The sky is the limit for this latest NBN debacle

As Kevin Rudd’s high-tech loveboat, the SS ( Sorry Ship) NBN Co., heads towards the rocks it has sent out what amounts to an international SOS to avert yet another fiasco of its own making.

The disaster-prone National Broadband Network has appealed to Russia to help it avoid a major crisis in the delivery of its $2 billion satellite service to remote Australia. But the Russians have made it clear that any face-saving solution will come at a price — at least $100 million to begin with, according to informed industry sources.

NBN Co. is seeking to acquire a convenient orbital position for its service, but under United Nations protocols it must first gain the consent of any country with an adjacent slot. And it doesn’t matter whether the country is operating a satellite in that orbit or not. The UN reqires all players to coordinate their frequencies so that there is no disruption to existing services. Any new entrant must ensure that its services do not disrupt anyone else’s.

Industry insiders say that recent talks in Geneva did not go well, presumably once the Russians realised they had NBN Co. over a barrel. Those same sources say the final compensation demand may be well in excess of $100 million.

If negotiations with the Russians break down NBN Co must turn to China, which has the next most adjacent existing slot. But the Chinese are regarded in the industry as much harder bargainers than the Russians.

US satellite company Protostar learned this the hard way in 2008, when it sought to acquire a Singapore-held slot to deliver an Asian-Pacific service. China objected and the deal fell through with considerable financial loss to the company.

While Prime Minister Kevin Rudd claims to be well polished in Chinese diplomacy he managed to get off-side with China more than once during his earlier prime ministership. For a start, he objected to sitting next to the Chinese Ambassador to Britain, Madam Fu Ying, at a 2009 TV panel discussion in the UK during the G20 meeting. He also was widely reported to have claimed that Australia had been rat-f@#$%& by the Chinese at his cherished global conference on climate change in Copenhagan later that same year.

More recently, Labor, under the leadership of Julia Gillard, banned Chinese technology giant Huawei from participating in the NBN rollout on the grounds of national security.

NBN Co. landed in this predicament because it failed to go through the arduous negotiation process necessary to gain approval from the United Nations’ space agency before placing a $2 billion-plus order for two satellites and the rockets to launch them.  That UN body, the International Telecommunications Union, coordinates the shared global use of satellite spectrum.

But the root cause of the problem goes back to the making of policy on the run (or, more correctly, policy on the fly) as dreamed up by Prime Minister Kevin Rudd and his then-mate, Communications Minister Stephen Conroy. Remember, their broadband vision and the NBN was conceived on a serviette as the duo zipped by plane along the eastern seaboard.

From the start Conroy was adamant that NBN Co. should have its own satellites built. After all, the superfast broadband scheme was designed to create a Labor Government-constructed and -owned national communications grid to replace Telstra’s copper network. So why stop at anything less than 100%.

Brushing aside concerns about lack of experience by NBN Co. and the possiility of cost blowouts, Conroy had his way despite repeated warnings from the satellite industry that this approach was fraught with danger.

Earlier this year Mike Quigley, the CEO of NBN Co, who is now departing, said the organisation was on track to have its orbital slots in place before the satellite launches, scheduled for 2015. He said the “risk at launch” was greater than whether or not NBN would get the necessary slots.

Rudd has enthusiastically supported the NBN rollout, which began in 2009, arguing that it has the potential to help Australians address many of the key challenges of the future, such as the need to lower greehouses gas emisions, deal with the consequences of an ageing population, even reduce the trend towards increased levels of congestion in our major cities by promoting tele-commuting and reducing the need for face-to-face meetings. He has incorporated this image in his election repertoire, but has conveniently brushed away its many warts.

This magic carpet ride over the Government’s broadband super highway ignored the fact that many of these communications advances were already happening as a result of private-sector technology developments, particularly with smarphones and other wireless platforms.

As with other of his grand initiatives, Rudd said this project could only be achieved through national leadership. “History has taught us the need for national leadership on major nation-building infrastructures and that is why the government is delivering the NBN,” he said soon after its launch in 2009.

What Rudd failed to master was that history governments invariably stuff things up when they second-guess the paths technological developments will take.

Under the Rudd/Conroy back-of-the-napkin plan, 93% of Australians will be serviced by cable, with the remaining 7%, some 200,000 consumers, getting their government broadband by satellite.

Should this scheme come to fruition one of the beneficeries will be the asylum-seeking population on Christmas Island, which will fall under the NBN satellite footprint, along other Australian external territories such as with Lord Howe, Norfolk and the Cocos islands.

Anyway, as the NBN dream lurches from one nightmare to another there is a growing belief in the communications industry that it has undercooked the satellite component of its rollout strategy, particularly with the rapid growth of wireless services, and that it will have to crank up this capacity in the run-up to the scheduled 2015 launch.

Meanwhile Kacomm, a local company which has been allocated two convenient orbital slots capable of servicing Australia’s needs, was passed over by NBN Co. It is now negotiating a joint venture with Indonesia which would use those slots to deliver a government-owned broadband service across the Indonesian archipelago.The inescapable conclusion is that NBN Co. wants to be seen to be doing everything, reflecting its imagined role as a world technology leader. How very Ruddesque!

It would surely be the ultimate irony if Indonesia, with a little help from the Australian private sector, gets its superfast broadband up and running while we continue to flounder in a sea of incompetence.

Veteran journalist Malcolm Colless is a keen media watcher and regular contributor to Quadrant Online