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.)

Tuesday, July 02, 2013

Telcos and trust

It has been an interesting time in telco land recently.  It is impossible not to notice that telcos are rediscovering consumer trust as an important lever in delivering financial results.

One can see this in the extent to which customer service features in recent presentations. Improving customer satisfaction was the first of the four strategies listed by Telstra in its Investor Day presentation in October.

Optus' Kevin Russell titled his recent AICC adress Transforming Customer Experience.  In that speech he said " Standards of service in Australia relative to standards of service that I'd seen change in the UK, just seem to, in my view, have gone backwards."

Optus also released research  on Customer Service: Perceptions & Expectations. The research showed negative advocacy scores for the telco sector - that is assumed to be a measure similar to the Net Promoter Score.

Vodafone's Bill Morrow was more direct in comments reported by The AustralianHe said "2013 is all about trying to earn back trust.."  He added "Mr Morrow's presentation outlined a journey for Vodafone from "low trust" in 2011 to "most trusted" by the end of the year." 

All these comments came to mind when today I read an item from the UK about Sainsbury becoming an MVNO.  In part the report read:

Called Mobile by Sainsbury's, the service is due to launch this summer and aims to remove what it claims is the stress of choosing a suitable mobile tariff.

"Our customers trust us to provide top quality products and service at fair prices, and Mobile by Sainsbury's feels like a natural extension of our brand as well as a great way to reward our customers," said Luke Jensen, group development director at Sainsbury's, in a statement.

There is that word "trust" again. 

Students of marketing, and more specifically the real science of markets that is economics, know how important brand and trust are in the context of markets with assymetric information.

The strategy in the Sainsbury case is to try to take the brand value from retail to mobile, in a belief that the brand value can withstand the negative effect of the telcos.

The practical reality seems to be from telcos however that the negative effect of the mobile ecosystem will damage any brand.

There is an alternative route for telcos which is to reduce the extent of the information assymetry. 

(Technically I think there are three responses to the market for lemons. The first is to remove the information assymetry.  The second is to provide a warranty against the negative outcomes.  The third is building trust as a supplier.  Clearly both the first two can be used as part of building the third.)

One of the most important questions is whether this problem really can be solved by each telco alone or whether there is an over-arching issue that requires co-operation.  I touched on this in a TJA article in 2010.  I also addressed the issue of why competition doesn't necessarily result in improved customer service in a submission to the ACMA.

The signs are there that the three mobile network owners in Australia understand the dimension of the problem.  If they think the value in the response is only in a battle for market share then there will be no co-operative action.  But if they recognise that the outcome can be increasing the perceived value of their product there might be a different approach.

 

Monday, July 01, 2013

Ministers for Communications

The swearing in today of Anthony Albanese as Minister for Broadband, Communications and the Digital Economy saw some tweeting about the longevity of Senator Conroy and contrasting it with the churn in the portfolio in the Hawke Government.

So I thought I'd share my table of Ministers for Communication since Federation. 

As "postal, telegraphic and other like services" are a Federal responsibility under the constitution the Post-Master General was a portfolio from the very start.

The initial ministries (1.1.1901- 12.7.1915) were constituted of PM, Minister for External Affairs, Minister for Home Affairs, Treasurer, Minister for Trade and Customs, Minister for Defence, Postmaster-General, Vice-President of the Executive-Council, Minister (without portfolio).  The Minister with responsibility for posts and telegraphs is therefore one of six that could have a list of Ministers since Federation.
 
Anthony Albanese is not the first Deputy Prime Minister to be the communications minister.  Lance Barnard was both in the two man Whitlam ministry from 5 to 19 December 1972.  Lionel Bowen was Post-Master General under Whitlam and subsequently served as DPM under Hawke.
 
John McEwen was the first Minister to be commissioned as Deputy Prime Minister in the Gorton Ministry on 10.1.1968.  Previously it was used unofficially for the second highest ranking Minister. (but none of them were the Postmaster General).
 
