analysis If you believe what you read over the past week, you’d think that construction delays on the part of contractor Syntheo have significantly derailed the progress of the National Broadband Network. However, as is often the case with the NBN, the truth couldn’t be more different. The fact is that network remains squarely on track to meet its June 2013 rollouts targets.
If you follow news in Australia’s telecommunications industry at all, it would have been hard to miss the flurry of hyped-up headlines which flooded Australia’s mediasphere over the past week concerning what appeared to be a dramatic disclosure of significant rollout problems with the National Broadband Network.
“NBN contractor on track to miss targets”, screamed the Australian newspaper (surprise). The Financial Review went further, headlining its article on the subject “NBN Co hits ‘significant’ delays”, and followed it up with an article complaining that NBN Co wouldn’t detail the problems in its construction rollout. iTNews claimed that NBN Co had ‘fingered’ Syntheo for what it described as a “premises-passed shortfall”, while iTWire wrote that the company was in a “struggle against time” to change its construction schedule, and Computerworld complained that NBN Co had “downgraded” its construction targets. And, of course Shadow Communications Minister Malcolm Turnbull added his two bobs’ worth as usual, complaining that NBN Co had not connected any services in WA, SA and NT after 19 months of construction work.
The media coverage of this supposed issue over the past week has been universally slanted in the same direction. If you believe the prevailing sentiment in Australia’s media on this issue, you would come away with the overwhelming impression that the NBN rollout is broadly failing; a flawed and delayed rollout by incompetent contractors fleecing NBN Co for billions, managed by a company of overpaid, bungling fools; incapable of meeting even their own low targets and blithely ignoring the entire unfolding disaster while enthusiastically guzzling premium blend coffee from designer mugs.
It’s a compelling picture: And it’s the sort of thing the media loves. ‘Good news doesn’t sell newspapers’, as the old adage goes; far better to fill the pages of the newspapers, news sites and blogs with doom and tragedy. That’ll bring in the clicks for sure. However, as with much of the reporting of the National Broadband Network over the past half-decade, in this case the media got this one overwhelmingly wrong.
To understand why, it’s necessary to go back and re-examine what NBN Co’s targets actually are; and show from first principles why the company isn’t actually behind on its rollout and why the perceived delays in Syntheo’s rollout of the NBN’s fibre in certain states isn’t statistically significant.
The definitive source for data on NBN Co’s rollout targets is, as many of you will know, its latest corporate plan published in August 2012 (PDF). That plan clearly states — on probably its most-read page — that NBN Co’s target number of brownfields fibre premises which it aims to have passed by the end of June 2013 is 286,000.
This is the prime benchmark which NBN Co will be measured against at the end of June. At this stage, just months before the upcoming Federal Election in September, NBN Co’s performance against this key figure will be one of the key debating points which will be taken up by both the Government and the Coalition to argue about whether the NBN rollout is meeting its targets. This is the figure on which NBN Co’s performance will primarily be judged this year.
So, how is NBN Co tracking against this figure at the moment?
Thanks to data released by NBN Co at the end of January, combined with monthly projection charts NBN released last year we can make a judgement on this issue. In January NBN Co revealed that at the end of January, its brownfields fibre network — the one which will eventually cover most of Australia — had passed close to 50,000 premises.
If you examine that figure, comparing it to the month by month rollout chart which NBN Co released in 2012, you’ll find that it matches up almost precisely. In other words, NBN Co has always been expecting to have just under 50,000 brownfields fibre premises passed by the end of January; and it met that target.
Over the next few months, it expects to hit targets of just over 50,000 (at the end of February), about 75,000 (at the end of March) and 110,000 (at the end of April). Then the figure is expected to jump dramatically to around 200,000 at the end of May and then to about 286,000 at the end of June.
So what’s all the fuss about?
The extreme media hype generated last week is based on the fact that in October, NBN Co released a secondary rollout statistic. This wasn’t a hard target, but it was a forecast of how many premises the company expected to have passed on a monthly basis over the succeeding nine months or so, based on actual construction activity by its contractor targets.
This figure raised the projected June 2013 target by just 14,000 — representing a raise of less than five percent.
In a Senate Estimates hearing last week, NBN Co chief executive Mike Quigley revealed that due to a few problems with one contractor — Syntheo — in a few states — WA, SA and the NT — the company would be unlikely to meet those revised June 2013 construction forecasts. NBN Co is still, confidently predicting, however, that it will meet the 286,000 figure which has always represented its hard targets for that period. And in fact it is likely still a little ahead of its monthly target projection.
Do you see what happened here? NBN Co issued an informal forecast projection less than five percent higher than its original June 2013 target. Then, a few months later, it revised that target back down as construction realities hit. Let’s see precisely what Mike Quigley said about this in the Senate Estimates hearing which caused so much media activity last week. Quigley said:
“The first chart that you will see there is on our fibre to the premises brownfields performance. You will see that the lower set of five bar graphs is what we presented to the JCNBN in October. You can see that we have labelled those as the baseline. Our intention is to keep a running comparison compared to that baseline, so what we have done this time round is to present another set of charts, the upper set, which is the actuals to the end of January and the forecast to June. As you can see, we are tracking reasonably well against the projections we made in October, although, as you would expect in a project like this, there are some ups and downs as we progress through the roll-up ramp.”
