Switkowski worried about “heroic” effort needed to meet NBN targets


blog Some of you may recall that then-Shadow Communications Minister Malcolm Turnbull was fond of using the word “heroic” with reference to the NBN company’s rollout targets and revenue assumptions under the previous Labor Government, indicating that he did not believe they were realistic. With this in mind, we were surprised this week to read in the pages of the Financial Review that the NBN company’s chair Ziggy Switkowski has chosen the same word to apply to the NBN’s rollout plans for the next five years. The newspaper reports (we recommend you click here for the full article):

“… speaking to The Australian Financial Review before the announcement of the three-year plan, Mr Switkowski said “the year ahead” would be about “achieving a level – whether it is footprint or activation or whatever – that is compatible with completing this project by 2020, which I must say is still an heroic outcome when you think of where we are today”.”

I don’t have enough detailed knowledge at this point to say whether the NBN company is likely to meet its 2020 targets. However, I must say that I consider it a little extraordinary that the chair of the project appears to be completely unaware of the irony of using this term with respect to this project. I do wonder whether I will be referring to this article in future years with relevance to the progress of the NBN rollout.


  1. Mr Switkowski is used to heroic efforts. Especially nuclear efforts that see the bigger Kodak camera picture.

  2. “completing this project by 2020, which I must say is still an heroic outcome when you think of where we are today”
    At a rate of 20 connected premises every two years, I’d concur.

    • I agree since Richard saying the SR only had NTM 9sec faster than FTTP. Which ATM the current rate for FTTP was around 10K a week. Which makes MTM only 1 day faster. And to get say 9mil to go with have to increase that 10k rate to 37.5k a week.

      • @jk you might need write out your workings;-) As posted yesterday SR figures conclude 3yrs sooner (30% faster), tens of billions cheaper (35% less). Savings for the fixed line component proportionally greater (we’ve done the capex comparison before using CP16 CPP figures; FTTN half, HFC a third).

        It will be a effort, risks are all on the downside (positively acknowledge by the new management, risk something highlight by some from the beginning). MTM the only way to deliver in this timeframe.

        Many in europe shown the way utilising FTTN (BT perfect example), others in the US for HFC. 2.5m premises passed in next couple of years using HFC alone. Hundreds of premises with each deployed node.

        If not for rudd/conroy delusions of competency the fixed line upgrade would be nearing completion. If majority done by the private sector it would be completed, Australian’s outside of LTE using highspeed internet today at a fraction of the spend.

        NBNCo’s rollout plan published we’ll keep an eye on performance vs targets (as some did before).

        • Yes Richard the SR figures for MTM is 30% sooner and cheaper but the Turbull said it would 59% cheaper and 7 years sooner than than his current model. But then those people deploying FTTP must be so quick being able to lay fibre dig up people back yards and be only 9 sec behind some connecting a copper wire to a node.

          But then now the CP15 is only 10-15% cheaper than the SR and les than a sec sooner per premises than the SR. It’s even dear and takes longer than the HFC/FTTP rollout.

          But then the current CP15 makes a joke of how underestimated the MTM in the SR and a brain fart of a fully costed plan for $29B and complete by 2016 and the overestimated of FTTP since the cost of FTTP in the SR was at over $4K now down to $3700 or the fact that FTTP still haven’t gotten to Turnbull quoted $90B price tag.

          Will it be by the end of the rollout when the cost of MTM eclipse FTTP and the cost of keeping gives it little to no chance to make any revune

          But then in your delusions you forget there was a tender process for FTTN in which your side has been quoted calling FTTN fraudband which is the biggest joke of using it now.

          So what your saying is Conroy should have forced the separation of Telstra but then Howard should have done that at the time of sale.

          Can you give any major rollout a out if private business rolling out fixed line. Even Telstra said during the Tender process that they would just over build with fibre. Since Telstra can since they still own the fibre in the HFC.

          • @jk the Howard’s govt policy wasn’t for a govt owned wholesale telco, actually the exact opposite.

            Recognising the significant advantages of a competitive market their position was to support such an outcome (local loop unbundling, dark fibre, various ISPs with different offerings, etc). Whilst they’re policies of that govt I didn’t agree with, this I certainly supported.

            Acknowledging a number of non-competitive markets (largely due to pop density) they targeted govt subsidies to address those failures (satellites, regional fibre program, OPEL, etc). Part of their strategy was the staggered sale of all remaining shares in Telstra:
            1997 T1 33% $3.30 $14.2b
            1999 T2 16% $7.40 $16.0b
            2006 T3 31% $3.60 $15.4b
            2006 FF 17% $3.60 $8.9b

            Unsurprisingly a free market proponent (such as myself) would support this perspective; competition for functioning markets, transparent subsidies to address acknowledged market failures.

