Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Joint Standing Committee on the National Broadband Network
Rollout of the National Broadband Network

SMALLWOOD, Mr Robert, Digital Economy Strategy Manager, Mid West Development Commission


Evidence was taken via teleconference—

ACTING CHAIR: I now welcome via teleconference Mr Rob Smallwood from the Mid West Development Commission. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I invite you to make a brief opening statement. Then we will proceed to ask you some questions.

Mr Smallwood : The Mid West Development Commission is based in Geraldton, 420 kilometres north of Perth.

ACTING CHAIR: I know Geraldton well. It is nice to have you with us.

Mr Smallwood : For some background about the Mid West Development Commission, we are a Western Australian state statutory authority focused on the sustainable economic and social development of the Mid West region of Western Australia. Our region covers nearly 500,000 square kilometres and 17 local government areas. It has an annual gross regional product of approximately $6 billion. The population is around 50,000, with approximately 40,000 of those in Geraldton. The area is also home of the world-leading Square Kilometre Array radio telescope that I have heard discussed previously today.

A Mid West regional blueprint was completed in 2015. It was designed as the region's strategic economic roadmap, which, amongst other key focus areas, identifies digital infrastructure and connected communities as key pillars in unlocking the region's growth potential. Part of the regional blueprint is a digital development strategy which identifies and defines specific digital transformation projects for the region. As digital technology impacts virtually all of our blueprint pillars, our success right across the blueprint relies on the widespread availability and the adoption of world-class digital technology to enhance our global competitiveness, as well as to support a desirable quality of life in the region. So appropriate communications infrastructure to underpin growing our capacity, growing our population and increasing employment opportunities is absolutely essential to us.

To give you a bit about my background, I have spent more than 30 years in telecommunications and in IT, electronic media, renewable energy and academic research. I have worked in senior roles at Honeywell, Telstra and with some large Silicon Valley based internet data centre companies, as well as in academic research at the University of Washington in the USA. I came to Geraldton from Sydney in 2013 specifically to be involved with the rollout of the NBN FEEP and other Smart Cities related projects. I have been with the Mid West Development Commission since 2015.

For the benefit of the committee, as of June 2017, fibre-to-the-premises deployment throughout Geraldton is now complete. All the occupiable premises in the urbanised areas of Geraldton—that is, residential, business and government—now have NBN fibre. Several of the surrounding areas are connected to NBN fixed wireless, and a few smaller communities either have or will have fibre to the node. All the other communities throughout the majority of the mid-west will rely on Sky Muster, existing ADSL or some private fixed-wireless providers.

So, as a brief summary of fibre to the premises, from the information that is available to the commission, the NBN FEEP in Geraldton appears generally to be delivering what it was originally proposed to deliver, in 2012, when we began the journey with the NBN. Most premises are now already connected to the NBN FEEP services. I attempted to speak with the NBN this morning to get some actual numbers but wasn't able to get those in time. To our knowledge, NBN's infrastructure for FEEP is providing sufficient and reliable network capacity for current demand, including for high-speed services not only up to 100 megabits per second but even in a few cases, yes, 250 megabits per second. NBN's network is performing at or close to specifications, and, overall, NBN FEEP network reliability in Geraldton is very high and its performance has been excellent.

The majority of the performance issues that we hear about would appear to be primarily related to insufficient ISP backhaul capacity, insufficient ISP-purchased CVC capacity, or poorly performing or faulty customer premises equipment. In the FEEP network, the shortcomings in Geraldton appear to be generally not related to the inadequacies in the NBN network itself.

Having said that, there are challenges that remain. For example, customers struggle to understand how to isolate problems. Is the problem they're having due to the NBN network, the customer's wi-fi, a faulty cable, a power supply, their computer et cetera? The end users tend to blame the NBN for the problems, no matter who or what is actually responsible. Very importantly, the customers still have no means of clearly identifying which organisation is accountable when outcomes at a user's premises fall below expectations.

