NBN Co, tasked with building the National Broadband Network (NBN), yesterday released its 2014 Annual Report, showing a three-fold increase in activated premises (210,000 up from 70,000) and a doubling of serviceable premises (from 227,000 to 552,000).
These simplistic performance indicators show that the roll-out has accelerated but is well behind the schedule proposed in the 2012 Corporate Plan.
There are several troubling aspects in these numbers. 2014 was supposed to be the year when the number of premises passed would nearly triple to 1.68 million, and the number of active connections would jump from 92,000 to 551,000.
This was, in other words, to be the year when connection works moved from experimental deployment to full-scale roll-out.
NBN Co’s Chief Executive Bill Morrow conceded in yesterday’s briefing that making the connection at a customer’s premises is taking far longer than scheduled. The other factor at play is that the change of tack from Labor’s fibre-to-the-premises (FTTP) plan to a mixed technology solution, which involves running fibre to cabinets (nodes) in the street and copper from nodes to houses, clearly caused major project delays while NBN Co had to stop work and start largely from scratch.
On the other hand, the transit network – high capacity links between the 121 points of interconnect, the connection points that allow retail service providers and wholesale service providers to connect to NBN Co access capability – is ahead of schedule with 115 of points of interconnect connected. The 2012 Corporate plan shows that this network was due for completion in 2015.
The politics of connections
Under the previous government, the access network roll-out was reported by two measures:
- the number of premises passed
- the premises with active service
From an objective engineering project management perspective, these figures meaningfully reflect two different aspects of the network roll-out with different types of technical requirements. Getting a cable laid down a street is primarily a civil engineering matter, while connecting a premises is the role of the telecommunications technicians.
But the number of premises passed is not meaningful to potential customers in the street where cable is laid. The connection from the node to the house needs scheduling of different resources which could happen weeks, or even months, later.
More importantly, politicians who should know better can kick the figure around for political gain. This might make for combative politics, but it does not contribute to good policy.
NBN Co now reports the number of premises serviceable: a figure intended to represent the number of premises where there are no significant technical obstacles to the premises being connected, should the customer choose to do so.
If the NBN were still being rolled out as FTTP connections, the serviceable premises would clearly be significantly less than the premises passed. But because of the multi-technology mix approach now being adopted, the number of premises serviceable is now either inflated, or accelerated, by including other access technologies.
Committing to a certain number of connections per week during the preparation stages of network deployment has previously been observed to be “a meaningless exercise in micromanagement”.
In fact, it is only now that connection measurements start to become meaningful. This is not a vindication of the change in policies brought about by the change of government, but rather a recognition that the NBN, under whatever model, is now, hopefully, ready to roll.
Any fan of Network Ten’s television show Masterchef will know of the extensive preparation and experimentation that goes on before being able to push out meals at a rapid rate in a commercial kitchen.
Viewers of Nine Network’s The Block, on the other hand, might get the bizarre impression that a home is built one room at a time. Our political leaders would do well to realise that the Masterchef model is a far more accurate reflection of reality when it comes to the deployment of complex systems such as the NBN.
The verdict
After the disruptive change in direction for the NBN since the election, there are mixed messages in the 2014 Annual Report. Aside from the customer access network roll-out, much of the critical behind-the-scenes infrastructure is on track.
The customer access network is well behind schedule, exacerbated in the short term by a change in technology solution. Time will tell whether connections get back on track, let alone whether the multi-technology mix will meet consumer demand over the next 15 or so years.