Conflict Of Interest & Substandard Deployments

art-telstra-620x349Conflicting Mates

With recent news that Malcolm Turnbull has appointed his old chum JB Rousselot, ex-Telstra AND ex-Ozemail executive, to head up the strategic review, it’s becoming increasingly apparent that conflicts of interest are being ignored by Turnbull. If this was done in the corporate world there’d be ACCC investigations & the like, but unfortunately, the way Turnbull is orchestrating the end of the NBN, this will not happen.

There is no defence for behaviour like this, it’s clear that the review is being set up to find in favour of a VDSL2, even though every piece of economic, performance, & societal benefit data shows this is the worst solution, will take longer now the NBN is being ramped up, & will cost far more even over the short term. Not only this, no doubt Turnbull’s “private sector can do it better” rhetoric will rear it’s ugly head. What form this will be in, I’m unsure, but the company best set to reap the benefits of a “private sector network” windfall is Telstra.

That’s funny, because ex-Telstra CEO, Ziggy “No Investment” Switkowski, is now CEO of NBN Co. Not only that, we can see ex-Telstra directors & senior management littering the project now, when previously there were none. Don’t forget, Telstra was barred from the NBN due to their attempts to bypass the tender process. If you think for a moment Telstra won’t throw their weight around now that their friends are running the show, you might want to think twice.

At this stage Turnbull is refusing to answer questions on the conflicts he has put in place, & why he has installed non-infrastructure & non-telco directors on the board. Something he vehemently opposed in the old NBN.

Fibre To The Bullshit

In other news, NBN Co has announced the will start deploy FTTB to MDUs. I don’t know whether to laugh, cry, or be outraged. This idea was canned before the 2012 NBN Co Corporate Plan was released, citing technical limitations of FTTB devices, and they’re not wrong.

An FTTB ISAM, as I’ve discussed in previous articles, is essentially a cut down FTTN ISAM. Not bad, you might say. Well, no, really bad. Far worse than any FTTN deployment ever could be, & not because of the ISAM, but because of where these are being deployed.



Firstly, we have the body corporate to deal with, who are going to be hesitant to green-light a few hundred thousand dollars of equipment that they don’t own. Then there’s the power consumption, who pays for it? NBN Co? The body corporate? Residents?

This is all without getting to the crux of the problem: the copper. The worst copper in Australia is not in the street, it’s not even in factories that string up cable where they want, it’s deep inside the walls of Australia’s MDUs (Multi Dwelling Unit). The cheapest, nastiest cable is used in MDUs to save money. It will generally be 0.25mm diameter, saving hundreds of thousands of dollars in cabling costs. This has an huge affect on VDSL2 speeds, even with vectoring. The recommended diameter of cable for VDSL2 is 0.50 or above, meaning this cable is around 1/2 the size of what’s required.

Add to this that telcos do NOT maintain the copper on the customer side of the comms room in MDUs, the body corporate does. So if you have a cable fault, no one will fix it. YOU will have to pay a contractor the body corporate approves to fix the problem.

The current rate telcos pay contractors is around $300 per job, no more than 30 minutes. So if you live in an unit with a shitty line you could be up for a fair hit, if you want your 0.25mm copper replaced with 0.50mm, good luck. Why good luck? Well, it can’t happen, that’s why. The conduit designed for 0.25mm does not support 0.50mm, even if it’s wide enough, because not everything is about being able to fit the copper in the tube, but get it past the 90° bends in the line. Every cable has a minimum bend radius, where it will not bend any further without damaging the cable.

The funny thing is, this has all been discussed before, & Strata Community Australia had the following to say back in April this year:

For apartments, they are dreaming if they think they are going to get 25Mbps … Most residents in Bondi will have worse internet connections than in Boggabilla

So what’s the upshot? Why do something so monumentally stupid? Well, apparently screwing over ~25% of Australians is going to save… wait for it… $800m! Yes, that’s EXACTLY how much BIS Shrapnel said would be saved YEARLY by retiring the copper network. In fact, they said that cost would go much higher over the next 5 years.

The End Is Nigh

end-of-the-worldI’m not sure who came to the conclusion that deploying FTTB was a good idea, but you can bet it was one of Mal’s mates. What I find strange is that this change would happen before the reviews, audits, & Turnbull paying his mates to find in his favour.

Does this mean the reviews aren’t worth the hard disk space they are stored on? That they are just a smokescreen so Turnbull can give his mates jobs while simultaneously killing off an FTTP NBN? It’s clear that there is no hope in saving the NBN with Turnbull at the helm, especially if we go back to Turnbull’s earlier statements on the NBN:

For the past 30 years, around most of the world, there has been a realisation that governments are better off leaving it to the private sector to create, own and operate businesses.

That is why Telstra (and its peers abroad such as British Telecom) were privatised. It’s why businesses such as Qantas and the Commonwealth Bank were sold, and have performed so much better in private hands than before.

It’s clear that Turnbull has no intention of finishing the NBN, & even the idea that meeting 2016 targets is starting to be dropped, with MPs now saying “should” instead of “will” be completed in 2016. This joke of a Communication Minister can’t even answer basic questions as to why he is doing what he’s doing, well, he won’t, because he knows the answer is “Murdoch told me to”.

The key with most of Turnbull’s arguments to change the NBN is that they don’t meet up with logic. Not only will this cost billions to do, it will remove future generation’s chance at being part of a competitive global digital economy. For anyone to argue that we should deploy a worse network to save less than it costs to maintain the network for 3 years is laughable. Then again, this is what we’ve come to expect from Turnbull.

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Conflict Of Interest & Substandard Deployments by Sortius is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
  • omgwtfbbq

    Thanks for the enlightening (as always) article. Just thought I would clear up a few mistakes in your post though:

    1) Ziggy is not the CEO of NBN Co, he’s the Executive Chairman and *acting* CEO, until a new CEO is found. The difference might be minor, but it is definitely a difference.
    2) NBN Co has been full of ex-Telstra people for years, well before the Coalition got in power. This is to be expected, it’s not like there are many people with telco experience in Australia who have never worked in Telstra. Although I do expect this trend to increase dramatically as the old boy’s club mentality sets in.
    3) NBN Co are not deploying FTTB. They are doing a *trial* of FTTB in ~10 MDUs, as well as a trial of FTTN. None of this is part of the NBN Co corporate plan and the rest of the rollout will continue as FTTP until such time as the review is complete, and then some. Although I have little doubt that the FTTB trial will be a “success”, I still hold a little bit of hope to the contrary.

    • Sortius

      1) Splitting hairs makes you look like a tool
      2) They weren’t on a director level, in fact, Conroy avoided Telstra executives due to the conflict of interest
      3) Trialling is deploying, they have no mandate to do this before their precious reviews are completed. Installing FTTB, even for a trial, is deviating from the current directives.
      4) Passive aggressive list responses make you look like an idiot.

      • omgwtfbbq

        1) Disagree about splitting hairs. People acting in a position usually sit in a caretaker mode. Not sure how it will work given he is also in another position. Either way, he will be replaced so long term it is a big difference.
        2) True, but there are some at the C level, and a gaggle at Senior Management. That’s what I was referring to.
        3) This may be, but this is still a big difference and a trial could be viewed as part of a review of different technologies, which is what the review is about. Either way, your article does appear to imply that a decision has been made to move to FTTB, even if this was not your intention.
        4) I don’t understand your response here at all. How was I being passive aggressive? Did you take my first sentence as sarcasm? I truly enjoyed and was enlightened by your article, and absolutely agree with your conclusions. I just thought I would point out some minor quibbles. You’re the one who appears to have responded with the passive aggressive list.