireless access option for many new players who recognise that [sic] the potential of the evolving WiMax technologies to open up niche markets against older incumbents."

As he told ZDNet.com.au last year, Coutts is also a firm believer in the value of public-private partnerships -- which could be good news for tenderers whose names don't start with T-e-l-s-t-r-a, since that company has repeatedly stated its opposition to sharing equity with anybody.

Then there's Laureate Professor Rod Tucker of the University of Melbourne. This guy has such a long list of credentials that, if the bid was left to him, I reckon Australia's next network would be based on quantum computers and all-optical switching, and perhaps include the introduction of flying cars as well.

He's likely to go over the heads of the other panel members but should certainly be able to inject some reality into assessments of the network tenders -- including the inevitable side discussions about WiMAX.

Could this be Conroy's dream team? He has assembled a transparent, technically skilled team of experts, including one who's on the record slamming OPEL's plans and another (Mitchell) who has a vested interest in maintaining relationships with several wireless broadband players, none of whom are OPEL.

He has seated government bean-counters who are likely to evaluate fibre network proposals with careful eyes; the first months of the Rudd government, after all, have been all about belt-tightening -- and if Rudd is happy to renege on election promises and put the squeeze on our senior citizens, why should we expect anything less when it comes to OPEL?

What is the panel missing? Well, there aren't any career executives like Len Bleasel and Dick Warburton, who have business sense but presumably know bugger-all about telecommunications. And, interestingly, there is no explicit reference to competition policy, which was core to Coonan's panel as illustrated by her inclusion of ACCC executive Joe Dimansi and Australian Competition Tribunal member Rod Shogren.

Either Conroy isn't concerned about ensuring tenders meet the requirements of laws ensuring telecommunications competition, or he's sending Telstra a message. I reckon that message would go something like this: we've sidelined your arch-enemies at the ACCC. You're the only ones with the capital and manpower to deliver what we need. Come to the table, consider a partnership that we can get the committee to approve, and we'll see if we can't get OPEL blown out of the water at the same time.

The panel now has until September to invite and evaluate tenders for Conroy's fibre-optic dream. Coonan's panel was focused on tenders' probity and adherence to legislation, while Conroy's seem focused on delivering viable commercial outcomes.

Can the two be reconciled to produce the best result for all Australians?

Will this panel produce a fairer outcome when the results are announced in September? Do you really expect to see the FTTN rollout start by 31 December? Who do you think should have been on the panel?

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