ITPA Comment: Commonwealth Recommendations on NBN Rollout
Highly Recommended Reading?
Breaking down the 23 recommendations delivered by a scathing Commonwealth Government, Joint Standing Committee report on current status of the NBN rollout
By Robert Hudson
On Friday, September 29, the Commonwealth Joint Standing Committee that had been assembled to review the National Broadband Network (NBN), delivered its first report on progress of the rollout for this critical national infrastructure project.
It’s not pretty.
While the cynic within me suspects the timing of this release - on the eve of Australia’s two major footy grand finals - was deliberate, so it would receive little public attention in a news cycle dominated by our sports obsession, the report itself is comprehensive, scathing and worthy of scrutiny.
Including some very damning evidence of incompetence, waste and failure to deliver the right services for the nation, this report should be used as a blowtorch to the belly of this tax-payer-funded debacle.
Meanwhile, the people and processes responsible for this mess are still largely successful in avoiding the bad publicity they deserve.
At 210 pages, the report is too weighty for most to try and comprehend, so let me start by having a look at the 23 recommendations it offers in its opening preamble.
There is a lot of focus in this report on "last mile technology" (FTTN vs FTTC vs FTTP vs HFC vs Fixed Wireless vs Satellite/SkyMuster), where there are clearly serious issues - to ignore them would be negligent.
Technically, the solution being built is a dog’s breakfast that no genuine network designer with a thought towards long-term operational supportability would contemplate for its poor efficiency, inferior performance, high short- and long-term costs and inevitable maintenance nightmares.
Disproving the suitability of the flawed technical configuration is the subject of another conversation. More broadly, what immediately appears to be missing in this report was any reference to the seemingly inadequate pricing structure offered by wholesaler nbn Co. (nbn) to Retail Service Providers (RSPs).
To my view there are even bigger issues providing significant speed-humps to nbn delivering the type of nation-building outcomes that the level of tax-payer investment deserves. That is what I want to focus on here briefly before looking at the report's recommendations.
Simply put, the pricing model being advanced is a direct result of the current government's short-sighted requirements (read political goals) for nbn which is to prepare itself for sale to private ownership as soon as possible.
If Australia’s RSPs are ever going to be able to offer decent, affordable services to the nation’s business community, public service institutions and residential telecommunications customers, the wholesale pricing structure simply must change.
I’ve heard the excuses from nbn chief, Bill Morrow that people need to expect to pay more for broadband Internet. This is, frankly, a ludicrous position to assume. We already have some of the most expensive Internet service fees in the developed world and this is now married to our rapidly sliding international position in terms of average speeds.
I don't think all the fault for the cost and performance issues lies with nbn itself, nor with Morrow personally - he’s been given a job to do, within a set of constraints, and he’s doing it. Instead, I think the main culprit is the Government that has painted the organisation into the corner it is now trying to work its way out of to meet the unrealistic expectations being asked of it.
But I digress. Here is a summary of the 23 recommendations to emerge from the report and some thoughts from me on each of them:
Recommendation 1 - Produce a costed plan and timetable to complete the fixed line network using FTTC (curb) at a minimum or preferably FTTP (premise).
I don’t think this is strong or well-defined enough recommendation, and nbn can find ways around achieving the ideal goal here - FTTP, as originally intended before the current government took power. It does, however, clearly show that there is a belief that FTTN (Fibre to the Node) isn’t fit for purpose and should be dumped.
Recommendation 2 - Commissioning of an independent audit of long-term assumptions underpinning nbn's financial projections and business case.
Completely agree with this, but the terms of reference need changing. The NBN should always have been a nation-building project. It should not have been about cutting corners to create an artificial profit so that it can then be sold off. Ledger-driven ROI simply is not an appropriate metric of success for nbn.
Recommendation 3 - Direct nbn to establish a regional and remote reference group to support the effective rollout of the NBN in rural and remote Australia and to ensure delivery meets with obligations.
This is important. If driven by ROI alone, nbn is not going to deliver quality services to regional areas. Too much distance to cover, too few paying customers, cost of maintenance too high. One of the objectives of the NBN should be to allow the possibility of the next Google, Microsoft or Facebook to emerge from Geraldton, Whyalla, Bairnsdale or Gulargambone. Such a committee must include representation from multiple independent industry and community organisations.
Recommendation 4 - Ensure users are aware of the maximum Layer 2 speeds of service possible at any location.
I also fully support this. It could by individual location or at least as a range per technology choice (e.g. range of speeds on a given node). This must include both downstream and upstream service data which then allows RSPs to have a yard-stick against which their Layer 3 services can be measured.
Recommendation 5 - Ensure active handover is properly managed under a best practice framework when a premise is declared ready for service.
Another tick. This is especially critical under the Multi Technology Mix (MTM) framework. nbn Hybrid Fibre-Coaxial (HFC) services have been plagued with issues and appear to be being used as a stat-padding mechanism by nbn where it claims, "premises passed" but those premises cannot be serviced.
Recommendation 6 - Provide advice to committee on how nbn deals with complexity of installs including how areas with no Internet are prioritised.
I agree with this but with caveats (because at present, it simply means report back to the committee). A minimum performance threshold needs to be set to ascertain areas requiring focus (e.g. anything less than 5Mbps). Cost of service also needs to be considered - it's not reasonable to claim a premise has Internet access when the only viable option is expensive 4G data. Cost must be "like for like". Rather than simply reporting back on complexity, nbn should be expected to set (and then meet) reasonable deadlines for completing these "complex" installs.