I'll move quickly to network construction. It's worth noting that we have observed a fair amount of reworking in multiple customer premises visits that took place that we believe could have been avoided had there been better project monitoring and better reporting systems to collect and disseminate information to those involved in the project. We've also observed a number of instances of visible cases of NBN subcontractors failing to follow established and published NBN work practices in the construction of the network, though most have done good work.

Let's move out of Geraldton and into the areas around Geraldton, those communities in the mid-west, and have a look at their community needs. Outside Geraldton, across the state in virtually every small community in WA—as Mr Wyatt from Curtin University pointed out earlier today—with the exception of people like the postman, policemen, firemen and the CEO of the shire, almost everyone else is actually a businessperson, and these businesspeople could clearly benefit from the availability of enterprise-grade broadband similar to what we have in Geraldton. However, from what we have seen to date, it is our view that neither Sky Muster nor the NBN fixed wireless in its current delivery model is capable of providing an enterprise level of service, and to be globally competitive—and that is the key phrase—regional communities need something better than what these can provide now. Unfortunately, for the regional and remote communities, Sky Muster is the endgame, and there is no viable upgrade path that will lead to enterprise-grade services at any stage in the future, from what we are aware of.

I'll touch briefly on fixed wireless. We only have a limited amount of information. We hear some customers do report reasonable service and reliability. Others have reported unpredictable, highly variable speeds; frustration; and some dissatisfaction. But we don't really have sufficient evidence to say whether this is an inherent issue with NBN or whether it's related to service providers or something else. However, given the number of residences that are meant to be served by each tower, we would suggest that there may be backhaul issues—that is, insufficient backhaul to those towers that are served by wireless links—and only one tower in our region is actually connected to the core network by fibre, which severely limits the capacity that can be provided in future. I did sight one NBN document that suggested that one FEEP connection in a home actually has the same capacity as an entire fixed-wireless tower that's fed by wireless backhaul that has to serve up to 180 premises.

On Sky Muster I will speak quickly on data quotas, reliability and latency issues there. I think you'll find it no surprise that data quotas are generally considered to be insufficient for enterprise-grade demands and latency issues prevent the practical delivery of critical applications like real-time control of farm equipment that requires network connectivity, precision agriculture application using drones for big data collection and analysis, even telephones and videoconferencing, and things more complex like remote medicine. The ability to log faults or to troubleshoot Sky Muster faults with a remote service desk and without a land line is nearly impossible for those without mobile phone service.

Something that doesn't get a lot of visibility but is quite important is that at least 23 communities in Western Australia that currently have ADSL services have been designated as Sky Muster only locations. People in these areas, from the feedback we have received, generally prefer to remain on ADSL due to download quota allowances, cost, reliability and latency issues with Sky Muster. There are concerns that Telstra could at some stage decide to withdraw ADSL in these areas, which would leave those communities with no option other than Sky Muster. Since it is a purely commercial decision on Telstra's behalf whether to retain or withdraw those ADSL services and thus not mandated in any USO or NBN related legislation, those communities could be at risk of losing their ADSL. Those who have ADSL now seem to prefer to retain their ADSL rather than to switch over to Sky Muster.

Most of the Sky Muster feedback from folks we have spoken to seems generally frustrated. Primary issues are performance, reliability and data quotas, especially from those who have to use it for business or where there is a household with adolescents or teenagers at home. There are a significant number of communities we have identified where there is fibre running through the community that is owned primarily by either Telstra or folks like Vocus where the only available NBN service is Sky Muster. We don't quite understand why these communities aren't being offered fixed line services or at least fixed wireless services rather than Sky Muster given their proximity to existing fibre. As I said, almost universal feedback is that data quotas for running a business on Sky Muster are inadequate and upload speeds insufficient are insufficient for business.

