Former Telstra CEO regrets silence over NBN disasterOUS News


Former Telstra CEO Andy Penn expressed regret for not speaking out against the Coalition’s ineptitude on NBN. Reported by Paul Budde.

I FELT some justification when I read last week Weekend in Australia interview with outgoing Telstra CEO Andy Penn titled: “After the storm, Andy Penn reflects on his legacy.”

A key point of regret was that he was not more outspoken in his criticism of the NBN that developed during her tenure. He admitted that he was at the helm of the company when many of the negative effects of MFN became apparent to him.

Why do I feel a little justified about this? Ever since NBN’s core vision of providing the best possible broadband infrastructure for all of Australia at an affordable price was undermined by political interference, I have begun to point out what the implications of this policy shift will mean. Once you’ve decided not to build the best possible network and let good quality broadband out of reach for most Australians, obviously you have to ask yourself why bother?

All of these elements were clear to me, and I discussed it with many people in the industry, including then Communications Minister Malcolm Turnbull. I suggested to him not to give up fiber to the home (FTTH) for at least 94 per cent of all Australians. His argument was that we, as a nation, cannot afford it.

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My suggestion was to leave the end goal in place, but change the way it was achieved. However, with a prime minister like Tony Abbott, national interests were replaced by political interests at the helm, and there was no room for compromise or open discussion of the subject. Reviews have been stacked with those who support the government.

With the changes specified by the coalition government back in 2013, it became clear that the industry would also be affected by these changes. The cost of the change predicted by Malcolm Turnbull would be about $29 billion instead of the $43 billion projected by the Labor government.

It was clear that this was not possible and that the costs would be much higher and this would have a direct impact on how NBN would charge its wholesale customers. Now we all know that telcos are suffering from this policy, so it’s obvious why Andy Penn regrets it.

There were a handful of people who spoke out, and we got quite a bit of criticism from some people in the press, and we were called in along with a few others who had similar views – fiber fanatics.

At the time, industry influencers such as Andy Penn remained silent. While the industry as a whole has publicly supported the original national FTTH plan, key industry leaders have maintained a deafening silence. This has allowed those who support the political transition to second-rate NBN to denounce the original FTTH-based national broadband plan even more loudly.

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Only more recently has Andy Penn become more vocal on the issue, perhaps because it was now politically safe with the coalition government gone.

Those in the press who supported the Coalition’s political line that FTTH was not needed and that this cheaper Multi-Technology Mix (MTM) was good enough for Australia, and who opposed those who thought otherwise, have now gone silent. None of them are now in favor of the MTM, so it is understandable that their opinion at that time was based more on political beliefs than on what would be best for the country.

Already on the eve of the last elections, it became clear that the Coalition was retreating on this issue. Both parties have agreed to invest billions of dollars in the transition to FTTH. So, by default, we now have a sort of bipartisan support for where NBN should go.

There are many politically charged issues ahead. There are additional costs associated with NBN’s transition to FTTH and financial challenges that NBN is facing. The latter will require government intervention, and last but not least, we need to move towards privatization as it has become very clear that the government cannot manage NBN.

Paul Budde is an independent Australian columnist and Managing Director of Paul Budde Consulting, an independent telecommunications research and consulting organization. You can follow Paul on Twitter. @PaulBudde.

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