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Tuesday, 17 December 2013 14:39

Switkowski says NBN guarantees have 'lost currency' Featured

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NBN Co chief executive Ziggy Switkowski has refused to table an unredacted version of last week's NBN Stragic review due to "confidentiality issues and ministerial advice," and says speed guarantees have "lost currency."

Switkowski has told the Senate Select Committee on the NBN, meeting in Sydney, that broadband speed guarantees made by the Coalition will not necessarily be honoured.

He has also refused to table an unredacted version of last week's NBN Strategic Review due to ‘confidentiality issues and ministerial advice’, despite a motion from Committee Member, former ALP Communications Minister Senator Stephen Conroy requesting that NBN Co table to the Committee an unredacted version of the review.

Under intense questioning from Conroy, Switkowski said: "I do not buy questions that demand us to guarantee anything. It's clear that after four years of NBN, guarantees have lost currency.

Conroy replied, “I understand the limitations of the technology you’ve chosen, and you’d be foolhardy to try and promise you can deliver on those speeds.”

Before the election the Coalition promised minimum speeds of 25 Mbps available to Australians by 2016, but Communications Minister Malcolm Turnbull sensationally broke that promise last week when he said the target would not be able to be achieved.

“One of the problems I have found in reviewing the past is there's been a too quick take-up of words like 'guarantee’. This is a Strategic Review,” said Dr Swtkowski. It outlines what a particular scenario may deliver and we're doing it with high confidence.

 If we were doing it perfectly mathematically we’d say that within a certain probability we can do the following. We haven’t done that because we needed to make this thing understandable. The mandate was to look at the business plan and deliver it against the terms of reference, which it's done. References to what other people may or may not have promised is outside the Review.”

Conroy immediately latched on to that ‘other people’ comment, saying the Prime Minister was not just anybody, and he had made the commitment. “Mr Abbott's the one whose guarantee I'm asking you to keep. But you're not prepared to commit to meet the Prime Minister of Australia's commitment to the Australian public before the election."

Switkowski would not be drawn, bur kept returning to the Strategic Review and what it was attempting to achieve.

"It will be transformed into a corporate plan and a budget. That is several months of work and, at that time, I firmly believe we have to go back and stress test all of the assumptions and challenge ourselves to do better," Dr Switkowski said.

“Don’t you think the former management did that?” asked Conroy.

“I’m not here to comment on the previous management,” said Switkowski. He has recently praised his predecessor Mike Quigley for having done a good job in difficult circumstances.

He also defended the Coalition’s piecemeal approach to building the NBN.  “We have modelled and concluded that it's economically more efficient to upgrade over time rather than attempt to build a future-proof network in a field where fast-changing technology is the norm," he said.

“Best practice internationally is to implement a rolling annual plan with a semi-annual review of annual network footprint and performance, changes in the technologies and being mindful of shifts in consumer needs. “What we will not do is come up with numbers that are excessively optimistic, which I assert has characterised previous forecasts.”

Conroy used the opportunity to repeatedly question Switkowski if the rollout was being slowed deliberately. He denied the suggestion. "We have inherited a somewhat dissatisfied group of partners who are dissatisfied with us, who have slowed deployments," Switkowski said at a press conference later.

"There's no change in the current strategy. We are rolling out fibre to the premises where we can. "We have a machine that is running at four or five thousand (homes) a week, which it was during Senator Conroy's time."

The Senate Committee also quizzed the consultancies involved in the Strategic Review: Boston Consulting Group, Deloitte and KordaMentha. It emerged they were paid a total of $8 million to complete the document.

Executive search company Egon Zehnder was also asked about the process of making senior appointments to NBN CO since Switkowski replaced Quigley – that questioning led to the revelation that 400 of the NBN Co’s 3000 staff are paid more than $200,000 a year.


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