NBN a breeding ground for fat cats

When it comes to the age of entitlement, you would be hard pressed to beat NBN Co, which is packed flush with literally hundreds of employees paid exorbitant ‘fat cat’ salaries:

NBN Co chief executive officer, Stephen Rue receives the highest salary in the public sector, after earning more than $3 million in the 2019-20 financial year.

That’s nearly double the salary of the previous highest-paid public sector worker, and the second-highest public sector worker in the 2019-20 financial year…

Rue earned $1.86 million and a further $1.17 million in bonuses, totalling $3.15 million, according to NBN Co’s latest annual report.

Seven NBN executives in total earned more than $1 million over the last financial year.

To put that into perspective, Prime Minister Scott Morrison earned $549,299 last year…

Around 733 NBN staff earn between $200,000 and $300,000 per year, while 110 earn between $300,000 and $400,000. Thirty-four are earning above $400,000.

This is truly extraordinary stuff, with Labor senator Kimberley Kitching rightly naming NBN Co the new “millionaires’ factory”.

The big question here is why Stephen Rue and co. were paid bonuses on top of their already exorbitant salaries?

It’s not like the performance of the NBN has been anything to boast about. Speeds have often failed to meet advertised levels and complaints are through the roof.

What this highlights is the dark side of public-private partnerships. This is a system that funds the lifestyle of a privileged few. Benefits flow back and forth between those dispensing the government largesse and those receiving it.

For those operating within the loop life is golden, whereas everybody outside (i.e. taxpayers and end users) picks up the tab.

To be fair, this privileged lifestyle extends way beyond the NBN. The very same thing could be written about Australian Post or any other organisation fortunate to be recipients of government contractual arrangements. These include consultants, private security firms, employment agencies, construction firms, toll companies, the list goes on.

Whenever you have taxpayer funded contracts up for grabs you will inevitably get plenty of snouts in the trough and the Game of Mates will run rampant.

Unconventional Economist
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Comments

  1. my toranaMEMBER

    Was it the SBS board Michelle Law posted a photo of this year? Like the cast of Vikings, I think there was a Greek surname. I still laugh when I think of it.

  2. If it makes you feel any better, they’re laying off about 1000 right now.

    And the Telco industry is structurally in a fairly long term decline. With margins low, the NBN done, and automation taking much of the backoffice, there’s little room to move except to 5g rollouts.

    • darkasthunderMEMBER

      You mean apart from re-doing the whole thing so it’s FTTP, like it should have been in the first place?

      • Heh. Yeah,.TBF most of the company was against that. Some more loudly than others. Can’t exactly tell your boss that you’re not going to do it because of philosophical differences though – unless you’ve already got another job.

        Though there are exceptions to every rule, and fibre in some places would have been many many times more expensive than something between full fibre and wireless. I’m mostly thinking regional towns though where wireless is less desirable, and fibre is an arm and a leg.

        One thing that was sensible about Turnbull’s mess was FTTB. It’s an asstonne of work to fibre up old buildings with <50m copper runs. Many, many, many times more expensive than plonking down a box and wiring it into the existing MDF. I saw some designs for CBD buildings and with all the work/equipment required prior to FTTB they were hard to imagine they'd pay off the installation cost in a lifetime.

        FTTC isn't terrible, and I think that was the compromise the company's leadership at the time were able to pull off. It does cut out a fair whack of the fiddly bullshit work in someone's private home – but more importantly, it's a straightforward upgrade to go into the home when the time comes. So it wasn't a bad idea.

        FTTN with the exception of the above wireless vs arm-and-leg fibre example, is pretty much universally shit.

        The bigger issue though was that the change in tech cost a fortune in system changes. I heard something like 2bn, and even then it was still pretty shit. CBA rewrote their entire banking system ground up for less than that.

        For the most part though, the grunts put up with constant pressure, constant org shuffles, new systems that barely worked, tools that were sub-par and seemed to get worse, leadership that was haphazard and aside from being good bullshit artist pep-talkers, really didn't give too much of a fuck, very little recognition, practically no extras aside from free coffee and the biannual leadership masturbatorium which had less catering/tab as time went on – one tab ran out in 20 minutes. Oh, and the constant pressure of the reality that constant reorgs= sacking, and that eventually success would mean most of you will be sacked like last week's newspaper.

