Why Simon Hackett should be on the NBN board



blog Simon Hackett’s dropped a little below the radar recently, after selling the pioneering ISP he founded to the iiBorg. Oh, he’s got his side projects — his Tesla electric cars, his own light aircraft, his new technology startup incubator in Adelaide. However, we suspect the Internode founder has a little more time on his hands than he used to. For these, and many other reasons, your writer would humbly submit to Communications Minister Malcolm Turnbull that Hackett would make an ideal appointee to the refreshed board of NBN Co. My full arguments on the subject are (paywalled) at Delimiter 2.0 today. A sample paragraph:

“If Malcolm Turnbull is serious about making sure all Australians quickly get access to affordable, high-speed broadband, there is one man he must consider appointing to the board of NBN Co: The entrepreneur who was instrumental in bringing Australians broadband in the first place. Australia’s own Gordon Freeman; a giant who looms large in the telecommunications annals; an outside-the-box innovator; the thinking man’s NBN board director. Internode founder Simon Hackett.”

You can easily imagine Hackett catching a brief plane flight from Adelaide to Sydney for the regular NBN board meetings, and then driving one of his several Tesla machines from Kingsford-Smith down to NBN Co’s North Sydney headquarters. And Hackett’s appointment would provide a fantastic degree of balance to a board which most people currently expect to be dominated by former executives from giants like Telstra and Optus. I’d love to be a fly on the wall in a board meeting attended by both Hackett and Ziggy Switkowski. Now that would be entertainment. One guess as to which one of the pair would have more of an idea what they were talking about.

Image credit: Internode


  1. I’m Gordon Freeman, it’s been my steam name since the first minute of operation.

  2. I think all NBN Co meetings should be streamed online. Now THAT would be transparency!

    • > Hackett and Ziggy Switkowski

      While I’d love nothing more than to see this, and I would pay money for seeing NBN Co board meetings, there’s a problem.

      iiNet is going to be NBN Co’s second or third biggest customer. There have been contracts between iiNet and Internode relating, for example, to TransACT. Can you say: 『Conflict Of Interest』?

      • Gonna happen regardless, quink. Doesnt really matter who sits on the board, pretty much everyone that has the experience the Raj of Rose Bay expects is going to come from one ISP or another.

        Ziggy has a potential conflict of interest for starters, given his role at both Telstra and Optus. How does that sit given the potential for both those companies to be gifted various concessions and contracts?

        Hackett is a far less significant conflict after that, and if anything, provides a sound counter argument if and when it seems something is being given to Telstra/Optus a little too easily.

        • But Ziggy isn’t an active employee of Optus or Telstra and hasn’t been for near enough a decade.

          Hackett, on the other hand…

          • Point was that anybody with the experience Turnbull wants is going to have history with the industry, and have potential conflicts of interest as a result. I dont think ANY person picked would consider that, but its still something they will be accused of.

            And Hackett is in a position to act as a counterargument to any accusation along those lines. He’s been asking the right questions of Telstra and Optus for as long as I can remember, which means he keeps an eye on Ziggy, and Ziggy does the reverse with him. Whether its been a year or a decade, Ziggy’s history of working at Telstra and Optus will be ammo for his detractors to target him.

            Each of them alone on the board means questions get asked. Both on the exec means most arent.

      • And I suppose that taking instructions from Murdock would not be a conflict of interest?

        • Taking instructions from H. M. Murdock would be just plain awesome!

          Maybe Hannibal, B.A, and the Face could add suggestions, too?

    • @elbento

      I recently went through this presentation with someone. Firstly, this presentation is about an ideal NBN from scratch. Not modifying the current one.

      Secondly, here’s what I wrote: (apologies for the CAPS, it was done in a PM message with no ability to italicise for emphasis)

      There was a main point Hackett made:

      No AVC tiers and very low ($1/Mbps) CVC to allow true utilisation of the network. You can obviously see that was never going to work with the current NBN, because it was designed to make a profit so it could subsidise the expensive connections for the rest of the country….and politically it was needed. It was his “ideal” NBN. He said to use the network, rather than make money off artificial demand. That’s great….if it costs next to nothing to build the network. He suggests we do a number of things to reduce cost:

      – No QoS (Quality of Service)….well, there goes half of NBNCo’s revenue (exaggeration maybe). The idea is that everyone is charged the same for CVC and RSPs decide how to on-charge traffic to businesses, enterprises etc. with priority traffic that is more expensive to provide. About 10-15% of NBNCo’s revenue comes from this in the future. A large chunk. There’s no saving involved in this whatsoever, compared to the revenue you’d lose.

