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Et tu, Internode?

Is Hackett the Saruman — the once-good wizard who is seduced by the dark powers of Sauron — of my recent Lord of the Rings scenario? Is something rotten in Renmark — and elsewhere?
Written by David Braue, Contributor

If you're a firm believer in coincidence, you might not have made much of the fact that the departure of Telstra COO Greg Winn came during the same week that the NBN expert panel passed in its report to Senator Stephen Conroy.

You certainly would not have questioned the timing of Telstra's late-2008 rural charm offensive, which saw a burst of pre-NBN munificence including but not limited to pay phones for Aboriginal communities, storm relief for Brisbane customers, a tally of its "community spend", its $5.5m investment in southern Queensland, a traditional ceremony to bless its $34 million Arnhem Land trunk, and a technology makeover for rural aged homes.

And that was just over the course of three weeks. But not even the most die-hard optimist can argue that coincidence had any part to play in the curious timing of Internode's announcement, on 26 November. That was the same day that it and its buddies in Terria — the one-time potential telco that is now just another anti-Telstra lobbying group — decided not to submit the bid, letting Optus go it alone while they wave flags from the sidelines.


Simon Hackett
(Credit: Internode)

The quick philosophical turnaround of Internode was followed in close succession by its sudden launch of ADSL2+ services in 46 Tasmanian exchanges and around 1,400 other Telstra exchange areas nationwide.

Can it be a coincidence that the most visible spokespeople of both Internode and iiNet came out slamming the NBN in public, after months in which they had openly supported it and Terria's effort?

In a recent column, one reader, whose parents apparently chose the interesting Christian name "Anonymous" (after some obscure saint perhaps?) used a colourful metaphor to describe my relationship with Simon Hackett, erstwhile CEO and now managing director of Internode.

Yet while Simon and I have talked telco stuff on many occasions before, since the NBN tender was lodged, he has gone to ground. Calls and emails during December were intercepted by his PA, who informed me he was in back-to-back meetings, apparently, every minute of the day and night. No problem: I emailed him a list of questions exploring this issue in mid-December, but am still waiting for even a brief response to one of them.

Through several follow-ups, I have realised that Hackett has apparently been on holidays for what is now approaching six weeks — and still has not found 10 minutes to respond to my emails. Which is surprising, or maybe not, given that some of the last public comments Hackett made were those in which he blasted the whole NBN process.

Is Hackett the Saruman — the once-good wizard who is seduced by the dark powers of Sauron — of my recent Lord of the Rings scenario? Is something rotten in Renmark — and elsewhere?

Call me sceptical, but the timing of all this suggests that Internode's souring on Terria may have come about as a direct result of interference from Telstra. Or, more to the point, that Telstra withheld negotiations on ADSL2+ wholesale until it extracted a pledge that Internode would help poison the well and break up Terria's already-flagging momentum.

Is something rotten in Renmark — and elsewhere?

It's not as significant a step as I contemplated last year, when I wondered whether Telstra might buy a Terria member to disrupt the allegiance. However, it is nonetheless a significant one because it confirms that many Terria members saw the alliance not as an opportunity for real change — but simply as a bargaining tool to further their own position against Telstra.

OK, so that's life in a competitive business world, hurrah, hurrah, clap, clap. But by having one of the country's largest ISPs roll over to Telstra, Internode is not only perpetuating the carrier's stranglehold over ADSL2+ services; it's also tacitly admitting that carriers simply cannot keep up with Telstra in building their own ADSL2+ footprints.

In other words, the implication is that vigorous DSLAM competition is nothing more than a lofty but unrealistic ideal. Internode, after all, had just over 110 exchanges running its own DSLAMs and could never have hoped to compete with Telstra by investing — especially not in this economic climate.

And where does that leave the NBN? In limbo, for now, at least until the minister's pleasure leads to release whatever hybrid strategy he dreams up to get this country broadbanded once and for all. In the meantime, I invite your thoughts on Internode's seeming duplicity and the potential effects of Terria's neutering as we head into this year. And I'll let you know if Hackett ever gets back to me.

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