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Featured, News, Telecommunications - Written by Renai LeMay on Tuesday, November 12, 2013 11:49 - 186 Comments
Turnbull appoints Simon Hackett, others to NBN board
news Communications Minister Malcolm Turnbull today announced that he had appointed three senior executives, including Simon Hackett, Internode founder and doyen of Australia’s broadband industry, to be non-executive directors sitting on the board of the National Broadband Network Company.
In a statement issued this morning, Turnbull said as part of the Government’s continuing National Broadband Network reforms, three directors with extensive relevant industry experience had been appointed to the NBN Co Board.
“The three new non-executive directors are Patrick Flannigan, Simon Hackett, and Justin Milne,” wrote Turnbull. “They further enhance the board’s capabilities and expertise to provide appropriate oversight and guidance to this vitally important national project.”
NBN Co executive chairman Ziggy Switkowski said: “This is a period of transition for the company and it will be a great asset to have a new board that brings decades of combined experience in the industry.”
The trio will join current NBN Co board members Ziggy Switkowski, Alison Lansley and Kerry Schott. Switkowski was appointed by Turnbull in early October as NBN Co’s new executive chairman, temporarily replacing the company’s retiring chief executive Mike Quigley until a replacement can be found. Lansley and Schott are holdovers from the previous NBN Co board under the previous Labor Federal Government. Most of that board was asked to resign by Turnbull shortly after he took office.
The appointment of Hackett to NBN Co’s board follows a minor social media campaign on the issue created by Delimiter, which had argued that the Internode founder’s skills, temperament, experience and ongoing interest in the NBN project made him a perfect candidate for the refreshed NBN board under the Coalition.
Hackett graduated with a Bachelor of Science degree from the University of Adelaide in 1986. He then worked at the university and became a part of the team that created the Australian Academic and Research network (AARNet), the first emergence of the Internet in Australia.
In 1991 he founded Internode, an Internet Service Provider, and then in 1997 he founded its sister company Agile, a licensed telecommunications carrier. Over the next 20 years the company group deployed its own network to deliver ADSL2+, optical fibre, microwave, and fixed wireless Internet services around Australia to residential and business customers. Internode was one of the first companies to connect customers to the NBN in 2010.
The group was sold to iiNet Limited in early 2012, when it had around 180,000 broadband customers nationally. Simon joined the board of iiNet in August 2012. Hackett has been an opinion leader in the national broadband debate for many years. He is a fellow of the Australian Institute of Company Directors and a fellow of the Australian Computer Society. Hackett will resign his position on the board of iiNet at the end of this month to focus on his role with NBN Co, according to Turnbull.
Aside from his qualifications for a role at NBN Co, Hackett has also been one of the most vocal analysts of the NBN over the past several years since the project was founded in April 2009, and has proved uncannily accurate at predicting the future dynamics of the project.
As early as December 2010, Hackett warned that the ACCC’s Points of Interconnect decision with relation to the NBN would cause massive headaches for smaller ISPs and a dramatic consolidation of the industry. The executive turned out to be right. In September 2011, Hackett warned that if the Coalition won the 2013 election and changed NBN Co’s model, there would be a much greater impetus for other ISPs to deploy their own fibre, which is precisely what is happening currently with TPG.
In October 2011 Hackett called for ownership of Telstra’s copper to be transferred to NBN Co as part of its deal with the telco, arguing future Federal Governments may want to use the infrastructure to build hybrid fibre to the node networks. This precise model is being discussed by Telstra and NBN Co right now.
In all of these cases, Hackett argued against conventional wisdom espoused by the previous Labor Government, the competition regulator (the ACCC) or NBN Co itself — and turned out to be accurate in his predictions about the future of the NBN project.
And even though Hackett has formally relinquished ownership of the company he founded and led to national prevalence, Internode, the executive still maintains one of the most prescient voices in the industry. In July this year, Hackett outlined a series of measures by which NBN Co could cut its costs and bring its pricy FTTP rollout more in line with the Coalition’s FTTN-based alternative. NBN Co will be examining precisely this situation in its current strategic review of its operations, to be presented to Turnbull for examination.
Some issues remain around Hackett’s involvement with the NBN. The executive currently holds a substantial tranche of iiNet shares, stemming from iiNet’s acquisition of Internode. This could be seen as a conflict of interest for his position at NBN Co, given that iiNet is a substantial NBN Co customer. However, it could also be argued that Hackett’s position gives him a solid position to represent the interests of retail ISPs on NBN Co’s board.
The other two directors appointed by Turnbull are similarly high-profile.