I will quickly also note that there are significant concerns in the bush about land lines. The Productivity Commission's recent final report suggests consideration of replacing existing land lines, including those services currently delivered over the Telstra wireless system, with Sky Muster or mobile phone networks to deliver the USO voice services. We believe that there is a significant risk that this would result in a major decline in service quality, reliability and time to repair voice services, impacting negatively on both regional productivity and public safety in an unacceptable way. Based on the input from our communities we strongly oppose the replacement of existing land line services with NBN Sky Muster as a means of delivering USO voice services to regional and remote Western Australia.

In summary, the NBN fibre to the premise in Geraldton is now working well and we believe should be declared a success by NBN. Significant cost savings for the remainder of the rollout are possible if NBN were to investigate and document the Geraldton experience as a case study in order to learn how work practices could be significantly improved. We suggest taking advice from the local retail service providers rather than from NBN's installation subcontractors.

We would also recommend fixed wireless towers all be backhauled with optical fibre and that all RMCP, RTP and mobile blackspot towers that have been subsidised by the state and/or Commonwealth government should be made available to deliver NBN fixed wireless services. There are many opportunities to leverage existing infrastructure. For example, Brookfield Rail's communication network could be used for transit to Telstra's optical fibre network. Mobile towers funded by the state and federal subsidies could be used to extend higher-grade fibre and wireless services to areas now designated for Sky Muster.

A more consultative process on technology deployment with communities would also give NBN better outcomes. The Mid West Development Commission conducted extensive stakeholder consultation and developed our digital initiatives around this stakeholder input. NBN has seemingly decreed who gets what rather than basing this on community engagement and needs.

To be globally competitive the regional communities need access to enterprise-grade broadband. Neither Sky Muster nor NBN fixed wireless currently have the capacity for this. This isn't because Sky Muster or fixed wireless services are broken; it's because the design limitations simply don't permit this to occur. In the current form, the architecture of these distribution technologies is simply incapable of delivering enterprise-grade services.

However, it's not all bad news there. The development commission suggests that NBN should consider working collaboratively alongside third-party, community based organisations to explore potential means of supplementing Sky Muster services with regional terrestrial networks that could benefit the regional communities as well as reduce the demands on Sky Muster, which would in turn provide more Sky Muster capacity for those who truly need it. Thank you.

ACTING CHAIR: Thank you. That was very comprehensive. We appreciate the clarity of the information you provided and also some of the recommendations you've put forward. The story you tell is one that has varied outcomes. It's great to hear that the urban part of the Geraldton township has got fibre to the premise and that that's delivering high-quality, ultrafast broadband. You've made the point that outside that area, as with a lot of regional and remote Australia, it's fixed wireless or Sky Muster, which by comparison are much less fast and also, in the case of Sky Muster, have data constraints. For the sake of the committee's considerations, are you able to give us some examples—perhaps the two sides of that equation—of how fibre to the premise in Geraldton is enabling businesses to take advantage of digital opportunities and to engage in the wider world and the case of people outside the FTTP footprint and relying on satellite where businesses face obstacles or shortcomings or are unable to take those opportunities?

Mr Smallwood : I'll do my best to answer what I heard. It's very soft on this side even though the volume is all the way up. Keep in mind that the fibre-to-the-premise rollout in Geraldton was only completed last month. Think of it as us just now having pushed the 'go' button. Even though there are premises that have had fibre for a couple of years, the critical mass has really only been enabled in the last month or so. So I think to speak of success stories over that period of time is probably premature at this stage. We do have a number of enabling organisations in this part of the world that have set up here, and folks have been able to take advantage of what is, compared to everything else I've heard today, the seemingly unlimited capacity of the NBN. A social enterprise group calling Pollinators has been set up and is doing some extraordinary things with getting young entrepreneurs off and going. We were a participant in the GovHack initiative last year, which the commission also sponsored. Some of our local folks won one of the prizes in that.

