Internode chief defends NBN startup costs
- 18 August, 2009 13:29
- Comments 24
Less than a week after it was revealed the CEO of the federal government’s NBN company will be paid nearly $2 million a year for the job, the managing director of ISP Internode Simon Hackett has said the appointment is good value for money.
Hackett believes the role of Mike Quigley, the CEO of the NBN project, is “critical to its success”.
This week Computerworld interviewed industry observers who expressed concerns that the project could turn into a $43 billion bureaucracy.
“I believe that a CEO being paid 0.3 per cent of the total project budget over eight years represents excellent value if the project succeeds,” Hackett said, adding if that is the price required to secure the best person for the job, so be it.
“I certainly don't want 'second best' overseeing the most important telecommunications project in Australian history!”
On the overall economics of the NBN project, Hackett again supported the cost if the outcome can be demonstrated.
“Compared to the obvious direct and (far more so) indirect benefits of the network over the next 50 years, the build price is cheap,” he said.
“I expect that build price to be returned at least tenfold over that period in improvements in overall Australian GDP, and in increases to national and international competitiveness.
“The lack of a gigabit capable national network doesn't seem important today, but in 10 years time, its absence will be choking Australian competitiveness in a major - and unassailable - manner.”
Hackett shares analyst Paul Budde’s sentiment that the project needs to be funded entirely by the federal government in the first instance – not as a private-public partnership – and privatised later once it’s up and running.
“Like the national road system, this new form of 'road' system needs to be built on the basis that its social and economic benefits are there for all Australians and not built with rapid commercial return on investment as the main driver,” he said. “All that will do is create toll roads for the minority and what we need is a public freeway system for everyone.”
Although it was originally considered by the government, Hackett believes awarding the NBN tender to an existing provider would compromise the one thing that is critical for the new network – independence from incumbent agendas and independence from a wholesale-retail conflict of interest.
“Independent ownership of the result is critical to it being a level playing field, wholesale only network that allows all retailers to build new services on a fair and equitable basis – that allows truly fair telco competition to flourish in Australia – for the first time.”
Hackett said if the NBN achieves its stated policy objectives in full, it stands to be “the most important and the most positive change” in the telecommunications landscape since the original deployment of nationally available telephone line services.
“The next generation applications that use high download - and more importantly, high upload - speeds will be able to rely on their customers being able to use them,” he said.
“Today, it’s a patchwork quilt – you can write an application that needs, say, 10 megabits of symmetric capacity to work, but most of your intended customers can't use it.”
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Comments
allan
Hackett would say all these "nice things" because he stands to cash in the most. The self interest almost makes you sick!
Anonymous
Interesting how Hackett was so against fibre to the node, which he would miss out on, and so keen on this new cash cow. $10,000 per household for faster internet. hmm.
Anonymous
Dear Allan I think you have it wrong it is Telstra that makes you sick
Anonymous
That's why he said it should be independently owned, even he knows he'd have to rort it for his companys self interest.
Glen
Simon Hackett is certainly right when he says that"awarding the NBN tender to an existing provider would compromise the one thing that is critical for the new network". With respect to his comments on the CEO -"excellent value if the project succeeds" and "if that is the price required to secure the best person for the job, so be it." - he is also right, PROVIDING that the RIGHT CEO has been recruited. I remember what was been said about the recently departed CEO of Telstra, paid substantially more than Mike Quigley is being paid - and as a shareholder in Telstra and a user of Telstra services I have reasons to regret that he was ever employed
scott_44
Thank you Simon! I agree 100%. The construction of the NBN is this century's public service project - as the electrical grid was last century's.
Only the government can properly handle a project of this magnitude and ensure that it is developed for the public good. Keep private industry out!
scott_44
Thank you Simon! I agree 100%. The construction of the NBN is this century's public service project - as the electrical grid was last century's.
Only the government can properly handle a project of this magnitude and ensure that it is developed for the public good. Keep private industry out!
allan
Mr Eggman is getting $46,000 per day you pillocks! All you Hacketpool fanbois can play with your tossles but is he really worth it?
gfrend
No, allan, Mike Quigley is not getting $46,000 per day. That would be an annual salary of $16.8 million, which sounds more like Sol territory. Maybe you are a T fanboi who has been told to spread FUD in a desperate attempt to discredit the NBN.