            Rudd / Conroy took to the election a $4.9b (not a cent more) policy for universal high-speed internet. They were comfortably elected (Howard becoming the second PM to lose his seat).

            The NBN policy was entirely the Rudd governments concoction, sold by Conroy. It changed the direction of this entire sector. Investment halted in all areas likely to become into competition with the govt subsidised monster.

            I’ve never rated Conroy’s negotiation ability, threats and intimidation of the unions (fascinating the royal commission) often doesn’t work in the private sector. Complicating negotiations was the then senior management team at Telstra (popularly labeled in the press at the time as the “Three Amigos”, though I understand Trujillo took great offence).

            Given Conroy’s approach his tender failed, massively. Such was the contempt displayed Telstra’s full submission was a dozen or so pages. Conroy’s appointed panel (of so-called “experts”) dismissed the collective commercial knowledge of the entire Australian telco sector and rejected all tenders in favour of a brand new govt owned and operated business entity to start from scratch, recruit key management personnel and thousands of staff, negotiate contracts worth tens of billions, managing physical connections to millions of premises that would hopefully generate billions of revenue each year. What could go possibly go wrong? Well ok the most obvious were outlined by a few of us at the time.

            NBNCo was formed in April 2009. It’s first CP11-13 collapsed in about a year. The second CP12-15 started to fail immediately. The rollout performance was so below predicted premises passed management and the minister resorted to Orwellian language contortion. “Construction commenced” became the new talking point, an absolutely meaning metric given the slightest pre-planning was all that was required for an area to be included. Still they failed, MDUs a particular problem without a solution (NBNCo’s recommendation of FTTB rejected by Conroy, it had to be fibre). Next they redefined premises passed from ready for service to also include service class zero premises (properties without the ability to order a service for an indefinite period of time).

            Yet still they failed to reach their targets; finally redefining the targets so low that they actually made one. However their actual performance vs the own CPs is devastating (‘000s):

            Corporate Plan 2011-13 2,711 / 3,256
            Corporate Plan 2012-15 1,307 / 1,681

            Actual FY14 (inc SC0) 492 / 604

            It was amazing pointing out such failures was repeatedly shouted down, then and since b

            Conroy was replaced in the Rudd/Gillard/Rudd merry-go-round, Albanese became the ludicrously titled “Minister for Broadband, Communications and the Digital Economy”, names reflective of dominating style over substance / talk over deliverables.

            Other major govt initiatives collapsed as well, unsurprisingly their abilities not matching their imagined ones (too much West Wing watching).

            I suspect Albo drew the short straw. Whilst it’s not uncommon for a new minister to be unfamiliar with a new portfolio the pre-election ABC debate between Albanese and Turnbull remains a cringeworthy classic. Tech is difficult, but I’ve can’t remember seeing a Govt minister with as little comprehension of his portfolio and Turnbull could taste the blood in the water.

            As a further sign of the times a revised CP was withheld from the public by the minister until after the election.

            Recent Oz Telco history as I see it. The entire NBN policy and its obvious failure is the direct result of Labor’s market intervention. The Coalition’s continuation of this policy folly (albeit with significant, sensible changes to reuse existing infrastructure) makes them responsible for their contribution and will be held accountable for their failures (many a success or two). This disaster has a long way to play out yet.

            As the CBA showed it is difficult to recover money once spent. As for timelines even less than BT’s as they’d also used HFC ie they’d been done for sometime now, even OPEL for fw.

          • what investment was any private sector was going to do against Telstra. Even past 2007 we have Telstra investing in ADSL1 and charging for ADSL2 speeds.

            That’s the big problem with your CBA that there was private investment when there was almost 0 investment before Rudd and Conroy in 2007.

            But then then according to you the poorly maintained water logged plastic bags CAN is fit for purpose when Telstra can’t even do naked DSL due to the faults in the network.

        • “If not for rudd/conroy delusions of competency the fixed line upgrade”

          One can easily say if not for the Abbot/Turnbull ~3 years of political delays majority would all have a fibre network now too.

          • @simon yes it would be easy to say (and many here would believe it, presenting even a rumor of the words being spoken as proof of delivery). However not even Quigley, who was fond of saying many things despite performance, made such a claim. As we’ve seen from NBNCo’s actual realworld performance (no models or predictions required) laying fibre and entering every premises is time consuming, expensive and skill labour intensive.