      • Heh. Yeah,.TBF most of the company was against that. Some more loudly than others. Can’t exactly tell your boss that you’re not going to do it because of philosophical differences though – unless you’ve already got another job.

        Though there are exceptions to every rule, and fibre in some places would have been many many times more expensive than something between full fibre and wireless. I’m mostly thinking regional towns though where wireless is less desirable, and fibre is an arm and a leg.

        One thing that was sensible about Turnbull’s mess was FTTB. It’s an asstonne of work to fibre up old buildings with <50m copper runs. Many, many, many times more expensive than plonking down a box and wiring it into the existing MDF. I saw some designs for CBD buildings and with all the work/equipment required prior to FTTB they were hard to imagine they'd pay off the installation cost in a lifetime.

        FTTC isn't terrible, and I think that was the compromise the company's leadership at the time were able to pull off. It does cut out a fair whack of the fiddly bullcrap work in someone's private home – but more importantly, it's a straightforward upgrade to go into the home when the time comes. So it wasn't a bad idea.

        FTTN with the exception of the above wireless vs arm-and-leg fibre example, is pretty much universally crap.

        The bigger issue though was that the change in tech cost a fortune in system changes. I heard something like 2bn, and even then it was still pretty crap. CBA rewrote their entire banking system ground up for less than that.

        For the most part though, the grunts put up with constant pressure, constant org shuffles, new systems that barely worked, tools that were sub-par and seemed to get worse, leadership that was haphazard and aside from being good bullcrap artist pep-talkers, really didn't give too much of a crap, very little recognition, practically no extras aside from free coffee and the biannual leadership masturbatorium which had less catering/tab as time went on – one tab ran out in 20 minutes. Oh, and the constant pressure of the reality that constant reorgs= sacking, and that eventually success would mean most of you will be sacked like last week's newspaper.

  3. It’s pretty handy when you don’t have shareholders to answer to. Just convince a committee of clueless bureaucrats that you’re worth the money and away you go.

    Burn it down.

  4. It’s not like the performance of the NBN has been anything to boast about. Speeds have often failed to meet advertised levels and complaints are through the roof.

    This is the fundamental problem with the NBN model. The ISP’s dont pay the NBN for each connection, they pay for a combined feed, meaning they are open to utilisation congestion in the connection between themselves and the NBN itself. So you may have an NBN connection that can carry a 1 Gigabit throughput but because your ISP of choice did not buy enough capacity on their link it drops down radically even to the sub megabit as when you approach high utilisation levels congestion kicks in and systems start repeating requests for data…. over and over again…

    Actual throughput drops down to unacceptable levels while the ISP just blames the NBN…. Really convenient for carriers who are trying to sell a competing wireless product..

    People insisted the NBN was a non government entity and available for sale once built…. Excessive executive pay scales and bonuses are what you get when you go that path….

    • Oversubscription isn’t an error in the Telco/ISP business model, it is the business model.

      Should have been FTTC with users paying the last hop to connect if desired or Fibre to the Pole with NBN owned short range wireless transmitters servicing residents based in device/IP. You could then travel around any suburb and be connected to the NBN with mobile, tablet or laptop. Could have also powered smart traffic, IOT etc. Leave the mobile network for those that actually need it.

      FTTP was a stupid idea from day one because as soon as it goes the premise, the public pays for the connection but the use benefits are privatized by the house hold.

      • In general its not an invalid model,. It would be insane to provision a full 100Mbits per customer when they will average less than 10Mbits. But the problem in the NBN model is they are effectively rewarded for way under subscribing their service through being able to blame the NBN and use it to justify pushing a “better” service like 5G.

  5. Just curious does anyone know if FTTC where the finer comes to the pit just outside your fence is actually capable of greater than 100mbits if you are not shaped to that limit by the ISP? I can get flat out 95mbits on my 100mbit plan. I don’t need more than that but I’m curious if it’s possible.

    • If its Fibre then its theoretically capable of Terrabits/s but the reality may be only Gigabits… When you shaped to 100Mbits you will never receive a full 100Mbits as there are buffers and latency issues that will always see you fall below that figure. The correct methodology is to use shaping that averages 100Mbits but even that will likely still see below 100Mbits.

      if your getting 95Mbits out of your 100Mbits subscription your doing extremely well.