      – No “phone”, only broadband- In principle, there’s nothing wrong with this. In practice….get real. There’s 3 million phone only customers. WTF are they gonna do if you say “You’ve gotta buy a VOIP router”…?? No, this is a government rollout. Some things are shit, but they have to be included. Like phone service backwards compatibility. It’s not exactly expensive- emulation is standard these days. You’re talking a saving of a few tens of millions. Also his idea was to remove the battery backup or make it optional…guess what? NBNCo. have just done this.

      – Simplify the NTD- Single Ethernet port. This one I find laughable. Simon’s argument is it removes “expensive and complex” virtual networks from inside the NTD….I don’t know, but I was under the impression Simon knew a fair bit about networks….Virtual networks are NOT complex. They are bog standard in today’s networks. It costs NBNCo. maybe an extra few tens of millions over the construction period and a few million extra each year to have virtual network control rather than a single end-point termination. Not hundreds of millions or billions. A single port as compared to multiple ports might save an extra $30 of engineering and manufacturing per NTD. That’s $300m saved. NBNCo. saved more than that in efficiency savings between the 2012 CP and the leaked Draft CP for 2013 (see page 6). Hardly a massive saving of 0.75%….

      He says no vendor lock in because the hardware can be supplied by the RSPs….well that’s a recipe for disaster. The NTD allows NBNCo. to provide instant support and know exactly where the problem is along the fibre with diagnosis built into the NTD. With 200 different pieces of possible hardware terminating the connection, that goes out the window and support costs skyrocket when technicians are called out to find a customer has the wrong port plugged in. Any saving from not having a single vendor monopoly (say 10-20% of equipment price of around $1 billion) would be mainly soaked up by extra support requirements in OPEX over the years. There’s perhaps 1% savings available here. Even if the support was built on the GPON standard, removing the NTDs altogether saves MAYBE $1.2 billion. A substantial saving. But at what cost? (see below)

      You ALSO lose the capability of multiple services for one premises. Hackett said “it’s too expensive with the way NBNCo. has it setup- few people will use multiple services”….I call bullshit on that. There’s already dozens of examples where multiple services are useful- from split houses to, to business requirements to multiple phone lines etc. And all the future possibilities- education port, gov. services ports, multicast FTA TV port etc. The amount of flexibility you lose compared to the money you’d save (see above) for not having multiple ports is ridiculous. It ALSO locks in RSP provisions- if you want another service, you either have to bundle, use OTT services (nowhere near as integrated into systems) or change RSPs. Simon’s response to this on Whirlpool was “churning is easy and will be even more so on the NBN”….sorry, bullshit again. Churning now is NOT easy and even if it was considerably more so on the NBN (likely) a customer has the impetus to stay with their RSP inherently. Why? Effort. That’s what RSPs count on- it takes effort to change, so unless the saving or convenience is considerable, they won’t. This just entrenches this idea. Simon got very offended when we said it’s not surprising that idea came from a former Internode director, seeing as that was his forte- how to make RSPs more money. He got offended then didn’t reply….well, sorry Simon. Your innovation has done great things for the industry, but if you can’t stand up to scrutiny when criticised for certain ideas…don’t expect us to believe in them.

      – POIs- 7 redundant (14 total) instead of 121….well der. That’s what we’ve wanted all along for cost savings and true competition for even the smallest RSPs. ACCC said otherwise. Either lobby them or suck it up.

      Those were his main points. You can see the TOTAL savings were, MAYBE, 3%. (if you include no NTDs, maybe 6%) 3% and meanwhile about 20-25% of NBNCo’s revenue, probably more, would be lost.

      What Hackett was describing was an IDEAL NBN- one setup to maximise usage of the network for innovative ideas. One that RSPs essentially just used as a “bent pipe”, no real business portals etc. required. One that allowed RSPs to have full control of the network to do what they like with. And one that basically cost nothing to run. It was a true idealists picture of an NBN. Not an NBN for Australia currently, where the telecom sector is FAR from ideal.