            The pace of FTTH deployment in the last two years has increased, there’s been no slowdown or stasis. Yet still nowhere near the pace required to support such a claim.

            Delayed were HFC & FTTN products (not ~3yrs), both the fault of the ambitious coalition election policy who’s timeline and costs figures destroyed in both the SR13 and later CP16. Given products now available we’ll be able to compare the relative performance (cost and speed of delivery) of the alternatives. If the rollout plan targets are meet will result will be devastating for many here. I will be again watching closely, analysing the data as its published.

          • Wow so you just said the FttP roll out increased (remembering the Coalition do not suuport FttP they support FttN/HFC/MTM) yet you also admit their own MTM has faltered disgracefully.

            Yet you still favour the disgraceful…

            Anyhoo, so if this FttP increase is factual (sorry but after your umpteen lies I’m no longer sure what to believe, but I’m thinking 2% factual is about right). Regardless… how do you think such a FttP increase occurred?

            Magic, Coalition brilliance (remembering they oppose FttP), the new NBN-fail management (who also are told to roll out MTM not FttP) or perhaps those intent on rolling out OBSOLETE FttN, just letting the already ramping up FttP (thanks to Quigley) continue?

            Sorry no need to answer of course your answer is b… ;)

          • FTTP increasing except less build contract where being issued as more fsam being completed the number peaked at 199 June 2013 dropped a little due to asbestos and then continued to decline under Turnbull management until they took those figures off the website.

        • Sorry Richard I have to say it…

          You are starting to sound exactly like Mathew 50/12…and simply repeating the same BS at every blog 24/7, which (like Mathew) no one is buying nor more importantly, not even your colleagues are silly enough to be agree with or support you?

        • Well let’s see according to the private sector aka Telstra we would have had FTTP by 2010 at no cost to the taxpayer according to a strategy paper back in 1995.

          • @jk true, however Telstra’s proposal wasn’t accpetible to the ACCC. At which point they should have been engaged to see if a compromise was possible. This might have required management changes at Telstra.

            Exhibit two: Trujillo’s HFC upgrade to 30mbps in 2007, later 2010 proposed upgrade to 100mbps meet by Conroy threats to restrict their cellular spectrum. 2.5m premises prevented (double what NBNCo has done in 6 years and $13b).

            Working with the private sector would have delivered a much better outcome. Having to run fibre to an urban business park because of a decade of frozen telco investment an entirely predictable outcome of an announcement to overbuild everyone using near unlimited borrowings against future taxpayer earnings.

            Only NBNCo’s inability to deliver has seen a few return to cherry-pick the high revenue / low cost clients NBNCo needs to underpin its revenue model. As I said this policy has a long way to play out, it won’t be kind to taxpayers.

          • Richard let’s look at that Telstra 2003. Wanted to do FTTN but not be an incumbent wholesale service provider but be the only provider on the FTTN so no competition either in fixed line or ISP. On top of that Telstra wanted to charge for more for broadband that was at the time slower than what they where offering on ADSL1.

            Yep Telstra is at its best.

            But now thanks to Turnbull great what market skill by board members that have Telstra share (no conflict of interest there) has now dump any response ability to fix the pit ducts asbestos now all the cost to the NBN.

            “Only NBNCo’s inability to deliver has seen a few return to cherry-pick the high revenue / low cost clients ”
            Really except that TPG could had done FTTB anytime and after all the crowing when Turnbull shadow comm on infursturture competition announce after Turnbull got elected. But instead of Turnbull promoting competition that he was crowing about he has tried everything to stop it even with NBN taking TPG to court.

            But now with all that over building of FTTN and HFC they will be lucky to even deliver the min 50Mbps they promised.

  3. Yes all just let’s pretend and fully accept that 2016 was never promised and give the benefit of the doubt.

    Then in 2020 (when suggesting 2024) let’s just pretend 2020 was never mentioned.

    Of course whilst still whining about the start up FttP being slightly behind their own aggressive targets and how great obsolete copper is.

  4. It’s probably worth it to add a landing point here: the 2020 Tokyo Olympics. This will be the first ever 21st century technology Olympics: virtual reality, augmented reality and full streaming will occur to a breathtaking extent. So the notion of “completion” by 2020 is pretty important. But can this FTTN multi sultana soup be ready for such an event? Or will we be an Antipodean backwater who follows the events with internet that’s like having black and white TV. I think that my view on that is pretty obvious by now.

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