The NBN board has run away. Why?

The NBN board has run away. Why?

The resignation of the entire board of NBN Co has brought into sharp focus my membership of the NBN Peanut Gallery. Perhaps it is time to move on, to acknowledge the Coalition’s mandate and Get A Life.

But, no – I have decided to stay on; my country needs me. Ziggy Switkowski, on the other hand, needs to think twice.

The current chair, Siobhan McKenna and her five colleagues, will no doubt be unable to get out of the place quick enough. Each will be hoping not to be the one whom the new minister and shareholder, Malcolm Turnbull, asks to stay on to assist with the transition.

Meanwhile it is persuasively suggested that the minister has prevailed upon the former chief executive of Telstra, chair of Opera Australia and examiner of the Essendon Football Club to be executive chairman of NBN Co, which is another term for CEO.

It may be too late already, but Ziggy Switkowski needs to ask himself why the previous incumbents have all run away. It is not, I suggest, because the new shareholder is an unpleasant or unreasonable person, or because they are all members of the Society of Fibre Fanatics.

It is because there is a large problem at the heart of the Coalition’s NBN policy. The key difference to the project that has come with the change of shareholder is not that two-thirds of the connections will be copper instead of fibre, which will make it cheaper and a bit slower. It is that competition will be allowed.

The NBN will not be a monopoly, and to bring that point home, David Teoh’s TPG Telecom last week announced that it will connect fibre to capital city apartment buildings. The company already has 3,800 kilometres of fibre connecting businesses to the internet; now it’s planning to move into high-density residential, which is the most profitable.

Telstra is also going to be allowed to operate its hybrid fibre-coaxial cable in competition with the NBN as well, covering the rest of the most profitable bits of the capital cities.

The NBN was, at heart, apart from being Stephen Conroy’s Monument, a mechanism for city broadband users to subsidise regional areas. All Australians would be connected to fibre, fixed wireless or satellite and all would pay the same, no matter what the cost of connecting them.

To drive that point home the NBN rollout began in rural Tasmania, the least profitable place to begin.

For that principle to work it requires there to be no alternative in the city, where prices could, and arguably should, be lower.

Yet under the heading of Competition, the Coalition’s broadband policy says this: “Competitive and free markets have driven innovation and cost reductions in telecommunications since the early 1990s. The Coalition will remove or waive impediments to infrastructure competition introduced to provide a monopoly to Labor’s NBN …”

Unhappily the policy leaves it at “will”, and does not employ the “will investigate…” of the cautious policy statement. This is in keeping with other incautious Coalition policies (“we will stop the boats, scrap the tax” etc).

If David Teoh is allowed to have the apartment buildings in the cities, then the Malcolm Turnbull/Ziggy Switkowski NBN will simply be an unprofitable competitor on price in the cities and an unprofitable, supplier of fibre to the node services to rural Australia.

It will, in short, be a donkey, a money sinkhole, a political noose, and an end-of-career nightmare for a mild-mannered nuclear physicist who might end up wishing he’d stayed at the opera.