news Communications Minister Malcolm Turnbull has published a statement implying that much of the problems with the National Broadband Network rollout in Tasmania could be pegged to NBN contractor Visionstream, stating that the company has done little work in the state since July and is asking for its rates to be substantially enlarged to complete the work.
In early October, following calls by Tasmanian lobby groups for the Coalition to conduct a full Fibre to the Premises rollout throughout Tasmania, as opposed to using the less ambitious Fibre to the Node rollout that is the Coalition’s preferred broadband technology, Turnbull has described the National Broadband Network rollout in Tasmania as being “dead in the water”, with no progress in the state having been made “for months”.
And a week later, internal NBN rollout figures obtained by Delimiter current as at 7 October this year showed that the rollout in Tasmania had actually gone backwards over the several months preceding October. In a new interview with ABC local radio in Hobart at the time, Turnbull said with regard to Tasmanian NBN contractor Visionstream: “As far as we can see no work has been done by Visionstream for at least two months and they’ve basically downed tools … “It’s been dead in the water as far as progress is concerned in Tasmania for months.”
The NBN rollout issue is particularly contentious in Tasmania because the state’s broadband infrastructure has lagged behind the rest of the country for many years, owing to Telstra’s monopoly until the past several years over traffic carriage across Bass Strait. The high price of access to Telstra’s network has kept many ISPs from entering Tasmania and building their own infrastructure. For these and other reasons, Labor’s NBN project had prioritised Tasmania on paper — but much of the rollout in the state has been delayed, as it has also been delayed on the mainland.
In a further escalation of the ongoing conflict with Visionstream, late last week Turnbull published a statement on his personal — not ministerial — website clarifying the Government’s position on the issue.
“Prior to the election I said that the Coalition would ensure the NBN Co honoured all of its existing contractual obligations including those with respect to the Tasmanian rollout,” Turnbull stated. “I also said that we did not have access to the terms of those contracts.”
“The NBN Co has advised me that it has a contract with Visionstream to run fibre past about 190,000 premises in Tasmania, of which around 18,000 have been already passed by Visionstream making a total of 32,000 passed in Tasmania. That contract specifies certain rates at which Visionstream will be paid for its work.”
“I am advised by NBN Co that Visionstream has slowed down its work considerably, passing only 2,000 premises since the 15 of July. The NBN Co further advises me that Visionstream now complains that the rate to which it previously agreed is too low and is not enough to enable it to get the job done. Visionstream has asked the NBN Co to substantially increase the rate for this work – in other words it has asked for more money to complete the project.”
“The NBN Co is currently in commercial discussions with Visionstream about this matter and the Tasmanian rollout is receiving close consideration in the work on the Strategic Review. Honouring an agreement means complying with its terms, but for a contract to be performed both sides have to be be prepared to do that.”
Visionstream’s contract with NBN Co to deliver the NBN in Tasmania was signed in March 2012 to the value of $300 million, after the company had already secured more than $750 million worth of NBN contracts in general. In addition, the company has signed other major contracts with NBN Co. For example, in March this year it picked up a $334 million deal to roll out the NBN in Victoria, Queensland and Southern NSW. “Visionstream has extensive experience in the design, construction and maintenance of telecommunications networks,” NBN Co’s statement said at the time.
A spokesperson for Visionstream has been invited to respond to Turnbull’s comments.
What we’re seeing here is the predictable and expected fallout from project failure. I would draw readers’ attention here to two previous articles. In mid-October:
“Ex-Communications Minister Stephen Conroy has acknowledged that the private contractor model which NBN Co attempted to use in its national fibre rollout has failed due to the inability of the company’s partners to deliver on their commitments, in an admission which again raises the possibility of Telstra being brought back in to assist with the rollout.”
“A growing body of evidence is mounting that NBN Co should seriously consider contracting the nation’s incumbent telco Telstra to build large sections of the National Broadband Network infrastructure, no matter which major side of politics wins the upcoming election, and no matter whether a fibre to the node or fibre to the premises model is eventually chosen.”
It’s obvious at this point that the contractor model is simply not working for NBN Co. It’s time to try a new approach.
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