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Joint Standing Committee on the National Broadband Network
Rollout of the National Broadband Network

HENDRY, Mr Michael, South West Independent National Broadband Network Adviser, Regional Development Australia-South West

ACTING CHAIR: Welcome. 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, and we will then move to questions from the committee.

Mr Hendry : Thank you, Mr Chair. The creation of this advisory position came from discussions between the South West Development Commission, Regional Development Australia-South West and local business organisations. During the early part of the NBN rollout in the South West, it was noted that some retail service providers were giving advice that was either inaccurate or incomplete. After initial discussions, it was agreed that Regional Development Australia would manage a program to implement the South West independent NBN advisor role for a period of 18 months, commencing in August 2016. The South West region consists of two federal government electorates, being Forrest and O'Connor, and 12 local government areas. The NBN advisor position was created as a partnership between the South West Development Commission, Regional Development Australia-South West, NBN Co, Business South West and the South West Chamber of Commerce and Industry.

The purpose is to provide independent, impartial and accurate advice on what needs to be considered when transitioning to the NBN, primarily targeting the small business sector, not-for-profit organisations and the regional community. Given that many of these people and organisations are generally time-poor and not tech savvy, this program has provided a much needed point of contact for all NBN related matters. It has been about providing people with the right information so that they can make the best decisions for their own circumstances.

As the NBN advisor, I'm responsible for planning, coordinating and delivering accurate, unbiased information to all community segments affected by the change in telecommunications infrastructure delivered by the NBN. To this end, I have consulted with many other like-minded groups, such as ACCAN, BIRRR Aus, the ACCC, the Telecommunications Industry Ombudsman and RSPs to ensure an accurate and consistent message. I've maintained close contact with federal and state politicians, particularly Nola Marino, the member for Forrest. I've developed a four-page information brochure, which I've provided, to assist people in asking their provider the right questions. I've planned, organised and delivered over 100 public presentations to more than 2,500 participants in most towns of the South West, both business and consumer. I've provided advice to consumers by phone, email and in person. I've also undertaken numerous cold-calls on local South West business owners; maintained an NBN advice website with useful information, brochures and links; participated in regular Q&A on local ABC talkback radio; and drafted timely press releases to local media on relevant issues.

The issues that I see that need to be addressed by NBN and retail service providers are as follows. There needs to be a greater awareness of the role that retail service providers give in relation to your experience on NBN; how they configure their network and how much of the NBN they purchase will make a significant difference to your experience. There needs to be a greater awareness of the little-known 12/1 NBN basic speed. This speed is often comparable to or less than the current speed achievable on the ADSL network. Given that it is little-known, it is unfortunate that most of the providers commence their packages at 12/1 and fail to mention this to their customers, so their customers' first impressions are that the NBN is a dud and providing a totally inadequate service, whereas if they had been provided with some better information they may have chosen a speed that would better reflect their needs.

Other issues include retail service providers taking orders and not keeping customers informed. There is an issue with delays in connection and missed appointments, often from bouncing between NBN Co and the retail service provider. There is a need for greater transparency with service class 0 and service class 10 premises. Essentially with the rollout, for various reasons up to 10 per cent of each area does not go live when the rest of the community does so. The delay in getting these premises information and connection causes great concern across the community with this 10 per cent greatly reflecting on the performance of NBN. A slight upgrade to the ability of the website that NBN have that would show what the problem is and the projected remediation date would be a great help. Also, we need to have the ability for flexibility on the fringes between fixed wireless and satellite areas, where we have an almost bloody-minded attitude of: 'No, that's where the fixed wireless area covers. You're in a satellite area; you are eligible for a satellite service.' I have a number of examples of people who have had this to-and-fro, only to go and get their own private testing done at their own cost and then subsequently being approved with a fixed wireless service because, yes, they were well within the range of a fixed wireless tower.