On the other side, you are asking what kinds of disadvantages have occurred for folks who do not have access to this sort of capacity. It's a difficult one to pick any particular one out of. I'll mention that there's a group north of Mingenew, where there's a satellite station that operates, that doesn't have access to the kinds of things we have here in Geraldton. As was mentioned by one of the previous participants, their only way to get their data—and, again, this is an international satellite earth station with five different countries having satellites there and doing all manner of both research and commercial opportunities and projects there—to analyse, they load up as many hard drives as they can, put them in a ute and drive them to Perth a couple times a month. If they had NBN fibre or even connection to the AARNet fibre that serves the SKA just north of them, that problem would disappear overnight and their global competitiveness as a location for doing business in this part of the world would increase.

I could go on. It's probably beyond the scope of this inquiry for that, but there are numerous similar instances.

ACTING CHAIR: Feel free to take that on notice. As well as having the top-level evidence about general trends and obstacles, it is useful for us to have actual examples of both successes and frustrations. If you want to provide some of those on notice subsequently, that will be welcome.

Mr Smallwood : I'm more than happy to do that.

Mr BRIAN MITCHELL: Thank you for your testimony today. Have you raised with NBN the concerns that you raised here regarding the limitations of Sky Muster? I am wondering what communication you have had with NBN Co. and what they've said to you.

Mr Smallwood : We have a very good working relationship with the NBN. They've been quite supportive of all the NBN initiatives and all the NBN aspects in this part of the world. I think the issue with Sky Muster and fixed wireless is that in its current architecture it is not broken, so you can't really push a button and fix it. The satellites have fixed capacity, and the only way to upgrade that capacity is to launch more satellites. With the NBN fixed wireless, from the documents that I have sighted from the NBN, the fixed wireless network is limited in the wireless backhaul to 100 megabits per second per tower, and those towers serve up to 180 premises. So, unless there's a full restructure and a re-engineering of that architecture that delivers the backhaul capacity through fixed wireless, it's not something you can quite easily fix. That would require replacing the end-user customer's equipment. It would require replacing the equipment on towers. It would more than likely require replacing the equipment at the serving areas and the nodes that actually supply that capacity to the towers. It's limited by spectrum, not by any particular other thing, and you'd have to change out the spectrum or carrier aggregation would have to be applied—things like that. It's not a simple change to make.

Senator URQUHART: That is very interesting. I wanted to ask you about a couple of things you indicated in your opening statement. You talked about sometimes not being able to deal with issues, because the fault may be with NBN or might be with RSPs. How has that been overcome?

Mr Smallwood : I'm not sure it has been overcome. I think honestly it gets NBN a lot of bad press that's not really NBN's responsibility. For example, I always keep track of what people are saying about the network and how people react to things on social media in the area. Oftentimes you'll see posts like, 'Oh, my NBN's been terrible today, and I'm only getting such and such,' or, 'It's been down for three days,' and then I'll find one of the service providers locally will have gone onto the site and followed it up, and it turns out it was a fault in the customer's wi-fi system or a broken cable. I've been in the IT business for 30-plus years, and I have to say I struggle sometimes. It's not a simple way to understand how these things happen. It's a complicated world, and all it takes is one thing in that complicated chain of events not to work for the whole service to stop. As a customer, if you're not really all that well versed in IT, you have no idea how to easily find out where that broken link is, and so the easy thing is just to blame the NBN. Until somebody teaches you differently, that's what tends to go out on social media, unfortunately. So the problem isn't fixed. We've now fixed the capacity issue to the home. NBN is to the premise everywhere in Geraldton, but it doesn't mean that all those user issues at the end premise have been addressed—not by any means.

Senator URQUHART: I concur completely with you. One of the issues that we've certainly heard from NBN over a long period is that, quite often, the fault is not with them, but they tend to get the blame because people see it as an NBN issue and not an RSP issue. Given your long years of work in this industry, how do you think that that could be overcome? I know NBN have put in a 1800 query number. That doesn't seem to be working very well in terms of pointing to where the problems are. Is there any way that you think that that could be overcome?

Mr Smallwood : I'm not really in a position to give you my personal view in my capacity as the Digital Economy Strategy Manager of the Mid West Development Commission. The bottom line, in most of those circumstances, is that it is an educational issue as much as it is a fault-reporting issue. It's not something you're going to fix by having someone go and sit in a seminar for a day. This is something that everyone around the world struggles with. We're not in a unique position with having that issue here. I do think, though, that the NBN is unduefully blamed at times for issues that they should not be blamed for.