Recommendation 7 - Disclose areas previously designated to be serviced by FTTP/FTTN but which are now to be serviced by satellite. And explain why.
Fully support. Satellite should be the last option due to latency and potential over-subscription issues. The switch to satellite to avoid expensive installs is almost exclusively driven by the existing requirement for nbn to become a "commercially viable" enterprise. As stated before, this is not what the NBN should be about.
Recommendation 8 - nbn to provide access to towers for mobile telephony.
The first thing that comes to mind here is; Access to who? For what services? Under what conditions? And, with what limitations? I think this recommendation needs significant further clarification.
Recommendation 9 - Provide sufficient Sky Muster (satellite) capacity to allow separate business and residential services to a given premise.
This is a good recommendation, with the caveat that it needs to be technically feasible for a given area before it can be offered - if there are limitations on the existing Sky Muster satellites that prevent this from being possible, then there’s no point wishing for it.
Recommendation 10 - Set data allowance benchmarks on satellite services which match fixed-line averages.
I fully support this. There are no reasons why users who already suffer by only getting satellite services should then also have restrictive data allowances thrust upon them.
Recommendation 11 - Ties Recommendation 3 into satellite services.
Makes sense. Only remote, regional/rural services should be on Sky Muster anyway (see Recommendation 7).
Recommendation 12 - Tie nbn service performance obligations to retail customer requirements, not to RSPs.
This is a recommendation which I think is critical. There needs to be a reversal of the current situation where an end-user can't easily contact nbn directly - it seems it is currently deliberately hard for consumers to talk to nbn directly, and they have even advertised nationally saying; “Don’t call us, call them” even for issues that are out of the control of RSPs. It’s ludicrous and nbn should be the first point of call point for all faults. Obligation to rectify issues must rest with nbn unless they can prove that the fault is with the RSP.
Recommendation 13 - Introduce business-grade plans specifically designed for SMBs with service level guarantees.
Another good recommendation, especially if we are trying to promote business productivity improvements and innovation. Business grade services (with performance guarantees, penalties etc.) should always have come very early in the mix to help fund the early rollout stages. There are still no specific products/services available today catering to this massive component of the Australian economy.
Recommendation 14 - Telecommunications Consumer Protection Code be modified to ensure retail customers are kept up to date with all relevant data and dispute resolution options.
Again, this essential. Even though nbn may only deal directly with RSPs, ultimately the end-user is always the critical focus of a service and the wholesaler should not be able to divest itself of this responsibility as it currently does.
Recommendation 15 - Technology Industry Ombudsman (TIO) to have power over nbn as well as RSPs to facilitate complaint resolution.
Full support for this as well. There is currently a lot of finger-pointing between nbn and RSPs and the TIO currently has no authority to step in and help mediate. This is a major fault with the current regulatory framework.
Recommendation 16 - nbn to clearly spell out and communicate complaints handling processes for consumers (and stick to them).
Completely support for this notion. A fundamental consumer right currently being flaunted.
Recommendation 17 - Australian Communications and Media Authority (ACMA) develop and introduce an updated Telecommunications Consumer Protections Code (TCPC) that specifically addresses NBN.
Long overdue so 100 per cent support from me.
Recommendation 18 - ACMA introduce updated statutory determination for RSPs to notify consumers of known faults and service impairments/complexities prior to commencing service.
Large numbers of complaints about NBN centre on people being hooked up to services that experience has shown are problematic. Common consumer rights suggest they should have been advised in advance.
Recommendation 19 - nbn should prominently publish monthly information relating to its end user satisfaction metrics that can be mined and broken down into all sorts of data sets.
This potentially opens a can of worms. Including net promoter for overall service as well as per-service-type stats or per-RSP satisfaction that can be broken down in various ways is admirable but given that nbn currently operates at arms-length from consumers, one must ask; Who would gather the info? Who is going to ensure and verify the integrity of the data in the first place? RSPs? ACMA? ACCC? Someone else? This is expensive work. Who pays? I think we know where that cost will eventually end up.
Recommendation 20 - Expand role of TIO to regulate and monitor nbn services.
Completely agree. No doubt, nbn should be a member of the TIO and subject to its rulings and penalties. At present, there is no independent arbiter of issues between RSPs and nbn. Consumers suffer from the ensuing chaos.
Recommendation 21 - Department of Communication and Arts with responsibility to report on fault restoration, service implementation, network performance.
This one seems to be a little bit of bureaucratic overkill to me. Surely nbn can publish this data themselves on their website as part of other regulated reporting?
Recommendation 22 - nbn to review and report on its processes and conduct regarding the engagement, training, co-ordination and dispute resolution with subcontractors.
I am not sure why this has not already been done. Just crazy. And the point is conveniently buried in Recommendation 22? These business processes are fundamental to best practice quality assurance, service management and project management frameworks designed to create efficiencies, enhance governance over operations and improve service delivery. They also help greatly in reducing cost blow-outs.
Recommendation 23 - Australian Government to ensure that digital inclusion is measured and reported.
Good idea. I think the level of telecommunications services availability across communities is as important as measuring wealth inequality. The two are intrinsically linked if we are to be an “innovation economy” with opportunities for all citizens. It will help to demonstrate the true value of the NBN as a nation-building project (as opposed to a commercially saleable asset).
Article written by Robert Hudson, President ofITPA Australia.