Senate hearing questions NBN Co chief over implementation study

Lengthy discussion reveals committee concerns over National Broadband Network

A Senate select committee has questioned the provision of the McKinsey implementation study to the NBN Co prior to it being made public by communications minister, Senator Stephen Conroy.

The $25 million study was handed to the Department of Broadband, Communication and the Digital Economy in February of this year, and NBN Co chief executive officer Mike Quigley has admitted to being given the study.

"I wouldn't say it's going to be a best-seller," he told the Senate committee, but he said that he had read it.

When asked by Senators why the NBN Co already had the study, Quigley said the company had been heavily involved with the team during the course of the study.

"Our views as we debated issues no doubt were an input into that study," he said.

Computerworld Australia has already learned that the NBN Co began work on the design and technical aspects of the network in spite of the implementation study and viewed the report as a policy document for government consumption, not as a guide for its own efforts.

In an extensive discussion between Quigley and a Senate committee that over-extended the allocated time in the hearing schedule, the chief executive officer was asked about a number of topics relating to the NBN Co, its processes, the fibre-to-the-home (FttH) network and topics relating to both.

In the 86-minute discussion, questions ranged from wholesaling pricing agreements to the hiring of a government relations officer and the process behind choosing the five mainland trial sites for the network.

The discussion revealed, among a number of things, that Quigley wasn't aware of the state of negotiations between NBN Co and the three service providers who will offer the first NBN products to trial sites in Tasmania. While Quigley thought that a wholesale price had been agreed upon, iiNet chief regulatory officer Stephen Dalby told Computerworld Australia that a contract between the two parties had not been finalised.

Senator Ian McDonald, a member of the Senate committee, also revealed that NBN Co had not conducted enough consultation with the mainland trial sites before they were announced. McDonald, whose office is located in Townsville, said that while the town is pleased it had been chosen as a trial site, it would have preferred consultation prior to the announcement. The Queensland town is currently undertaking "massive mall reconstruction" in the CBD which would have benefited from from NBN fibre, rather than outside where the trial site is actually located.

Quigly said that each municipality was contacted prior to the announcement, but admitted they weren't consulted as to the location.

"It would have been nice to go to sites and asked 'where would you like us to go'," Quigly said. "But the whole exercise is aimed to pruning out the architecutre and the build methods."

Since the announcement, Quigley said he had personally visited two of the five mainland trial sites after the announcement, in Townsville and Brunswick in Melbourne. However, he said he didn't know about the concerns raised in Townsville.

"What I can tell you is the question of marginal seats had no bearing at all on the choice [of mainland trial sites]," he added. "It wasn't even a factor that I thought about. Engineering folks certainly wouldn't have thought about them."

Quigley stressed the mainland trial sites were still on schedule, with construction and consultation with service providers slated for completion this year.

However, the chief also made note to differentiate between the network's capabilities.

"There is a big difference between peak speeds and committed speeds," he said. "[There is] a big difference between what you can get close to an exchange or close to a cell tower, and what you can get at the edge of a cell, or a long way out from an exchange. We can guarantee committed speeds, and you can get them if you're close to the exchange or a long way away."

How NBN Co will roll out the optical fibre network to those sites around in Australia not included in the initial trial is yet to be ascertained. The company has begun evaluating construction companies for the build, but whether it can light up the dark fibre owned by Telstra isn't clear.

Quigley denied claims from the Senate hearing that NBN Co was a "gap-filler", but said that it wouldn't duplicate fibre roll-outs conducted by other companies.

"If in fact someone has built already a wholesale fibre-based product in a particular premise," he said. "It would be pretty silly of us to go and duplicate all of that.

"But I don't suspect that's likely to happen. I think the vast majority of premises are likely to be connected with NBN Co's network."

Some premises are already connected to a fibre network, such as Alamanda Estate in Victoria, which has access to a separate iiNet fibre network.

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