Senator URQUHART: As I said, I do agree, but the issue is that we hear a lot of evidence from people in these inquiries. We also hear evidence from people in a number of other areas where they go to NBN, and they say that it's not with them and it's with the responsibilities. Then, the RSPs send them back to NBN, so it's a shifting of blame. There has to be some solution to that because people, at the end of the day, simply don't know where to go. They go to the first point of call, then they're shunted around from pillar to post over a long period of time. It doesn't help the image of NBN, nor does it help solve the problem. In relation to fibre to the prem in Geraldton, you said that most were connected last month, so it may be too early for you to give me a picture of what it looks like. I suppose what I'm interested in is: how do you think that will enable Geraldton to reach out to other areas of WA, because it's obviously quite close to a lot of isolated areas, and what benefits do you think that can bring to the economy of Geraldton over a period of time?

Mr Smallwood : That's a very good question we get asked on a regular basis. It's important to recognise that the presence of fibre-to-the-premise internet ubiquitously throughout a region is not going to be in and of itself enough to make a transformational economic or social change in a place. It must be coupled with all the other things that make somewhere a good place to live, a good place to study, a good place to have a family and a good place to go on holiday—all the sorts of things like that. You have to package them altogether as something that makes it a desirable location. The NBN is certainly one of those things, and the NBN FTTP certainly raises Geraldton's profile well above most other regional towns in Western Australia. It is something that, given the current circumstances, looks like it will remain relatively unique for a while. I can certainly promise you, as part of the development commission who's responsible for economic development, that we'll be using that as part of our pitch to promote Geraldton as a great place for business and as a great lifestyle location.

Senator URQUHART: Thanks very much.

Senator O'NEILL: Thank you for your very detailed presentation. As the former member for an area that got fibre to the premise, it's very interesting to hear about what's happened where it's been rolled out across an entire community instead of one patch of an entire community. I'd like to take you to the evidence that you put this afternoon with regard to the capacity of fibre to the prem versus what's happening with fixed wireless and mobile towers. I think it was a ratio of one to 180. If you could expand on that a little, that would be very helpful.

Mr Smallwood : I will try and be as non-technical as I can.

Senator O'NEILL: Go for it.

Mr Smallwood : The NBN published a document some time ago that shows the actual architecture of how the capacity gets from the core network, which is eventually connected to the content servers in capital cities where all the content resides on the internet. If you're going to get connected to that content—so if you go to type '' or whatever the case may be—you've got to get across that capacity back to where that content lives in order to access it. So the architecture of the fixed wireless network is such that on the last two portions of that network—where that capacity goes from the content server, through the backhaul network, to the point of interconnect, out through the local exchange and to the fixed wireless towers—it is constrained. Think of it as a water pipe: that last water pipe that gets to the tower can handle at this stage only 100 megabits per second if that tower is connected by a wireless connection as opposed to fibre. So if you have only 100 megabits of capacity in that tower and you have 180 premises—which is the maximum number of premises that can be using one tower—that capacity has to be shared among those 180 users. If there is only one user using it they can have all that, but if there are lots of users using it it is shared among those. And then you get what is called contention, which is the slowing down of traffic when more people attempt to use capacity than there is capacity available. And that is limited by the spectrum—that is, the frequency that is used for the transmission across the wireless area between the tower and the areas that serve that tower. Those changes would have to come at a very high level and you would have to change out that frequency, or change out the way that signal is delivered, if you are going to increase the capacity of those towers to serve more people with more bandwidth. Does that make sense?

Senator O'NEILL: Yes, it absolutely does. There was a submission to a former iteration of this committee, in the last parliament, from a young electrical engineer by the name of Kenneth Tsang, who is widely published across this country and active online. He talked about contention as one of the critical issues that is going to be revealed as the multi-technology mix is rolled out. I am interested in some further technical explanation from you about the number of wireless towers that are served by fibre directly to the tower and those that are served in other ways. I really do not have an understanding of how many of which types we have right across the country. Do you have any oversight of that?

