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Another week, another leak: is morale that low in Australia's NBN?

Even cost-saving good ideas are now being leaked

The company building Australia's National Broadband Network (NBN) is once again denying the veracity of a leaked document.

This time, the leak to Fairfax Media says nbnTM “quietly” trialled technology to make fibre-to-the-premises installations cheaper.

That information is, in itself, completely unsurprising. Looking for ways to reduce costs is what prudent managers should always do.

Former nbnTM CEO Mike Quigley has said in public that the company always expected fibre build costs would, on a per-premises basis, fall over time.

In the present case, the cost savings nbnTM was chasing seem to apply to the last couple of hundred yards. Miniaturisation more modern fibres could, it seems, eliminate the fibre distribution hubs (FDHs) that act as patch panels for 200-300 homes, and cut the cost of pulling fibre the last few hundred metres.

Given that any prudent manager would check out new technologies in such a large project, the leak gave communications minister Mitch Fifield a free kick in front of an open goal. He was able to tell Fairfax that nbnTM had already announced trials of new fibre technologies in its half-year results presentation, and that the government “has given NBN a mandate to find the fastest and most cost-effective way to complete the network”.

The company was able to point to the same presentation to reassert that its per-premises fibre build cost is still AU$4,419.

In your correspondent's experience, happy companies don't leak. So with leaks coming regularly from nbnTM, it looks likely that there's a significant faction within nbnTM that's not happy with the way things are going.

Whether the leaks reflect management-level dissatisfaction with nbnTM's upper-level executives, a genuine concern that the multi-technology model is failing, or the political convictions of the leakers, the leaks are happening.

Either morale is so low people are willing to risk their jobs, or the leakers don't believe there's sufficient management authority to shut them down.

There's also increasing unrest outside the company.

For example, Optus chair Paul O'Sullivan and the Competitive Carriers Coalition have argued that government's revised “multi-technology model” for the NBN has put incumbent Telstra in the box seat to wrap up customers before they transition to the NBN infrastructure.

The transfer of Telstra's copper to nbnTM, instead of just its customers, gives the carrier enormous power, something that competitors only weakly protested ahead of the 2013 election.

In a speech to the Trans-Tasman Business Circle, O'Sullivan called for a complete structural separation of Telstra from its copper, so as to put its competitors on an even footing. He also wants rules in place that mean when customer connections transition to the NBN, they can change retailers without contract penalties.

The industry probably hopes that in an election year, it's got a chance to raise the NBN as a political issue – something that looks like a lost cause to Vulture South.

Regardless of the cost argument, it was clear in 2013 that the government's multi-technology model would protect much of Telstra's incumbency.

However, with the then-Labor government on the ropes and a change of government inevitable, telcos preferred to walk softly in the hope of getting a favourable reception from incoming communications minister and now-Prime Minister Malcolm Turnbull.

It took until well after the election – December 2013 – for the Competitive Carriers Coalition, to criticise the industry structure accompanying the multi-technology mix on competition grounds.

Since there remains a substantial rump of people who think the NBN eggs can be unscrambled, there will be chatter in this year's election campaign. If the leaks continue and cost overruns are confirmed, perhaps the NBN might even become an election issue, although education, healthcare, housing costs and the state of Australia's budget will likely grab more headlines. ®

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