The full list is:
 
Ministry
Dates
Minister
Dates
 
 
Postmaster-General
 
Barton Ministry (Protectionist)
1.1.1901 – 24.9.1903
Forrest, J
1.1.1901-17.1.1901
 
 
Drake, Senator JG
5.2.1901-10.8.1903
 
 
Fysh, PO
10.8.1903 -24.9.1903
Deakin Ministry (Protectionist)
24.9.1903 – 27.4.1904
Fysh, PO
24.9.1903 – 27.4.1904
Watson Ministry (ALP)
27.4.1904 – 17.8.1904
Mahon, H
27.4.1904 – 17.8.1904
Reid–McLean Ministry (Free Trade – Protectionist Coalition)
18.8.1904 – 5.7.1905
Smith, S (FT)
18.8.1904 – 5.7.1905
Deakin Ministry (Protectionist)
5.7.1905 – 13.11.1908
Chapman, A
5.7.1905-30.7.1907
 
 
Mauger, S
30.7.1907-13.11.1908
Fisher Ministry (ALP)
13.11.1908 – 2.6.1909
Thomas, J
13.11.1908 – 2.6.1909
Deakin Ministry (Protectionist – Free Trade – Tariff Reform Coalition)
2.6.1909 – 29.4.1910
Quick, J (PROT)
2.6.1909 – 29.4.1910
Fisher Ministry (ALP)
29.4.1910 – 24.6.1913
Thomas, J
29.4.1910-14.10.1911
 
 
Frazer, CE
14.10.1911-24.6.1913
Cook Ministry (LIB)
24.6.1913 – 17.9.1914
Wynne, A
24.6.1913 – 17.9.1914
Fisher Ministry (ALP)
17.9.1914 – 27.10.1915
Spence, WG
17.9.1914 – 27.10.1915
Hughes Ministry (ALP)
27.10.1915 – 14.11.1916
Webster, W
27.10.1915 – 14.11.1916
Hughes Ministry (National Labour)
14.11.1916 – 17.2.1917
Webster, W
14.11.1916 – 17.2.1917
Hughes Ministry (Nationalist)
17.2.1917 – 10.1.1918
Webster, W
17.2.1917 – 10.1.1918
Hughes Ministry (Nationalist)
10.1.1918 – 9.2.1923
Webster, W
10.1.1918-3.2.1920
 
 
Wise, GH
4.2.1920 – 21.12.1921
 
 
Poynton, A
21.12.1921 – 5.2.1923
Bruce–Page Ministry (Nationalist – CP Coalition)
9.2.1923 – 22.10.1929
Gibson, WG (CP)
9.2.1923 – 22.10.1929
Scullin Ministry (ALP)
22.10.1929 – 6.1.1932
Lyons, JA
22.10.1929 – 4.2.1931
 
 
Green, AE
4.2.1931-6.1.1932
Lyons Ministry (UAP)
6.1.1932 – 9.11.1934
Fenton, JE
6.1.1932-13.10.1932
 
 
Parkhill, RA
13.10.1932 – 12.10.1934
 
 
McLachlan, Senator AJ
12.10.1934 – 9.11.1934
Lyons Ministry (UAP–CP Coalition)
9.11.1934 – 7.11.1938
McLachlan, Senator AJ
9.11.1934 – 7.11.1938
Lyons Ministry (UAP–CP Coalition)
7.11.1938 – 7.4.1939
Cameron, AG (CP)
7.11.1938 – 7.4.1939
Page Ministry (CP–UAP Coalition)
7.4.1939 – 26.4.1939
Cameron, AG (CP)
7.4.1939 – 26.4.1939
Menzies Ministry (UAP)
26.4.1939 – 14.3.1940
Harrison, EJ
26.4.1939 – 14.3.1940
Menzies Ministry (UAP–CP Coalition)
14.3.1940 – 28.10.1940
Thorby, HVC (CP)
14.3.1940 – 28.10.1940
Menzies Ministry (UAP–CP Coalition)
28.10.1940 – 29.8.1941
McLeay, Senator G
28.10.1940-26.6.1941
 
