news Shadow Communications Minister Malcolm Turnbull this week claimed the National Broadband Network Company had in January fudged its network rollout statistics by retroactively updating its December fibre rollout database to show additional premises; a claim NBN Co has denied.
On Monday this week, after a month of requests from a number of different organisations, NBN Co released hard statistics showing the progress of the rollout and uptake of its network infrastructure during the three months to the end of 2012. The company’s quarterly numbers are being extremely closely watched by Australia’s technology sector and political elite, as they are a key measure by which the Coalition will criticise the Federal Government’s implementation of its ambitious NBN policy, ahead of the upcoming Federal Election this year.
In general, although they show only slow progress for the three months to the end of December last year, the numbers are believed to be within the guidelines of the company’s overall plan, which calls for the company to have connected some 341,000 premises to its fibre broadband network by the end of June this year, with some 54,000 live customers. However, according to Turnbull, in January NBN Co changed its definition used to show how many premises it has passed with its fibre network, in order to make its progress on its network rollout look better than it actually was.
To understand where Turnbull is coming with this claim, you need to understand the way NBN Co reports its statistics.
Most of the attention on the company’s network rollout occurs on a quarterly basis, when NBN Co releases key measures – premises passed and active services – for the three months preceding. It is this dataset which the company released this week. However, those following the company’s progress more closely have taken to keeping tabs on another document, released monthly. This database, known as the ‘Monthly ready for service rollout plan’ (available from this page), does not explicitly provide details on how many premises the company has actually connected with its fibre network, but does go into extreme detail – area by area around Australia – about how the NBN is being deployed and when NBN Co expects each region to be connected. It predicts the near future; and can be used to show the near past, by checking which areas are removed from its charts. It’s a painstaking process, but it’s there.
The database focuses around what is known as ‘Fibre Serving Area Modules’ (FSAMs). If telephone exchanges are the key central network link points of Telstra’s existing copper network, FSAMs are some of the key link points of the NBN’s fibre. If you know which FSAM your premise is going to be connected to, you can use NBN Co’s monthly ready for service rollout plan to determine precisely when the company expects to connect you to its network.
However, after NBN Co released its quarterly numbers on Monday, Turnbull pointed out that the way the company reports this monthly ready for service database had changed. In mid-December, the database was released as normal. However, in mid-January, NBN Co retroactively issued a new version of that December database containing a new category, which it described as ‘Early Access Brownfields’ – meaning areas where some residents connected to a specific FSAM were expected to shortly be connected to the NBN. You can download the original December database (which NBN Co has since removed from its site) here in Excel form, and the revised version here.
According to Turnbull, NBN Co is using this ‘partial FSAM’ model to change the way it accounts for completing construction to premises in its network.
“At least 4,000 of the brownfields premises passed have been counted as ‘early release Fibre Serving Area Modules’ (FSAMs) – meaning that the NBN is no longer waiting until entire FSAMs are ready to switch on to the network before counting them as having been ‘passed’,” Turnbull said in a media release issued on Monday, effectively alleging that NBN Co’s figure of having passed an additional 20,386 fibre premises in the December quarter may actually be closer to 16,000.
“This is despite the NBN stating in its corporate plan that the ‘premises have been passed’ once “all design, construction, commissioning and quality assurance activities in an FSAM have been completed for the Local network and Distribution network, (Corporate Plan (PDF), p.94)” Turnbull added.
Turnbull is correct in that NBN Co’s corporate plan does indeed state that the definition of ‘premises passed’ on its network entails all design, construction, commissioning and quality assurance activities in an FSAM having been completed; the corporate plan does not make allowance for ‘partial FSAM’ statistics, or, as NBN Co has defined them, ‘Early Access Brownfields’.
“This revision to the definitions (in order to make it easier for NBN to meet its targets) is in addition to having changed the way it counts houses passed in greenfields areas – it now counts ‘lots passed’ regardless of whether there are any premises constructed ready to take a service on the lot or not,” Turnbull added.
According to NBN Co, it’s done nothing wrong in adding the extra ‘partial FSAM’ data into its monthly ready for service database. Additionally, the company has not disclosed precisely how it collates its quarterly data release, so it is unclear if such information is used in the release of the quarterly statistics as Turnbull has suggested.