I have just three more points to make. In the middle of that, there are a number of questions that I've placed on the documents that you all have before you. I won't go through those as they're for later on, but, before I end, my overall experience—with the documented speeds that I'm collecting from people who are doing speed tests and emailing them to me—is that 90 per cent of the documented speeds that I have, these people are achieving within 20 per cent of their sign-on speeds. So if they are on a 25/5 plan, they are achieving above 20 and above four. The experience of these people and their feedback has been predominantly positive.

Secondly, when I first commenced in October the satellite service was dreadful, to put it mildly. But since a lot of focus has been placed in that area in the last three months, the focus on satellite 1 in correcting the software issues and the commissioning of satellite 2 has led to an exponential increase in the quality of this service. The last three months I have had people phoning me to comment on the fact that the service has improved out of sight.

Another thing is the NBN website has been updated significantly in the last couple of months to provide better levels of information on issues such as technology and timing. As mentioned earlier, this could be improved to include things that do cause issues with service class 0 and service class 10 premises. Thank you.

Mr BRIAN MITCHELL: Thanks for your testimony. It struck me when you said that people are spending their own money to discover whether they can have fixed wireless capability. Do you know what that testing involves to find out whether they are able to get a fixed wireless signal, even though they have been told they are in the satellite area?

Mr Hendry : When you go to the NBN site, which you are fully aware of, the signal shows as a square pattern. Signals don't travel in square patterns; it's a desktop survey. So the example that I could best give you is one from last week in a presentation I was doing. This person was in an area of 200 metres in Bridgetown, about one kilometre from the centre of Bridgetown, that was designated satellite. The entire surrounding area was fixed wireless. He was on the top end of the street and considered that as his neighbours had it, he would most likely receive a signal because he could see the tower from his roof, which is probably a good decider. So he engaged a technician from Manjimup, a drive of half an hour away, who came out and stood on his roof with a signal meter pointing at the tower and achieved a stable signal, and then advised NBN. NBN then changed their mind and offered him a fixed wireless service. The same person who did his signal then came back and did his installation. The fee was $121 and it finally achieved his outcome. These are issues.

I find it very difficult when I have a customer, say, in a farming area that has the NBN on the corner of their property or on the shed on their property and I try and get them a fixed wireless signal. I talk to NBN and they say that the RSP can provide that. I talk to the RSP and they say, 'No it comes up as satellite. NBN have to fix it first.' So we bounce a lot between NBN and the retail provider.

Mr BRIAN MITCHELL: Have you come to a firm view as to where that problem exists? Is it the NBN that needs to—

Mr Hendry : I would like to see greater flexibility in NBN. Given that they will allow two tests for everybody who has the purple signal land on their premises, I can't see that the odd test in a fringe area is going to greatly impact any of their operations.

Mr BRIAN MITCHELL: You mentioned up to 10 per cent of a given area will get zero service—is that right?

Mr Hendry : Basically zero service. It is generally caused by length of copper or condition of copper. There has been a significant blow-out in service class 0. Service class 10 is effectively the same but in a fibre-to-the-node area. Essentially, they cannot take up a service with NBN until either the length of the copper or the condition of the copper has been addressed.

Mr BRIAN MITCHELL: Who addresses that?

Mr Hendry : That's NBN's responsibility. I understand that for a number of months NBN have been working on these issues and installing micronodes closer to the premises so they can achieve this minimum wholesale speed of 25/5, but for some reason have not been activating the nodes in a timely manner. I have been given assurance by NBN that there is a great focus on activating these micronodes. They should be finished the program by the end of October this year, which will reduce that number of, basically, no service areas.

Senator SMITH: On a similar point to Mr Mitchell: Mr Hendry, you mentioned the bouncing backwards and forwards between the RSP and the NBN in regard to the fixed wireless satellite provision. You would like to see NBN have more flexibility around that. If you were walking in NBN's shoes, why would they not want to better facilitate an issue like that? I am trying to understand. Is it an internal-process issue? What would be motivating NBN to have that lack of flexibility?