 
Collins, TJ (CP)
26.6.1941-29.8.1941
Fadden Ministry (UAP–CP Coalition)
29.8.1941 – 7.10.1941
Collins, TJ (CP)
29.8.1941 – 7.10.1941
Curtin Ministry (ALP)
7.10.1941 – 21.9.1943
Ashley, Senator WP
7.10.1941 – 21.9.1943
Curtin Ministry (ALP)
21.9.1943 – 6.7.1945
Ashley, WP (SENATOR?)
21.9.1943 – 6.7.1945
Forde Ministry (ALP)
6.7.1945 – 13.7.1945
Cameron, Senator D
6.7.1945 – 13.7.1945
Chifley Ministry (ALP)
13.7.1945 – 1.11.1946
Cameron, Senator D
13.7.1945 – 1.11.1946
Chifley Ministry (ALP)
1.11.1946 – 19.12.1949
Cameron, Senator D
1.11.1946 – 19.12.1949
Menzies Ministry (LIB–CP Coalition)
19.12.1949 – 11.5.1951
Anthony, HL (CP)
19.12.1949 – 11.5.1951
Menzies Ministry (LIB–CP Coalition)
11.5.1951 – 11.1.1956
Anthony, HL (CP)
11.5.1951 – 11.1.1956
Menzies Ministry (LIB–CP Coalition)
11.1.1956 – 10.12.1958
Davidson, CW (CP)
11.1.1956 – 10.12.1958
Menzies Ministry (LIB–CP Coalition)
10.12.1958 – 18.12.1963
Davidson, CW (CP)
10.12.1958 – 18.12.1963
Menzies Ministry (LIB–CP Coalition)
18.12.1963 – 26.1.1966
Hulme, AS
18.12.1963 – 26.1.1966
Holt Ministry (LIB–CP Coalition)
26.1.1966 – 14.12.1966
Hulme, AS
26.1.1966 – 14.12.1966
Holt Ministry (LIB–CP Coalition)
14.12.1966 – 19.12.1967
Hulme, AS
14.12.1966 – 19.12.1967
McEwen Ministry (LIB–CP Coalition)
19.12.1967 – 10.1.1968
Hulme, AS
19.12.1967 – 10.1.1968
Gorton Ministry (LIB-CP Coalition)
10.1.1968 – 28.2.1968
Hulme, AS
10.1.1968 – 28.2.1968
Gorton Ministry (LIB–CP Coalition)
28.2.1968 – 12.11.1969
Hulme, AS
28.2.1968 – 12.11.1969
Gorton Ministry (LIB–CP Coalition)
12.11.1969 – 10.3.1971
Hulme, AS
12.11.1969 – 10.3.1971
McMahon Ministry (LIB–CP Coalition)
10.3.1971 – 5.12.1972
Hulme, AS
10.3.1971 – 5.12.1972
Whitlam Ministry (ALP)
5.12.1972 – 19.12.1972
Barnard, LH
5.12.1972 – 19.12.1972
Whitlam Ministry (ALP)
19.12.1972 – 12.6.1974
Bowen, LF
19.12.1972 – 12.6.1974
Whitlam Ministry (ALP)
12.6.1974 – 11.11.1975
Bishop, Senator R
12.6.1974 – 11.11.1975
Fraser Ministry (LIB–NCP Coalition)
11.11.1975 – 22.12.1975
Nixon, PJ (NCP)
11.11.1975 – 22.12.1975
 
 
Minister for Post and Telecommunications
 
Fraser Ministry (LIB–NCP Coalition)
22.12.1975 – 20.12.1977
Garland, RV
22.12.1975 – 6.2.1976
 
 
Robinson, EL
6.2.1976 - 20.12.1977
Fraser Ministry (LIB–NCP Coalition)
20.12.1977 – 3.11.1980
Staley, AA
20.12.1977 – 3.11.1980
 
 
Minister for Communications
 
Fraser Ministry (LIB–NCP Coalition)
3.11.1980 – 7.5.1982
Sinclair, IMcC (NCP)
3.11.1980 – 7.5.1982
Fraser Ministry (LIB–CP Coalition)
7.5.1982 – 11.3.1983
Brown, NA
7.5.1982 – 11.3.1983
Hawke Ministry (ALP)
11.3.1983 – 13.12.1984
Duffy, MJ
11.3.1983 – 13.12.1984
Hawke Ministry (ALP)
13.12.1984 – 24.7.1987
Duffy, MJ
13.12.1984 – 24.7.1987
 