      When Hackett was challenged by a number of people, he immediately hit out saying “it was an ideal NBN, not necessarily changes to the one we have….though I think alot of it could be integrated”….so which one is it?? Hackett knows why the current NBN had to be setup the way it was- Telstra & politics. Does that mean we end up with super cheap, unlimited, perfect connectivity? Nope. But does it mean we get decent priced, long term improvement to connectivity in the country from the government? Yep.

      My Issue with Hackett’s presentation was never the ideas themselves. It was the idea of shoehorning them onto THIS NBN when all it would do would be cause even more havoc. He should’ve been concentrating on supporting FTTP (as he has forever) and asking the government to be transparent and forthcoming to ensure consumers and RSPs alike knew what was going on. Instead he comes out with this presentation that has no real-world use…but tries to defend that it does?? Doesn’t make sense.

      That was my views on it anyway. I like Simon. He’s done great things for the industry and consumers. But he is a commercial industry guy. And commercial industry guys are ALWAYS out to ensure RSPs have the highest freedom to provide what they want for consumers, both for innovation AND to ensure profit. There’s nothing wrong with that…but this is a GOVERNMENT rollout. The NBN by a government does NOT have the same goals as an NBN built by the private sector.

      • I think the incompatibilities you point out between Simon’s ideal NBN and (your) reality show just how different government projects are to private sector. In the private sector you can change your mind, change direction and do what is best for you (not necessarily always immediately serving your customers wants).

        I think more debate on the technology and implementation of the NBN is healthy, but not when it devolves into personal attacks and vitriol. I think you could even tone down your critique of Simon’s presentation a little, as we should be encouraging alternative views and thoughts rather than shutting them down completely.

        • @elbento

          My problem with Hackett’s arguments are the way he presented them- as a viable alternative for our NBN now. They’re not. He even admitted that.

          I’ve no problems with ideas. Even ridiculous ones. But presenting ridiculous ideas as tangible benefits for a system already in place is not helpful for debate.

          Look, I think of all people Simon is the most likely to come up with great ideas for the NBN to streamline its’ approach. I think he’d make a valuable addition to NBNCo’s board. But I don’t think the ideas he had in his presentation are ideas that have been thought through properly in the context of what’s already been done. That’s my opinion. It could be very wrong, but I’ve outlined my argument for it.

          I’d like to note I didn’t personally attack Simon. I attacked his arguments. Perhaps a little more vehemently than I should, but even so. I have alot of respect for Simon. But he is not infallible either. Nor does he necessarily have the best NBN outcome for Australia always in focus. That’s what I was saying.

          • > But I don’t think the ideas he had in his presentation are ideas that have been thought through properly in the context of what’s already been done.

            So little has been done on the NBN that it wouldn’t be a great disaster to completely re-invent it. If the Coalition is seen to be reinventing the NBN to fix Labor’s failures then that is a story they can sell to the electorate.

          • So little has been done?

            Sure, they’ve only connected a third of a million premises. And have the better part of another million at various stages of construction.

            But the real kicker – they’ve built the back end that allows them to connect premises to the NBN all over the country. That, all by itself, is a massive communications infrastructure project, and took years to complete.

            Which, by the way, is why I so dislike the focus by some commentators on “premises passed” as the *only* measure of progress for the NBN. There was years of hard work in design & construction required before the very first customer could be connected, yet somehow that counts for naught?

          • Good point Bern…

            It would be like a building company who are building multiple homes deciding to do all of the foundations first and because all of the homes being built aren’t obvious, suggesting nothing is being done…


        • What personal attacks and vitriol? I thought Seven_tech’s analysis was right on the money without being at all personal. I have the greatest respect for Simon Hackett, but it’s intellectually dishonest to suppress valid criticism of an idea or statement because you respect someone. If anything, Simon should welcome such observations, disagreement and debate, because informed, passionate debate between experts is always the way forward. Ideological and intellectual dictatorship (no matter how well intentioned) will only ever result in stagnation at best, or more usually taking several steps backwards.

