Thursday, July 04, 2013

It is Wild West Week!

It is currently "Wild West Week" on Masterchef Australia. It seems this has inspired some others from WA to get in on the act.

iiNet regulatory boss Steve Dalby decided it was a good day to tell the management of NBN Co exactly what he thought of them....or at least to tell the AFR's David Ramli.

He is reported to have said;

If they don’t get their shit together, we will just happily go about our business and do our own thing.  NBN Co’s attitude is very dictatorial, it’s very public service and it’s very ‘take it or leave it’. It’s just surprising they have this attitude when you can actually leave it.

NBN Co needs us more than we need them and that is not portrayed in any way by their attitude. If nobody signs their [wholesale broadband agreement] and nobody agrees with their SAU and they have no success as a business then they’re f---ed.

He certainly bested former communications minister Stephen Conroy who had only dropped the f-bomb at the National Press Club in December 2011, and a "shit" when he realised he was late for Question Time at a press conference on the media reforms in March 2013.  Dalby apparently managed both in the one on the record interview.

Of course, most of this is bluster - the typical stuff of which all negotiations are made.  But it is also a bit delusional.  NBN Co just needs one service provider to call iiNet's bluff.  It will be a very hard "access strike" to pull off.  And as the figures on take-up provided to Senate Estimates in May show take-up is faster in the areas being switched on now.  Not marketing to these customers doesn't sound like a good idea.

The other question is exactly what iiNet means by "do their own thing".  Apart from the access networks they bought with Transact iiNet has never done its own thing - it has used Telstra's copper lines. 

There is a rule in the strategy business that if you want to make a threat - make it a credible one.

There were plenty of other ways for iiNet to make its pre-emptive strike about a document to be released by the ACCC that day (and it now has been).

Maybe Steve was just competing with his boss in a "most outrageous claim of the week" competition. 

In a piece in the AFR that deserves a blog post all of its own, Malone was said to have called for [new Minister] Mr Albanese to allow NBN Co to run fibre optic cabling to the basement of apartment buildings instead of connecting every single unit – a move the Coalition has already pledged to do if it wins power. “That’s a change they can make literally overnight and it would mean you could commit to putting 15-to-20 per cent of Australians onto the NBN next year,” he apparently said.

Given that NBN Co will complete the rollout to 12 million premises by 2021, and that it is in 2013 at 200,000 it is already planning to do about 12.5% per year. 

Some 30% of premises are MDUs, but they are not all in clusters so you still have to do most of the fibre rollout work for the whole area in which the MDU sits.  And even if you decide only to roll the fibre to the MDUs, you still need to do the full design work for the whole area in which the MDU sits.

But also the average size of MDUs is eight units.  As outlined at the JCNBN the issue is that once you realise that the project savings aren't that great.  And if we don't take fibre to the unit now...when do we?  The argument of "let them use copper" is a bit like arguing that all the workmen's cottages (now called terrace houses) built in the 19th century should never have been connected to electricity - after all they had gas, and no internal wiring.

Telco policy discussion has never been renowned for consistency or logic of argument.  Once upon a time though the journalist involved might have thought to challenge the comment - not merely repeat it because it suited the masthead's editorial line. 

(That said - Steve is just as right to push the interests of his company as NBN Co is in acting in the interests of its shareholders (us), Mike is right to suggest the company should always be pushed by the shareholders to get the best outcome, and David is right to want to get column inches under his byline.  But unfortunately all of this doesn't result in considered policy analysis.)

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