Mr Hendry : It doesn't seem to be a motivation issue. It seems more to be a policy issue rather than a motivation issue. At the end of the day, the guy that did the independent testing is the same guy that does the installation.

Senator SMITH: It's obviously a decision that is taken high in the organisation for whatever reason. That is worth knowing.

ACTING CHAIR: You talked about the buck-passing or that the two sides of the equation are on the one hand consumer knowledge and understanding and on the other hand, to some degree, regulation of the relationship between NBN as the wholesaler and the RSPs. We've heard lots of evidence from a range of representative groups—peak bodies, individuals, chambers of commerce et cetera—on this issue. It is one of the most frustrating things. Is there a bit more that you can say about how you think that needs to be addressed in the future on both of those strands? On the one hand, it is about people understanding that, between their own hardware, the RSP and how much capacity they are purchasing in order to meet all of the plans that they are delivering, and the infrastructure. Part of the problem at the moment is that an individual doesn't have much chance of understanding where the problem might lie. We do know the ACCC—and I think, separately, Choice—are moving to provide some better evidence of what is happening. What is your view about how we deal with that going forward? If it is about consumer knowledge and visibility of the problem, how do you think that can be achieved? If it is about regulation, how do you think that can be achieved?

Mr Hendry : I do not think it is greater regulation; I think it is greater clarity on the roles and responsibilities of NBN, the retail provider and the consumer. We talk about those during each presentation that I do. For example, the issue that Senator Smith raised, that is probably an NBN policy issue. I know there are not a lot of people like myself that are doing this role anywhere but, if I had a call from, say, a farmer that was in a fringe wireless-satellite area, I would know who to go to. I have been to NBN through the contact that I have, and they have sent me to the retail provider. I speak to the retail providers who come to my presentations on a regular basis. I say: 'This person here requires a test. The signals on their property are not in their house. Can you arrange that?' They say: 'No, I can't do that. That's an NBN problem.' This gets really frustrating when my contact at NBN advises me that it is a retail provider, and the retail provider says, 'No, we can't act on that until the portal shows that we can give them a fixed wireless test.' I think it is more a delineation of responsibility. You can't have one size fits all. If an issue arises, NBN and RSPs need to get together and say, 'We will fix this issue,' or, 'We will update the portal so the retail providers can now fix this issue with their consumers.' It is really a delineation issue rather than a huge policy or regulation issue.

ACTING CHAIR: I think you are right to a point. I think the difficulty is that some of the delineation actually exists, it's just that the consumer is not enabled to lay the responsibility at the right feet. We are in a process at the moment in my electorate—fibre to the node is being rolled out. First of all, you see the green boxes starting to be built, the NBN truck and various other bits and pieces. People start being hopeful. Within six to eight weeks of that, the literature starts flooding into the mailboxes from the different RSPs saying to households: 'You are going to be NBN ready soon. Why don't you sign up with us? We have some fantastic deals for you.' But one of the things that seems to happen is that the CBC pricing means that RSPs will sensibly take up only as much capacity as they feel that they need and/or can get away with. They are in a sort of market share phase at the moment. They're trying to sign people on, and I would say they would take the view that if they can sign on 10 people and one person ends up leaving after a little while through this appointment then that's not too bad; they've still got nine on the hook, even if the service they're delivering isn't meeting expectations.

I don't know how greater consumer knowledge helps that. One of the questions another committee member, Mr Jones, has asked is: should RSPs be required to say not 'up to' but 'a minimum of' in terms of the speed and data that they can provide? And should NBN Co disclose to every household the information they tell us they have, which is the upper-level infrastructure capacity of each residence?