          I do agree that Mr Hackett is a visionary and it would be great to see him on the NBN Co board, but that doesn’t mean everything he says is gospel & everything he touches is golden – some of his suggestions are downright idiotic in the context of the actual real world functional NBN. That’s not an ad hominem attack, it’s an educated evaluation of his statements.

  3. Hackett is good, and he has a comprehensive knowledge of the industry in Australia. Although I don’t think of him in quite the messianic way that his fans do, he would be a worthwhile addition nonetheless.

    Although I can think of aspects of Hackett’s approach which might not be perfect, I guess the question comes down to – who would be a better choice? I can’t really think of too many people. His mate/boss Mick maybe?

  4. I thought Malcolm invented the Internet in Australia? That’s what Tony said…

    I think the main issue here is that Mr Hackett built a retail business on reselling another providers infrastructure. Making decisions in relation to running a wholesale business and building infrastructure may require someone with that experience more so.

    Yes I am aware that they installed DSLAMs in Telstra exchanges and have run fibre in Adelaide, but this is a little different to building a whole new network, managing a field workforce etc. Internode used Telstra to do this for them.

    He is best to remain on the board of iiNet and working with Michael Malone to strengthen their retail market position and drive for the #2 spot in broadband

    • Node also built up a pretty decent network of it’s own.

      They didn’t just resell telstra.

  5. Internode and iinet are bad for competiiton , they are and will be thorns for the nbn and iinet will buy out any competitor

    yeah good move

      • The recent ISP consolidation that you’ve seen has been driven by this fact.

        Consolidation was happening before the NBN, POI’s have nothing to do with it, and “market forces” everything…

        • NBNCo’s wholesale pricing model requires RSPs to have a critical mass and limits the plans that can be provided. For smaller innovative and successful players like Internode & Adam there simply wasn’t a way forward after the 121 PoI decision and the country is poorer for it.

          • If much smaller companies like “On the Net” can manage it, I’m not sure how the medium sized ones find it an insurmountable issue….

          • No, this isn’t the case, there is plenty of room to innovate, the problem is Simon doesn’t want to innovate, he expects the government to hand him a built network on a silver platter that he can easily slap a basic margin service on at minimal risk.

            I have posted a response to his points about 1Gbps plans on another article on this site, and showed that he wasn’t thinking outside the box enough. He talks about innovation when it comes to NBNCo, but doesn’t seem to want to take on any responsibility for his part in the equation.

            You can get a reasonably priced 1Gbps service (approximately $300/m retail) right now with as little as 500 users per PoI, and that is without taking into account the fact that you can utilise your other customers on lower tiers to further aggregate the bandwidth., thus bringing prices down even further. Over all 121 PoIs this represents only 0.6% of the market (assuming all 121 contain FTTH services and there aren’t any wireless only PoIs). And believe me when I say: I wasn’t even being creative when I worked that out.

        • Don’t deal in absolutes. You can’t say it had nothing to do with it. It would have been a consideration in any conversation. Whether it alone would have modified the decision is questionable.

          Dealing in absolutes leaves you open to attack.

      • I agree Mathew… however that was an ACCC decision, so go figure.

        On the plus side and as I have mentioned before when the usual suspects suggested “big bad NBN killing competition with only with 4 or 5 Australia wide RSP’s…”

        Err, that’s 3 or 4 more actual, truly Australia wide RSP’s than we currently have , so…

  6. HI Renai

    Maybe you should a little piece on whether or not Paul Broad will get a position.

    Considering his a major liberal party donator, and built a fibre network he’d probably be putting feelers out.

  7. Actually for my 2 bobs worth

    I would suggest the founders of Pipe Networks
    The track record in building and peering etc, not to forget overseas cables.
    One of the enablers of the Australian Internet as we know it

    Pipe’s two co-founders Steven Baxter and Bevan Slattery had “changed the landscape of Australian telecommunications forever”.

  8. Simon has responded on whirlpool: http://forums.whirlpool.net.au/forum-replies.cfm?t=2160998&ux=6258.

    A couple of interesting quotes:
    “Its also worth appreciating that while I put a lot into around 20 minutes in that talk, that talk is just the tip of the iceberg in terms of things that can be done. I could have talked all day – but I only had a 20 minute slot… that talk is the tip of the iceberg.”

