QUENTIN DEMPSTER. Positions vacant: NBN Co’s ‘death seat’.

Apr 9, 2018

After Mike Quigley and Bill Morrow, who’s next for NBN Co’s CEO ‘death seat’? 

It can be called an executive death seat because the NBN’s business plan to start recouping the cost of the Turnbull government’s mis handled $49billion multi-technology mix (MTM) rollout has been shredded. 

Last year, as appalling NBN-delivered internet performance provoked record complaints from bitter and resentful new users, NBN was forced to lower its wholesale charges so retailers could at least get internet speeds closer to what they had been claiming in their discounted customer sales pitches.

But this has come at a cost. Even though outgoing CEO Bill Morrow proudly proclaimed revenues had been trending to $2billion a year, break even, let alone profitability, is now a much longer way off. Profitability may even be a mirage. 

Now competing technologies like 4G and 5G, starting late next year, are likely to woo many city users away from the NBN completely with an affordable alternative.

And with an Australian Competition and Consumer Commission recommendation to break up the NBN into three entities for later privatisation, there will be no sale of anything unless the entities are cash flow profitable, with manageable debt levels.

Industry insiders have told The New Daily that while the NBN user experience is improving, particularly with the ACCC now constantly monitoring advertised internet speeds and customer satisfaction, the Turnbull government has been able to buy some political breathing space.

But this week’s decision by NBN CEO Bill Morrow to pull the pin two years’ early and force his board into a world wide search for a replacement, has again destabilised Australia’s biggest ever technology infrastructure project. 

Did Mr Morrow jump, or was he pushed? The timing of his departure at the end of this year indicates he has decided to jump. Both NBN board chairman Dr Ziggy Switkowski and Prime Minister Malcolm Turnbull praised Mr Morrow’s efforts and wished him well for his next adventure. But if things were going so swimmingly, why would a CEO quit before the job was done and the business plan delivered?

Last year the government had to underwrite a $19.5billion line of credit to NBN to help it complete the current rollout. Then when NBN was forced to lower its wholesale price at the probable insistence of the government confronting a consumer revolt, Mr Morrow’s job became one he did not sign up for.

 This has led to growing concern that NBN indebtedness with the likelihood of a massive taxpayer haircut or bailout will now become a major issue at the next federal election. 

Shadow communications minister Michelle Rowland told The New Daily: “There is no strategic direction on pricing beyond 2018 and the financials underpinning the business plan out to 2040 do not set aside any budget for future upgrades to the copper network”. Ms Rowland and the Bill Shorten Labor frontbench will have to confront an NBN policy conundrum soon: commit to another $30billion for full fibre upgrade in future years. But it seems more likely Labor, risk-averse, will be non-committal, perhaps offering only an inquiry into current problems.

Australian Communications Consumer Action Network CEO Teresa Corbin told The New Daily a regulated wholesale service standard was needed to secure internet affordability for low-income Australians and reliability for all consumers.

When he was Communications Minister Malcolm Turnbull personally oversaw the appointment of Bill Morrow as CEO after the change of government in 2013. Mr Morrow replaced Mike Quigley who a sometimes vicious Mr Turnbull had bagged as incompetent.

Only after his effective sacking did Mr Quigley deliver a spirited defence of his management under a then Rudd/Gillard Labor government plan to deliver a much more expensive fibre to the premises NBN with admittedly slower rollout. Mr Quigley asserted the consumer demand would be for gigabit per second internet speeds and not whether 25 or 50Mb/s was merely “sufficient”. Such capacity could only be delivered by fibre which was now the coming standard in New Zealand, Asia, and north America.

Last year former PM Kevin Rudd claimed in an ABC TV interview that the incoming Abbott government had been determined to undermine the fibre NBN at the insistence of media mogul Rupert Murdoch protecting his interests in Foxtel from disruption by cheaper video streaming services. This claim has been denied and dismissed as hyperbole.

So given the often vicious political and commercial context, harder to recover debt and the now changed business plan, who wants to take the death seat as CEO NBN? 

Over to you Dr Ziggy.

Quentin Dempster is contributing editor of The New Daily where this article was originally posted on Friday, April 6, 2018. 

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