 
Minister for Transport and Communications
 
Hawke Ministry (ALP)
24.7.1987 – 4.4.1990
Evans, Senator GJ
24.7.1987 – 2.9.1988
 
 
Willis, R
2.9.1988- 4.4.1990
Hawke Ministry (ALP)
4.4.1990 – 20.12.1991
Beazley, KC
4.4.1990 – 9.12.1991
 
 
Kerin, JC
9.12.1991- 20.12.1991
Keating Ministry (ALP)
20.12.1991 – 27.12.1991
Kerin, JC
20.12.1991 – 27.12.1991
Keating Ministry (ALP)
27.12.1991 – 24.3.1993
Richardson, Senator GF
27.12.1991 – 18.5.1992
 
 
Collins, Senator RL
27.5.1992 - 24.3.1993
Keating Ministry (ALP)
24.3.1993 – 11.3.1996
Collins, Senator RL
24.3.1993  - 23.12.1993
 
 
Minister for Communications
 
 
 
Lee, MJ
23.12.1993 – 30.1.1994
 
 
Minister for Communications and the Arts
 
 
 
Lee, MJ
30.1.1994 - 11.3.1996
Howard Ministry (LIB–NPA Coalition)
11.3.1996 – 21.10.1998
Alston, Senator RKR
11.3.1996 - 9.10.1997
 
 
Minister for Communications, the Information Economy and the Arts
 
 
 
Alston, Senator RKR
9.10.1997 - 21.10.1998
 
 
Minister for Communications, Information Technology and the Arts
 
Howard Ministry (LIB–NPA Coalition)
21.10.1998 – 26.11.2001
Alston, Senator RKR
21.10.1998 – 26.11.2001
Howard Ministry (LIB - NPA* Coalition)
26.11.2001 - 26.10.2004
Alston, Senator RKR
26.11.2001  - 7.10.2003
 
 
Williams, DR
7.10.2003 - 18.7.2004
 
 
Coonan, Senator HL
18.7.2004 - 26.10.2004
Howard Ministry (LIB-NP Coalition)
26.10.2004 - 3.12.2007
Coonan, Senator HL
26.10.2004 - 3.12.2007
 
 
Minister for Broadband, Communications and the Digital Economy
 
Rudd Ministry (Labor)
3.12.07 – 24.06.10
Conroy, Senator SM
3.12.07 – 24.06.10
Gillard Ministry (Labor)
24.06.10 – 28.06.10
Conroy, Senator SM
24.06.10 – 28.06.10
Gillard Ministry (Labor)
28.06.10 – 14.9.2010
Conroy, Senator SM
28.06.10 – 14.9.2010
Gillard Ministry (Labor)
14.9.2010 – 28.06.13
Conroy, Senator SM
14.9.2010 – 28.06.13
Rudd Ministry (Labor)
28.06.13 – 1.07.13
Conroy, Senator SM
28.06.13 – 1.07.13
Rudd Ministry (Labor)
1.07.13 -
Albanese, AN  (Deputy Prime Minister)
1.07.13
 
There are a few additional quirks as follows:
  1. Minister for the Media 12.6.1974 – 11.11.1975 (check Administrative Orders for Responsibilities)
Minister for the Media
 
12.6.1974 to 6.6.1975
McClelland, Senator D
from 6.6.1975 to 11.11.1975
Cass, MH
  1. In 1982 the title seems to have undertaken a very minor change from “Communication” to “Communications”
  2. During the Hawke super-ministry of Transport and Communications there was a period with a junior Minister for Telecommunications
Minister for Telecommunications and Aviation Support
2.9.1988 – 28.3.1989
Punch, GF
 
 
6.4.1989 - 4.4.1990
Kelly, RJ
 
 
 
 
 
 
  1. During the Howard Ministry, Senator Ian Campbell was Parliamentary Secretary to the Minister for Communications, Information Technology and the Arts from 21.10.1998 - 26.11.2001, (I had recollection that Chris Pyne did it later but it does’t appear in the APH list)
  2. During the Rudd Ministry from 1.07.13 there were in addition
                Senator Kate Lundy, Minister Assisting for the Digital Economy
                Sharon Bird, Minister for Regional Communications
                Ed Husic, Parliamentary Secretary for Broadband