“As you know, we have four construction partners working towards the June 2013 target of 286,000 premises passed in brownfields. The chart shows that, collectively, our construction partners achieved the numbers we projected by end of January. You will also notice, if you look carefully there, that we have slightly lowered the number of premises forecast to be passed by the end of June 2013. In October we were forecasting just under 300,000 premises passed; we are now forecasting almost exactly the target of 286,000. The reason for the change is that one of our construction partners has significantly reduced its forecast since we presented back in the October time frame.”
“We are working closely with Syntheo to try and recover their original forecast.”
This series of statements from Quigley covers it all. Syntheo’s experiencing some problems, which has meant NBN Co has slightly (by less than five percent!) revised down its construction forecast for June 2013, based on actual construction activity. However, not only may NBN Co still make up the 300,000 number (either with Syntheo or other contractors which are performing better), but it’s still 100 percent on track to meet its hard benchmark figure of 286,000 brownfields fibre premises passed by the end of June 2013.
What we have here is a situation precisely the way Quigley characterised it: “Some ups and downs” as the company progresses its rollout. In short, this is extremely normal activity which would be likely to be seen within any major infrastructure construction effort; a five percent deviance from any projected forecast is just completely usual within projects of this scale; in fact, most project management types would take it into account right from the start.
If anything, Quigley and the rest of the management team at NBN Co should be commended for how closely they are keeping this gargantuan technology project on track. The rollout the NBN currently shows no signs of blowing out on anywhere near the same scale and time-frame that other major government technology projects, such as Queensland Health’s payroll systems disaster or the Myki or T-card projects in Victoria and NSW have, for example. It currently appears well-managed and well-within acceptable budgetary and timeframe parameters.
In my opinion, the real story to have emerged from the Senate Estimates NBN hearings last week was the disgraceful behaviour of Coalition senators during the process.
If you read the transcript of the hearings (I encourage you to; it’s available online here in PDF format; the NBN Co part starts from the bottom of page 99), it will quickly become apparent that several of the Coalition Senators involved had no intent of displaying even a modicum of respect for Quigley and Communications Minister Stephen Conroy during the process.
What are we to make, for instance, of Senator Bill Heffernan’s statement that if Conroy turned off his laptop, which he had with him to aid in the Senate Estimates process, his “brain would go dead”? Or his following statement that Conroy was “full of shit” — a statement he made repeatedly? Or Senator Ian McDonald’s statement that NBN Co was “full of Labor Party apparatchiks right from the top”? Or Heffernan’s later statement that Quigley was “brain-dead”?
These selective quotes don’t do justice the farcical situation which emerged in that particular Senate Estimates hearing. There is no doubt that Conroy filed some of his own barbs with the Coalition, but that in general the session as a whole was characterised by constant interjections and badgering by the Coalition Senators on the Senate committee examining the NBN; interjections which often ignored the information which Quigley appeared to be honestly attempting to provide about the rollout.
One measure of the farcical nature of the ongoing Senate Estimates hearings with respect to the NBN is the fact that during calendar year 2012, NBN Co was asked some 444 questions on notice by Senators and members of the Joint Parliamentary Committee into the NBN — including 192 alone from Liberal Senator Simon Birmingham. Upon examining the questions, it’s possible to ascertain — as Senator Conroy pointed out during last week’s session — that a large amount of them could be answered by the questioners themselves by simply viewing the appropriate section of NBN Co’s comprehensive website.
Yet it was the supposed delays in NBN Co’s rollout schedule which predominantly made headlines last week; not the bad behaviour of the Coalition Senators in the Senate Estimates session; nor the waste of resources which is currently under way at NBN Co as the company attempts to file responses to the hundreds of questions it is being hit with about its operations.
If you follow telecommunications news in Australia, or even just national affairs with respect to the NBN, it must be getting hard for many people at this stage not to become overwhelmingly cynical about what they read. What does it matter, many people must ask themselves, how well NBN Co is managing its network rollout, if the company is criticised no matter what it does — even if it is squarely meeting its goals? What does the whole political debate matter, many people must ask themselves, when the Opposition can derail a whole Senate Estimates session to the extent that it descends into a farce and disrespects hard-working and loyal executives such as NBN Co chief Mike Quigley? After years of this, I’m sure many people are now getting jack of the whole situation.
However, at this point I think it’s important to remember that regardless of what is being reported or what anyone is saying, the work NBN Co is doing (and, by all indications, doing well) is objectively important and extremely valuable to society. There’s a huge amount of flak being thrown around about the project right now. Let’s not lose sight of its worthy aims; a massive increase in basic broadband service delivery to all Australians. Those of us who’ve been around the block a few times will know that it’s usually not what’s being said that matters in most situations, but what’s being done. And there is a great deal of evidence right now that NBN Co is doing plenty. It’s a pity the same can’t be said for its detractors.
Image credit (graphs): NBN Co