nbn™ builder prioritises easy premises, because it must work like that

Don't criticise CEO Morrow for keeping the build moving

NBN

Stop me if you've heard this one: nbn™, builder and operator of Australia's national broadband network (NBN), is being accused of polishing its rollout figures by fast-tracking areas that are easy to service.

The news emerged out of a hearing at the Senate Environment and Communications Committee last Friday (the transcript hasn't been completed yet, but masochists can view the video here; nbn™ CEO Bill Morrow's evidence starts at 14:41:00).

Morrow's evidence to the committee regarding build decisions starts around 15:20:00. It relates to how nbn™ plans to deal with “service class zero” premises (that is, the network is in their area, but there are technical problems that prevent some premises from connecting).

Morrow told the committee prioritising the speed of the rollout is one of the instructions nbn™ operates under (the other being prioritising under-serviced areas).

The result of that priority is a simple decision about resources: “If we can do 100 homes in a day, versus the same amount of resource for three or four, we're going to wait on the three or four, get the hundred in, and go back after we have these big swathes of homes that are connected.”

Morrow went so far as to agree with Tasmanian Senator Anne Urquhart that the hardest locations to reach, dubbed "service class zero premises", are going in a “too-hard basket” for now. “There are those that are so complex, they require a whole lot more construction resource.”

He also pointed out the obvious: that volume is a commercial imperative for both nbn™ and its retailers: the more premises are on board, the more money flows to both retailers and nbn™.

The only guarantee Morrow would give to the committee is that all of the service class zero premises will be ready-for-service by 2020 or maybe 2019.

All of which is straightforward and sensible, and is a strategy prime minister Malcolm Turnbull criticised from opposition.

Same as it ever was

Back before the 2013 election, as detailed by The Sydney Morning Herald's Peter Martin and Flynn Murphy in August 2013, one of the assumptions Turnbull made in his 36-page critique of the NBN (PDF here) was that the network-builder was keeping down the reported cost of fibre-to-the-premises (FTTP) connections by prioritising easy-to-connect households.

As Turnbull's paper stated, “the high costs of ‘non-standard’ premises within the fibre rollout area … or premises in the least economic parts of that zone are unlikely to figure prominently yet” in the $2,400 per-premises costs Quigley then claimed.

(The Register notes that nbn™ today reports a much higher per-home cost for FTTP connections. To understand why, readers should remember that after the 2013 change of government and restructure of nbn™ management, the allocation of capex to FTTP was refactored to include costs previously treated as opex, such as access to Telstra ducts.)

Prioritising easy premises also did for Quigley what it's doing for Morrow: enabled a faster connection rate than would otherwise have been possible.

This was important at the time, partly because Vulture South can easily imagine former senator Stephen Conroy's hot breath on the collective necks of the NBN Co board; and partly because there was a genuine need for Quigley to try to recover a rollout delayed by the hardball handover negotiations with Telstra.

So The Register isn't going to criticise Morrow for what is, after all, a defensible decision. He told the committee he's taking a “collective” position that with limited resources, it's better to connect houses as quickly as possible, even if individuals in the unfortunate position of being service class zero have to wait longer.

What does need work is the interface between nbn™, retailer, customer and government when there's trouble. Too often, a householder discovers they're service class zero when they've ordered a retail service and already been disconnected from Telstra or whatever other carrier provided their service.

The same goes for customers who are connected, but suffering poor service: what Morrow described as a "long chain" – between customer, retailer, infrastructure, nbn™ and ultimately the TIO – needs, we would argue, a single point of contact for resolution.

Right now, nobody has the capacity to force nbn™ and the retailer into the same room in front of a customer, something minister Mitch Fifield offered no clear roadmap to overcome.

It's imperative that customers can get a clear indication that they can be connected before they reach that point.

It was always going to be this way, whichever technology was used. Mike Quigley may be permitted a wry smile at this point. ®

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