    “The fact that the average both becomes eye-watering and that it doesn’t reduce again in later years… these are both indications that the network costs too much to build relative to what consumers should be paying to use it.”

    “One of the benefits of the ‘reset’ that is likely to be delivered to NBNCo as a consequence of the change of government can (and should) be to lay out every single source cost in building the NBN, and every single timeframe element required in the build process, and to aim to apply lateral thinking to removing as many of them as can be removed while still delivering a working network, and optimising the hell out of the rest.”

    “After all, the ultimate people who will pay for the build of the network isn’t the government – its you, as a user of it. Its a user-pays network build.”

  9. One issue with most people’s comments and suggestions above on who would be good for the nbn board.
    The Libs aren’t going to put in anyone who will conflict with their politically motivated policy for FTTN. So this rules out many people who would be ideal to be nominated.
    They won’t choose anyone that will have a reason to make them look bad by not following their specific mantra. All this talk about getting people with industry experience is BS. Their Lib mates will get first choice and anyone else will be passed over.

    • > The Libs aren’t going to put in anyone who will conflict with their politically motivated policy for FTTN. So this rules out many people who would be ideal to be nominated.

      I think we need to give the Libs the benefit of the doubt. Part of that is suggesting positive ways that NBNCo and the network plans can be reformed rather than crying over Labor’s failure. By any objective measure, Labor’s plan wasn’t going to enable revolutionary services to the majority.

      We should be thankful that we are being given a second chance, but it is all too likely that the negativity of Labor’s NBN fanbois will spoil it.

      • “By any objective measure, Labor’s plan wasn’t going to enable revolutionary services to the majority”

        Which objective measure is that? Can you please explain it. Because it sure doesn’t ring true to me.

        • I predict his “revolutionary services” will involve no speed tiers or data caps…and probably at least 1Gbps speeds.

      • “By any objective measure, Labor’s plan wasn’t going to enable revolutionary services to the majority.”

        Yes, Mathew, I’d like to see you explain this.

        • The draft NBNCo Corporate Plan (2013) has this to say:
          “As at 30 April 2013, 26% of NBN Co’s FTTP End-Users were on the highest available wholesale speed tier (100/40 Mbps), whilst 47% were on the entry-level wholesale speed tier (12/1 Mbps). These compare with 18% and 49% respectively forecast for FY2013 in the 2012-15 Corporate Plan.”

          Considering that 12Mbps is slower than HFC, FTTN, 4G and approaching half of ADSL2+ connections, I’d suggest that you could hardly call it revolutionary.

          The small number (e.g. less than 5% on 1Gbps in 2028 predicted by Labor’s plan) could more cheaply serviced by fibre on demand.

          My view that FTTP is the best technical solution has remained unchanged, however since the first NBNCo Corporate Plan and the roll out schedule, I’ve had serious concerns that Labor’s plans wouldn’t be advancing the country except for a select few.

          • @Renai

            He’s made this argument on every tech site I know and continually on Whirlpool, almost to the point of spam. We’ve attempted to show him people taking the 12Mbps product now, will not continue to do so. Not to mention the 12Mbps product also encompasses phone only and phone + BB and skews the bias of the wholesale products taken up as a result.

          • Yes, he does. But he believes rather than being a concious choice they will be forced to do so by economic constraints artificially imposed by NBNCo.

          • I’ve had serious concerns that Labor’s plans wouldn’t be advancing the country except for a select few.

            A select few being those that “can pay” for the faster services, right? I’d love to be a “network socialist” myself, but this is the real world, people earn different amounts and have different usage patterns…not everyone needs 1Gbps (I know I don’t…yet), or a terabyte of quota.

            They’d end up having to price it so that it would be out of the reach of lower earning families, and I, for one, would prefer to see as many as possible get it at a price they can afford.

  10. Oh dear (insert deity here)

    Has anyone seen this:



    Not only is she a born and bred Liberal, having actually served as a politician for the previous Liberal government (in itself a little dicey for a highly politicised GBE), she has almost zero experience in running companies. She was appointed to a board position on Crown Limited in 2011. That’s it. And I don’t consider presiding over the worst progression of Australian communications as “experiences” for what was supposed to be the best progression.

    Interesting she also championed the legislation that relaxed foreign ownership of media….and supported an internet filter…..I’ll just leave that there.

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