Mr Smallwood : I cannot speak to that outside of Geraldton because I am unaware of the fibre versus wireless connectivity in the fixed wireless network. In Geraldton we have five or six towers and only one of them is connected by fibre. The others are all connected by wireless. That is primarily because of the cost of running additional fibre—or that those towers are not already located on fibre runs, making it much more costly to get those fibre connections directly to the towers. But I do not have a sense of what that ratio is in the rest of the NBN network.

Senator O'NEILL: To be clear: of the six towers you know of, only one is connected by fibre and the rest are wireless?

Mr Smallwood : That is the information I have, correct.

Senator O'NEILL: Given that reality, the majority of those who are served by wireless in your region are at risk of not being able to upgrade their bandwidth and reliability of access?

Mr Smallwood : Reliability is another issue altogether, and we can go into that if you like. Again, I have not had a lot of direct contact with the fixed wireless network as opposed to the FTTP network here in Geraldton.

Senator O'NEILL: Our previous witness—Mr Carter, from Morley Internet Action Group—was speaking about the distress of members in his community who are making the choice to move out of the area or putting their children on buses and sending them to relatives and friends who have adequate internet access for them to be able to undertake their education. And he spoke about businesses being compromised because they simply could not compete given the limited level of access they have to internet capacity. How is having the FTTP in your region enabling business and growing jobs?

Mr Smallwood : At the end of the day I think the best analogy for that is the story of the Red Queen in Alice in Wonderland. The Red Queen says to Alice, 'Hurry, hurry, hurry!' Alice says, 'I'm already running.' The Queen says, 'In this country, in order to just stay in place, you have to run twice as fast now.' And that is what is happening: the rest of the world is now moving forward very quickly with upgrades to their high capacity broadband. If we want to be globally competitive in the region we have to be on the same page. Businesses now have access to huge amounts of bandwidth in many places that our regional businesses are competing with. They have access to big capacity. If we do not step up to the plate and provide similar levels of globally competitive broadband the access to that broadband gives them competitive advantages. Even in the agriculture industry alone, that can be a double digit percentage, based on information from places like Holland. So it is really all about enabling global competitiveness to folks in the region so that they can compete with the folks who are now chasing after their customers who have the same sorts of capacities overseas and even on the other side of the country.

Senator O'NEILL: So we are not just talking about patchiness in terms of access within the nation now; you are action talking about the whole national disadvantage of not having a globally competitive level of bandwidth speed and, dare I say it, reliability?

Mr Smallwood : Again, I can only really speak for my patch of the mid-west. Our objective is to be globally competitive by being able to play on the same page as the folks with whom our farmers, fishermen and business people in the regions have to compete to stay globally competitive.

Senator O'NEILL: Is there innovation in the sector because of the access that you have now?

Mr Smallwood : Absolutely.

Senator O'NEILL: In what way?

Mr Smallwood : This is a conversation in and of itself. If you are not able to continue to innovate, you are going backwards; I think that is a given. And if you cannot connect to the resources that the rest of the world has access to, you are going to be at a competitive disadvantage. Honestly, it is as simple as that.

Senator O'NEILL: We are running out of time so I will all ask you to take a question on notice. I am the shadow assistant minister for innovation. I am very interested in what is happening with innovation in agriculture and food generally. Given that you have a degree of rollout of FTTP in that region it would be very interesting to get some hard evidence from you about that innovative capacity—what it is enabling and what is going on there—as businesses take up the opportunity that is being provided through the new technology.

Mr Smallwood : I am absolutely happy to do that.

ACTING CHAIR: Mr Smallwood, thank you very much for your time today, the evidence you have provided and the recommendations you have shared with us. We very much appreciate you being part of this hearing.

Mr Smallwood : Thank you.

Proceedings suspended from 14:13 to 14:32