Milne first rose to prominence in Australia’s technology sector as he joined Microsoft in 1995 as managing director of MSN, the company’s first entry into the internet portal business, which he helped establish and develop in the Australian market. In 1999, Justin joined OzEmail as Head of Data Casting and was later appointed chief executive officer, in a role which saw him work directly with Turnbull, who was an early investor in OzEmail and helped in its public listing.
In 2002, Milne joined Telstra as managing director of Telstra’s BigPond ISP division and was later promoted to the role of group managing director, responsible for Bigpond and Telstra Media. Milne ran Telstra’s Bigpond business as it was transitioning from dial-up to delivering broadband services, increasing its customer base from 200,000 users to 2.5 million. During his time at Bigpond he also delivered and launched the first wireless broadband products in Australia and Milne was also involved in purchasing and operating new media businesses in China for Telstra. He resigned from Telstra in 2010 and is currently a non-executive director of Tabcorp, Members Equity Bank, NetComm Wireless, Basketball Australia and the Leichhardt Rowing Club.
Milne has previously been reported to have been a Turnbull pick for NBN Co’s board. However, the executive’s potential involvement in the NBN has come under strong criticism due to the fact that Milne has had a close personal connection with Turnbull in the past.
The third new director, Patrick Flannigan, will re-join NBN Co after a previous stint at the company. A construction engineer by trade, Flannigan joined Skilled Engineering in July 1990 and was promoted to executive general manager of the company in 1998, which included responsibilities for the Telstra and Optus HFC rollouts. He established his own business, Integrated Maintenance Services in 2000. Flannigan co-founded ASX-listed infrastructure provider Service Stream in 2003, where he was the chief executive from 2003 to 2009.
He joined NBN Co as the company’s head of construction in 2009, where he managed the company’s network construction and relationships with major contractors. However, the executive quit NBN Co in April 2011 under a cloud; just days after negotiations broke down between the fledgling fibre monopoly and some 14 construction firms about the construction of the nation-wide network.
Since leaving NBN Co, Patrick founded Utility Services Group, and is currently chief executive officer and managing director of the company, which employs approximately 2,000 people nationally, servicing linear infrastructure in the electricity, gas, water and telecommunications sectors. Patrick is a director of the Australian Grand Prix Corporation and has a business degree from Victoria University, is a fellow of the Australian Institute of Company Directors and a fellow of the Australian Institute of Management.
I think it’s fairly clear what I think about the appointment of Simon Hackett to NBN Co’s board. After all, I founded a petition to get him appointed, as well as writing an extensive article for Delimiter 2.0 (subscriber content) in late September on the issue. I wrote:
“As with journalists, the role of board directors is not to say comforting things to people in powerful positions. The role of directors is to bring all their skills to the board table and speak all the truth that they know, no matter how uncomfortable, for the benefit of the organisation they represent and its stakeholders. They are wise, disciplined, outspoken counsellors that aim to stop good organisations going off the rails.
It’d be hard to find a better description than this for Simon Hackett, who’s been a wise counsellor to Australia’s telco industry for several decades. And if the Coalition is going to stack NBN Co’s board with past Telstra executives, it’d be nice to see a little energy and variety added to the mix — for example, someone who has spent the past couple of decades wrestling Telstra to get better broadband outcomes for all Australians.
Give Simon Hackett a call, Minister Turnbull. I positively guarantee you won’t be disappointed. The only thing the Coalition might need to be concerned about is that Hackett might eventually end up running the whole show. But then, that outcome has worked out fantastically for Australia in the past.”
I can live with the other appointees. There are doubts about Milne, and Flannigan has already had one stint at NBN Co. Both also have substantial conflicts of interest in sitting on NBN Co’s board (as does Hackett himself, with his iiNet shares) However, the appointment of Hackett to NBN Co’s board is a legendary move which will instantly buy Malcolm Turnbull back a swathe of credibility with both consumers and Australia’s telecommunications industry. I suspect the Minister is very aware of that fact. You only need to look at the reaction to Hackett’s appointment on social media today to see how popular Hackett’s appointment to NBN Co’s board will be.
I’ve published an article on Delimiter 2.0 (subscriber content) on the areas I think Hackett should focus on in his new role at NBN Co. A sample paragraph from behind the paywall:
“Not for nothing (and not just for their similar choice of facial hair and elegant glasses either) has your writer previously compared Hackett to Gordon Freeman, the stubborn protagonist of Valve’s seminal video game Half-Life 2. Hackett has Freeman’s drive, energy, and very likely his engineering skills with a crowbar. For the NBN, Hackett has long been the right man in the wrong place. His appointment this morning perhaps places him where he can be most useful to the project.”
Image credit: Internode
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