opinion/analysis The level of hysteria over the past 24 hours over Malcolm Turnbull’s entirely predictable decision to refresh NBN Co’s board has been laughably absurd, and starkly demonstrates the lack of understanding the media has about the National Broadband Network in general. Take a chill pill, people: The Coalition is not “trashing” the NBN or “setting it up to fail”. The sky is not falling.
Since every article that I publish that’s even mildly favourable about the Coalition or its freshly minted Communications Minister tends to see me labelled as a Turnbull shill taking regular fat sacks of cash from the Coalition’s coffers, let me firstly, at the outset of this article, reiterate (once again) my long-term, sustained support for a universal fibre National Broadband Network. As I wrote in April this year, regarding the Coalition’s half-baked, half-copper, half-assed alternative:
“Fundamentally, it’s a worse policy than Labor’s. Its critics are right; it betrays a tragic loss of long-term vision for Australia’s telecommunications infrastructure. Fibre to the node is a dead-end technology which will, in several decades, be already fading into memory. By investing in fibre to the node, the Coalition isn’t skating to where the puck is going to be, nor even where it is now. It is looking backwards, not forwards, and by doing so it is throwing away the opportunity for Australia’s economy to transition from digging things up out of the ground to a more sustainable knowledge-based export economy — you know, the kind of economy which countries such as Germany and Japan already have.”
There are so many arguments against what the Coalition wants to do with the NBN that it’s not even funny. There are the financial arguments. There are the productivity arguments. There are the industry reform arguments. There are the Telstra arguments. There are the social utility arguments. And, of course, as the Financial Review so accurately reminded us this morning (who would have thought it, the AFR criticising the Coalition over NBN policy?), underlying all of these are the technical arguments. Although the Coalition’s preferred FTTN technology has worked well overseas, nobody’s really sure just yet how well it will work in Australia. I guess we’ll find out.
That little disclaimer out of the way, let’s get to the actual business at hand.
Anyone with any interest in the NBN project or NBN Co itself would have felt their eyes inevitably drawn, yesterday morning, to the riveting revelations locked in the pages of the Sydney Morning Herald that the entirety of NBN Co’s board had tendered their resignations.
Now, the SMH’s article was pretty plain fare. Although it was excitedly labelled “EXCLUSIVE”, and its authors, seasoned journalists Adele Ferguson and Eric Johnston, took a somewhat breathless and metaphor-prone approach to their breaking news (painting NBN Co’s board as ‘falling on their sword’ and likely replacement chairman Ziggy Switkowski as ‘waiting in the wings’ to stop the ‘massive cost blow-outs’), at a gross level it gave us the news: NBN Co’s board was out.
What happened next, however, was extraordinary, as commentator after commentator, politician after politician, weighed in to give their own views on the supposed managerial bloodbath.
Perhaps the most hysterical article was penned by Crikey writer Stilgherrian, who made the extraordinary claim that NBN Co’s board was quitting because the new Coalition Government was setting NBN Co up to fail, “either as a byproduct (intended or not) of introducing wholesale competition, or to provide a clean and obvious historical example that “proves” Labor can’t manage infrastructure projects, or both”. In Stilgherrian’s view, the Coalition’s version of the NBN is doomed no matter what (either through incompetence or artifice), and so NBN Co’s board members are the equivalent of rats jumping off a sinking ship.
Normally level-headed Business Spectator commentator Alan Kohler backed Stilgherrian’s claim to the hilt, writing that not only did it make sense for NBN Co’s board to desert the NBN cause, but that even supposed incoming NBN Co executive chairman Ziggy Switkowski shouldn’t go near what he described as the Coalition’s “donkey, a money sinkhole, a political noose, and an end-of-career nightmare”.
If you dipped your head into the blogosphere on the topic overnight, you’d find many of the same sentiments being expressed, only in more impolite terms.
Long-term NBN critic Kieran Cummings, for example, accused Turnbull of taking “revenge” on NBN Co’s board, claimed the new Communications Minister was setting up NBN Co to fail so it could be sold to Telstra “for below cost price”, and even went to far as to allege that the departure of NBN Co’s board could create a “failure cascade” inside NBN Co that would lead to a critical mass of departures from the company. “Game over,” Cummings added.
And all of this was before the politicians got involved.
‘Acting’ Shadow Communications Minister Anthony Albanese — stripped of his staff, his power to command NBN Co and perhaps even his ceremonial gown — nevertheless proved he had lost none of the anti-Turnbull vitriol he had worked himself up to during the election campaign, accusing the Viscount of Vaucluse of kicking off the process of dismantling Labor’s pride and joy. “And so the trashing of the National Broadband Network has begun”, Albanese ponderously pronounced.
Would-be Opposition Leader Bill Shorten went further, alleging the Coalition would use the various upcoming reviews of the NBN project to “go after the NBN”, in a turn of phrase which raised uncomfortable images of Turnbull chasing outgoing NBN Co CEO Mike Quigley around a village green with a hockey stick, trying to clip him around the ankles. Presumably Shorten meant that Turnbull would use the upcoming reviews as justification for turning off the lights for good.
