"reflective of a lazy regulatory attitude" AAPT and NBN Co

I am generally an NBN fan. I am a fan of the concept of an FTTN network, I am a fan of the structural separation it delivers and I am a fan of the idea of a Government enterprise delivering it.

There is no real foundation for the perception that Government enterprises are less efficient and effective than private sector ones. A colleague has kindly recently made some observations on submissions to the Domestic Transmission Capacity service FAD.

The first by private sector firm AAPT. The colleague described it as "a whole new level of pathetic" and said that the submissions in general were "reflective of a lazy regulatory attitude."

The second is by NBN Co. This is neatly described as "a metaphor for the entire organisation...5 pages with nothing on it, then 2.5 pages with very little of any substance on it...8 pages that could be condensed into 1 page." and adds "Wasting paper, wasting money..."

I do note however the reassuring words from NBN Co on the second page of their submission,

Environment
NBN Co asks that you consider the environment before printing this submission.

Going to my earlier comments about corporations losing the plot on communications. If you want to save the environment come up with document templates that do so. The cover detail could be on the same page as the bit with the notice, it didn't need an intentionally blank page and it didn't need the superflous colourful back page.

There is a longer story to write about what creates this environment, but in brief, we have reached that stage in a regulated industry wherein the regulatory process is now no longer strategic.

The logical move is a massive restructure of regulatory institutions. The structural separation has been used to allow people to assume their problems are over. The reality is they have only just begun, but have very little to do with NBN prices and everything to do with bundling.

Novae Meridianae Demetae Dexter delenda est

HP and AAPT

Great Wall Street Journal report on the management issues behind the HP mess.

The pity is it reminds me of so many other companies - AAPT springs to mind.

PS Thanks to Josh Gans for tweeting the original.

Novae Meridianae Demetae Dexter delenda est

Fairfax

In today's Crikey Margaret Simons writes about the decision made at Fairfax to outsource some sub-editing.

In describing the task facing Fairfax's senior execs she writes;

The whole thing is bloody and awful, and while it is part of my job to criticise what Hywood and Matthews do, I also recognise that, despite their fat salaries, their jobs are far from enviable. God knows why people scrap so hard to be in these positions. One assumes it is because they believe they can pull gold out of the shit. I wish I shared their belief.

There are no easy answers to trying to save dying media business models, and they are right to do what their predecessors have failed to do -- admit the depth of the problem and try to do something about it.

She goes on to note that the new CEO has fronted-up to the idea that the classifieds business - the old "Rivers of Gold" - is basically dead.

There are a few observations to make. The first is that Fairfax had plenty of opportunity to act about on-line much earlier. In about 1994 when I was the Account Director for the media portfolio at Telstra the Fairfax CIO Frank McMahon asked us to talk to him about online services. (For the record Frank was responsible for the initial computerisation of the production process at Fairfax - no slouch).

He was particulary interested in what was called "On Australia" which was a Microsoft/Telstra JV. At that stage it was about Microsoft's non-internet based MSN - in the days when AOL and other dial-up subscription services were booming.

To the credit of the guys from telstra Multimedia who met Frank, they told him all about On Australia, but really recommended he have a look at a thing called Mosaic - which was the first web-browser.

In the end Fairfax took a decision to go with a "corporate" style on line service buying something that had a large base in libraries. This route was partly chosen because it could be achieved by acquisition.

The second is that the media are not alone in fronting what Clayton Chritensem dubbed The Innovator's Dilemma. This is the fact that to expolit the new business as it develops means sacrificing some of your revenues and profits from the old business. The example he used is the manufacture of hard disc drives.

Whenever in business you hear a CEO or exec team reject a strategy because it will "cannibalise our existing business" then you know you need to get out. Quite simply, if the existing business can be cannibalised then it will be cannibalised by someone else if not by you. It is closely related to a problem in business case development of what is the base case - the do nothing case - against which a strategy should be implemented. Too often it is a flat line or worse an extrapolation of historic growth when the reality is that the base case is declining revenue. As an example, AAPT was unable to develop a strategy for VoIP in conjunction with broadband because of how healthy the voice resale margins were.

The important thing to remember though is that CEOs are ultimately paid the big bucks to make the hard decisions. they should all sign-up to JFKs invocation "We choose to go to the moon, not because it is easy, but because it is hard".




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The prescient Brian Perkins and NBN tale

I had the pleasure of attending the ATUG Gala Awards Evening and Conference last week.

I happened to be talking to last year's Charles Todd Medal winner (The Hon Senator Stephen Conroy, Minister for DBCDE), when this year's winner (Macquarie Telecom's David Tudehope) came over to introduce a former winner, AAPT's Brian Perkins.

David rightly introduced Brian as a role model for all the entrants who came after him. But I was able to trump that by saying Brian was also prescient. In AAPT's move from one end of George St to another various documents were being disposed of, but the secretary to the CEO, Rosemary Robinson, knew I liked history and sent some my way.

Included in it was a memo from Brian to AAPT CEO Larry Williams dated 4 August 1993, in which he says he was asked at ATUG what his views were on the Government's plans to initiate a fibre-to-the-home project.

He notes that ATUG submitted to the the ROSA review that Telecom be separated into three companies, but that the Government had opted for accounting rather than structural separation. He writes;

ATUG should propose a stand-alone company whose responsibility is to provide and operate an efficient and cost-effective fibre distribution network which will meet the needs of Australian service suppliers and users into the 21st century.

(Note: The note also makes reference to the troubles AAPT had in getting its 1414 access code configured. Technically the 1991 Act did not require the provision of PSTN Ingress and Egress (as it was then known - hence the PIE model), in fact, the view in Telecom was that to provide it was illegal. This did not stop then Minister Grahame Richardson ringing then GM CCD Sales John Brennan (who had responsibility for AAP as an account) and saying that Telecom had to "fix it or it was your job". Brennan passed it up the chain.)

Novae Meridianae Demetae Dexter delenda est