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Former Telstra CEO regrets silence over NBN disaster

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Former Telstra CEO Andy Penn (Screenshot via YouTube)

Former Telstra CEO Andy Penn has expressed regret in not speaking out against the Coalition's bungling of the NBN. Paul Budde reports.

I DID FEEL a bit of vindication when I read in last week’s Weekend Australian the interview with outgoing Telstra CEO Andy Penn titled: ‘After the storm, Andy Penn ponders his legacy.’

A key point of regret was that he had not been more forthcoming with his criticism of the NBN as it developed during its reign. He admitted that he was at the helm of the company when many of the negative effects of the NBN became obvious to him.

Why do I feel a bit vindicated about it? Ever since the core concept of the NBN – providing the best possible broadband infrastructure to all of Australia at an affordable price – got undermined by political interference I started to indicate what the consequences of that policy shift would mean. Once you decided not to build the best possible network and you are allowing that good quality broadband to become unaffordable for most Australians, obviously, you have to ask yourself — why bother?

All of these elements were clear to me and I discussed that with many people in the industry including the then Minister for Communication, Malcolm Turnbull. I suggested to him not to abandon the principle of a fibre-to-the-home (FTTH) network for at least 94 per cent of all Australians. His argument was that we as a nation couldn’t afford that.

My suggestion was to keep the end goal in place, but make changes to the way how to get there. However, with a Prime Minister such as Tony Abbott at the helm, the national interest was replaced with political interest and there was no way for a compromise or for an open discussion on the topic. Reviews were stacked with those supporting the Government.

With the changes indicated by the Coalition Government back in 2013, it was clear that also the industry would suffer from these changes. The costs of the change projected by Malcolm Turnbull would see a solution of around $29 billion, instead of the $43 billion projected by the Labor Government.

It was obvious that this was impossible and that the costs would be much higher and this would have a direct effect on the way NBN would charge its wholesale customers. We now all know that the telcos are suffering from this policy, so it is obvious why Andy Penn does have some regrets here.

There was a handful of people who did speak out and we did receive quite a bit of criticism from some people in the press and were called together with a few others who held similar views — the fibre fanatics.

At that time, influential industry people such as Andy Penn kept quiet. While the industry as a whole had publicly supported the original national FTTH plan, there was a deafening silence from the key industry leaders. This allowed those supporting the political change to a second-rate NBN to be even more vocal in condemning the original national broadband plan based on FTTH.

It is only since very recently that Andy Penn became more vocal on the issue, perhaps because it was now politically safe to do so with the Coalition Government gone.

Those people in the press who supported the Coalition’s political line that FTTH was not needed and that that cheaper Multi-Technology Mix (MTM) was good enough for Australia, and who were vocal against those who thought differently, are now quiet. None of them is now still arguing for the MTM, so it is clear that their opinion at the time was more based on political conviction than on what would be the best for the country.

Already running up to the last election, it had become clear that the Coalition was backflipping on the issue. Both parties agreed to invest billions of dollars in the upgrade to FTTH. So, by default, we now do have some sort of bipartisan support on where the NBN should go from here.

There are lots of politically charged issues going forward. There are the extra costs of the NBN moving towards FTTH and the financial problems the NBN company is facing. The latter will require the Government to step in and last but not least, we need to move towards privatisation as what has become very clear is that you can’t get a government to run the NBN.

Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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