“The priority of NBN Co is to provide as many Australians access to superfast, reliable and affordable broadband as quickly as possible,” a spokesperson for NBN Co said in a statement yesterday responding to Turnbull’s claim. “Where we can switch on these smaller areas we will do so because we want people to enjoy the benefits of better broadband as soon as possible. Clearly we only do this in areas where there is sufficient transit and the wider distribution network has been rolled out – so premises owners can actually order a service.”
“It’s simply incorrect to state that NBN Co has changed the definition of “Premises Passed” by allowing the inclusion of parts of suburbs as well as full suburbs (known as “Partial Fibre Service Area Modules” and “Fibre Service Access Modules” in company jargon). The release of partial FSAMs in initial rollout areas was provided for in the agreement with Telstra – a document which was finalised nearly 12 months ago.” NBN Co has declined to release its agreement with Telstra in the past, and Freedom of Information requests for the document have been denied.
Upon further questioning as to why the company retroactively updated its December database, NBN Co’s spokesperson issued the following statement: “NBN Co included “Early Access Brownfields” figures in its January Ready for Service report issued last Thursday. However “Early Access Brownfields” were first included in a December update after advising RSPs at the end of November the additional information was coming.”
“We are providing this data so that [retail service providers] have an updated estimate of when services can be ordered in an area so they can plan their own marketing and sales activities.”
There’s a lot to debate about the NBN right now, and it all revolves around to what extent the company is delivering on its promises. While there are still those who are obsessed with the fibre to the node/fibre to the home debate, what we really should be debating right now as a nation and as a telecommunications industry is not what technology we should be using for the NBN, but whether the Labor Federal Government and the organisation it has created in NBN Co are actually being successful at implementing the NBN policy.
After all, despite the fact that we all know there’s a huge amount of NBN construction activity going on around Australia right now (some 750,000-odd premises under construction, if you believe NBN Co, which I broadly do), the top-line figures do not look good when taken out of their context. Since late 2007, when the then-Rudd Labor administration took power and kicked off its initial NBN policy (which subsequently failed and became the current, much broader policy in April 2009), the Government has only successfully deployed fixed broadband infrastructure to some 72,400 premises. It’s only connected some 10,400 premises for active use.
This is why I’ve focused so highly on Turnbull’s claims here. NBN Co top-line hard rollout figures are not fantastic. I think we can all agree on that much. They may be within the company’s guidelines for its plan, but they’re still not great. But at least up until now we have been able to believe that the figures, and NBN Co itself, was honest and that it was applying a consistent methodology in how it delivers those figures.
The facts are that NBN Co, since December, delayed substantially compared with the previous year in releasing its hard rollout figures, taking a month to release its key quarterly measures (the year previously it took a matter of days). During that period, it made its construction chief redundant and retroactively updated its December ready for service database to show additional premises in a manner that it had not done previously. It also kicked off a paid incentive scheme for retail ISPs to sign up new customers to the NBN.
Did NBN Co in January, take the additional step of fudging its definitions of ‘premises passed’ to show its progress in a slightly more favourable light? Right now, I don’t know. There just isn’t enough evidence to say.
Personally, I don’t believe so, because I know many of the folks at NBN Co and I have consistently seen them act ethically over the past several years. I genuinely believe the company has Australia’s best interests at heart and will attempt to act transparently and ethically in every situation, while pushing hard for its goal of ‘broadbanding Australia’. This is the culture which its chief executive Mike Quigley has instilled in it.
However, we’ve also seen some rather disturbing signs coming from the company over the past few months, including a lack of transparency and internal restructuring. I don’t think there’s a conspiracy here, but coupled with the evidence Turnbull has presented regarding its treatment of partial FSAMs, there are some questions swirling around NBN Co right now that are a little troubling.
Another motivation for writing this article is that I didn’t want Turnbull’s claims of number-fudging to go untested. It’s a serious allegation, and we need to dig deep whenever a politician alleges this kind of behaviour. Right now, I can’t say whether Turnbull’s right or wrong: But what I can say is that he was right to at least ask the question about this, and it’s to the credit of Turnbull’s team that it’s watching NBN Co’s data so closely.
What do you think? You’ve all now got the same evidence that I have: The actual documents, verbatim statements from both sides and so on. Make your opinions known. And before you comment, know that I remain in favour of the NBN policy as a whole and am not a stooge of the Liberal Party, which currently has an inferior NBN policy. However, like some others, I am beginning to question NBN Co’s performance in implementing the NBN policy. That should be the context for this discussion.