Now, I won’t say that all of this wasn’t entertaining to read. Labor might be trying to reform its image in the wake of its election failure, but it’s nice to know that Australia’s oldest political party hasn’t lost its capacity for bile. Judging by the performance of Tony Abbott and his understudies, Labor will need all the bile it can get to maintain the verbal standard the previous Opposition has set for it. Then too, I do personally enjoy conspiracy theories. I’ve spent a great deal of time online reading articles which purport to contain evidence that the US Government destroyed its own twin towers on 9/11 and that Bin Laden was merely a fall guy. The claims that the Coalition is deliberately setting out to destroy the NBN so it can use it as a case study of Labor’s failure are just as entertaining.
The only problem with all of this, hilarity aside, is that it’s making a mountain out of a molehill. It was entirely possible to predict way ahead of time that Turnbull would turf NBN Co’s board as one of his first actions as Communications Minister, given the past history of antagonism the Duke of Double Bay has had with the board.
In fact, I did predict it. In an article published last month for Delimiter 2.0 on Turnbull’s first 100 days as Minister (paywalled), I wrote:
“The first thing which Turnbull will need to do upon taking power as Federal Communications Minister is obvious: He needs to find new management for the National Broadband Network Company.
Irrespective of where the blame lies for the situation, the poisoned and potentially litigous relationship which has developed between the Earl of Wentworth and NBN Co’s current board will make it impossible for Turnbull to work effectively with it in future as Minister. There is just too much suspicion and distrust, too much blood in the water, for NBN Co’s current board to co-exist with its new primary shareholder minister. Upon taking office, Turnbull must immediately ask for the resignation of NBN Co chair Siobhan McKenna, as other 2009-era board members such as Diane Smith-Gander and Terry Francis. Other board members, particularly former Leighton executive Rick Turchini, may be asked to remain, to ensure stability during the transition.
If I were Turnbull, I wouldn’t bother with the kind of ‘executive search process’ which Labor has previously undertaken to find new board members. Those kind of things normally take six months, and Turnbull has enough connections of his own. If I were the MP, I would already have a shortlist of executives primarily drawn from telecommunications and construction industry background, to fill the vacant chairs. A former senior executive from Telstra or Optus would do well as chair.”
By all reports, this is precisely what Turnbull did. The day after he was appointed Minister, he asked for the resignation of NBN Co’s entire board. It looks like one or two board members will remain, but in the meantime a hand-picked executive (Ziggy Switkowski) will help guide NBN Co through a transition period, while new board members and a new executive team are found. Ziggy’s a terrible candidate for chair, by the way (paywalled), but that’s largely beside the point.
All of this, as seasoned business commentators like Kohler will know, is entirely normal. When a company of any kind changes owners, there are always board changes. It’s also normal for new Governments to turf any bureaucrats, diplomats, and, in the case of NBN Co, technocrats, which they feel are too partisan to the previous administration.
It doesn’t mean the end of the world. It doesn’t mean the destruction of the NBN. It doesn’t mean Turnbull’s the ultimate evil.
Instead, and despite how counter-intuitive this will sound to those still howling for Tony Abbott’s cadre of wreckers to be marched back into the sea, Turnbull is being entirely predictable and even sensible, by modern and corporate standards, in his move with NBN Co’s board.
Other aspects of Turnbull’s plan to reform NBN Co along a FTTN model are also proceeding apace. Telstra has confirmed suspicions of being *shock* willing to work with a Coalition Government on a FTTN model for the NBN by preemptively deploying a FTTN trial in a secret location to demonstrate an early real-world test of the technology. Negotiations between Telstra and NBN Co over key changes to their $11 billion contract are also moving towards fruition, with both sides having reportedly appointed advisors to assist with the process.
And even the idea that Telstra might construct large portions of the NBN — an idea which was so radical before the election (paywalled) — has moved into the mainstream conversation about the NBN.
They say that the media hates a vacuum: That in the absence of any real, hard news of substantive change, that journalists and editors will start speculating, inventing, drumming up, dreaming up, extrapolating the little tidbits of information that they do have into inflated stories that don’t do the actual situation on the ground justice. The media has to have something to talk about, so when it doesn’t, it blows up small stories into big ones: Precisely what is happening with Turnbull’s changes to the NBN. And, of course, there will also be articles by journalists attempting to relieve the boredom by puncturing that hype. You’re reading an example of the genre right now.
As I wrote at the outset of this article, I vastly prefer Labor’s version of the NBN, and most Australians feel the same way. On every front, it’s a better policy, and it’s the one I backed and would have liked to see enacted. I still think it will be enacted, in the long-term. Fibre to every premise in Australia is kind of inevitable at this point, on a time scale of several decades.
But let’s not demonise Australia’s new Communications Minister for doing precisely what he said he would do, upon taking office. In his first few days, Malcolm Turnbull has been eminently predictable and, dare I say, it, sensible. Refreshing NBN Co’s board, kicking off talks with Telstra, blessing fibre to the node trials, and so on: These are all things we knew would happen. The fact that they are happening is, viewed in a certain light, reassuring. At least the Earl of Wentworth isn’t going off into left field right from the get-go.
You may disagree with Turnbull’s FTTN-based NBN policy. God knows I do — it’s a godawful, mess of a bastard child of Labor’s pure NBN vision, mixed with poisoned politics. But one other thing we may say for certain. There would only be one thing worse than the Coalition competently delivering a FTTN-based NBN policy instead of Labor’s FTTP-based model. That would be an incompetent Coalition not delivering anything at all.