A salary of $1.8 million per year, which is about the going rate (Sol excepted) for this level of responsibility, comes back at $4930 per day. Maybe you should spend less time gazing at your tossle (not that I would know what that is, of course).
Budgie
As long as Quigley just gets on with it and delivers in quick time he will be worth it.
I just hope the Labor Govt doesn't decide to sell the NBN early (especially to Telstra!) to pay off the massive debts it is incurring.
Anonymous
Well, just remember it's not Labor that sold everything it was Liberal, both federal and state!
Anonymous
Like the Commonwealth bank?? And who basically eroded Telstra's value by giving licences to Vodafone and Optus, for what return in dollars to the public purse? - yep that most Liberal of PM's Paul Keating
David
Has anyone yet carried out an in-dept cost benefit of the $43bn spend. Don't just assume there is value there. For this kind of infastructure spend the benefits needs to be very clearly laid out. For the same spend we could replace much of Australians electricity generation with cleaner fuels. What's better?
Sol-Loverboi-not
David of course that's better - but that is never the point because there's no MONEY in it for the shysters looking for a $2 million salery. Same old tired blah-blah excuse for the old and blatent money grubbing fill-your-pockets-and-run scam. I am so sick of hearing CEOs dribble on about how you have to pay squillions to attract the top talent - what rubbish!! How many have actually, really and truely done this?
Top talent is attracted by the job and its challenges as well as salery of course - the job comes first - a ludirous salery attracts the greedy con-artists.
All those yanks who fill up, wreck a company and then leave laughing - hello? wake up Australia!
Think long Term,
Simon is spot on with his comments, do you think the guys laying copper cable 50 years ago had any idea we would be accessing the internet 20Gb per second, NO!! The Internet was not thought of back then. Please people stop being short sighted this is a project with social benefits that will not be realised for years to come, I would go as far to say this is the most positive decsion made by a government in decades. Oh and 2 Mil so what he is well worth it!!
Anonymous
Hurry up and give us rural people in Tasmania Fibre Optics, sick of satellite service. Speed speed speed for us thanks.
hank ronson
and this is why internode is a power house cause the running it has brains well done simon
Load of Bollocks
Is this brown nosing i see from mr Hackett?
pagan1
He may be the right man for the job but to me that kind of money is obscene and i am sure he is not the only person or persons that could do the job...
Cynicsrule
Lets see...in 5 years time we will find that the CEO will have been proudly brought in from overseas - there will be nothing happening, many excuses, loads of spin, blame and obfuscation. She/he will leave and take a tidy package with them (and possibly be spotted wearing a strange, wide brimmed hat to boot...)
Wake up IT world - yes, this is the most important thing to happen in over 100 years of our infrastructure history - but just because you all desperately want it don't blind yourself to the realities of the political/self interest process.
Anonymous
Might want to double check your math there matey
Tom
I'd love to see your cost-benefit analysis of the original rollout of electricity. It was horiffically expensive, with the end result having huge and un-forseen benefits.
If we get half the use out of this fibre network we did the copper network, it's done it's job!
DC
The NBN is not equivalent to the roll out of electricity (which took decades by the way). it is not equivalent as claimed by conroy to the snowies.
It is 43Billion dollars spent on technology that will either be outdated or very close to outdated by the time it is installed. The only people pushing the NBN are either going to profit from it or don't really understand the technology.
Yes we need to improve the system. most importantly YES we need to give our country cousins better service. but at least for the metropolitan areas let the market decide what it needs.
Australia can't afford Conroy. Just think of his other legislation the internet filter, if you want to know whether he is operating logically and in the communities best interest. For you wowsers out there that think the filter is a good thing you really need to understand it is just a placebo. It keeps the ignorant (you?) happy. it doesn't solve a single issue.
DC
Anonymous
DC I don't think you understand the technology yourself. Fibre will not outdate like copper does and is much more scalable than anything else available. So it will not outdate by the time its installed like you say it will.
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