Black Hole Malcolm contractually bound to NBN wreckage

Advertisement

Via the AFR:

Prime Minister Malcolm Turnbull faces expensive embarrassment if NBN Co cannot rectify problems that have halted the rollout of the HFC network he championed, as the company confirmed taxpayers will be forced to pay to maintain it for Telstra to broadcast Foxtel, even if it is ditched from the NBN.

NBN chief executive Bill Morrow suddenly hit pause on the rollout of broadband delivered over pay television cables last week, due to mounting issues with service dropouts, delaying the roll out to an eventual 3 million metropolitan areas by an estimated six to nine months.

However, as Labor ups its campaign for NBN to drop HFC in favour of fibre to the curb technology, NBN confirmed to The Australian Financial Review that it is contractually bound to maintain the ailing network for as long as Telstra wants to keep using it for pay-TV transmission.

The problems with the HFC network are an unwelcome embarrassment to the Prime Minister as he faces ongoing speculation about his leadership of the Liberal Party.

In his time as opposition communications spokesman he regularly savaged the Labor government over its decision to pay Telstra and Optus to decommission HFC in favour of fibre, and quickly moved to renegotiate the multibillion-dollar contracts with the telcos to incorporate HFC when the Coalition won government.

While NBN and Communications Minister Mitch Fifield insist that the problems being experienced by HFC customers are not fatal for the rollout, sources close to the project told the Financial Review that there had been some attempts within NBN ranks to greatly diminish the use of the technology due to complications with the signals for some Foxtel channels interfering with NBN’s broadband.

Hoocoodanode that politically-motivated technology switches mid-stride in a $50bn nationwide infrastructure project would cause large scale failures?

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.