Mr Hendry : I didn't quite get your question on the first one, so I took it on the regulation-type side. Yes, it is a significant issue, this idea of being able to understand which provider to go with. And at every presentation those people who turn up early will sidle up to you and say: 'Quietly tell me: who's the best? Who should I go with?' And after the presentation the same number of people walk up and do exactly the same. It is a significant issue to try to determine what the business plan of the 130 providers in WA is. Essentially I do an explanation of what's happening. Some providers will buy one lane of CVC; others will buy three lanes of CVC. Only after the ACCC starts doing some reporting will we start to see some of the differences in the business plans come out. So, this person here who buys one lane of highway and stacks every car he's got in it will be selling us, say, a 25/5 plan, but his typical busy speed may be 3/1. Very quickly the consumer will be able to see how this guy is configuring his network, and the same with the person over here who purchased three lanes for his significantly larger number of customers so that their peak experience will be a much better experience. And he'll be able to say, 'Well, come on my 25/5 plan, but during the peak we may be 18/4.' This will provide some transparency to the consumers about what's happening between No. 1 and No. 130. And it's just crazy to expect anybody to understand what their business models are.

So, the advice I give people is that ACCAN has a reasonable brochure; talk to your computer shops, talk to your chambers of commerce, your shire councils, go on sites like Whirlpool Forums and put a question on it: does anybody have any good experience about Exetel in the south-west of WA? What I am greatly encouraging people to do is, if you're considering changing provider and you're unhappy with your current provider, do your research before you move and make sure that you're going to move, and if you do move and you don't know who you're with, how about considering a casual plan so that you can flick them after a month if they're not meeting your needs? So, there are a number of ways people can protect themselves. If at the end of the day—and we have this experience a couple of times a week—somebody has signed on for the couple of years with their organisation and is dreadfully unhappy, I go through a process, as shown on the back of the brochure. Step 1 is, do your testing, make sure it's not inside your house. Step 2 is, talk to your provider and if they don't respond after 10 days then step 3 is, go to the Ombudsman and get a final judgement on that. Don't simply muck around and hope that things are going to get better, because they won't.

But until that reporting comes out in an independent fashion, really we're all flying a little bit blind. The only issue I have with the independent testing—and I guess it's a finance issue—is that there are 2,000 planned for the first year, with another 2,000 coming on next year. With those numbers it would appear—I haven't been able to get a number out of the ACCC—to be wavering between four and six providers that will be tested. I would like to know where that leaves the other 124. Basically fixed wireless and satellite are also not going to be tested, and they are a significant part of the whole rollout. And as we were discussing earlier, I think we've just got to be careful: if we don't test it, there is the possibility that what you don't test doesn't get measured, doesn't get any attention. So, the areas where these fixed wireless satellites are—rural and regional Australia—will again fall further behind the metro areas.

ACTING CHAIR: At the point that we're at, as far as Sky Muster satellite is concerned, you've described how there have been some recent improvements, which is understandable—the provision of the second satellite and some better tasking of the spot beams and so on. But from what we have heard, there is a sort of a ceiling, a capacity and speed ceiling, with the satellites. And while it's delivering an improvement for some people, for other people, who had ADSL connections, they are at this stage being forced to choose and at some stage perhaps will just be required to move off ADSL altogether if Telstra stops serving those areas, and for them it is satellite or nothing. What's your view about the adequacy of Sky Muster as a service in the near future? In many cases it is being used by people who are effectively enterprises or businesses of some kind. What's your sense of it and of how future proof it is?

Mr Hendry : I don't think I'm technically qualified to talk on how future proof it will be. But essentially my understanding—I asked NBN only probably a week ago whether there is a possibility to upgrade the speeds on the satellites, and they said no, that 25/5 is the structure that's going to remain for the life of those satellites. The second issue was capacity and obviously they're looking at doubling a number of the allowances on the satellite service come October, which is great news. I can only reflect—we don't have millions connected in the south-west as yet, but I have had four reports in the past three months of people being very positive about their experiences on the Sky Muster satellite, achieving speeds in the range of 22 to 23 in download, and an upload of 2½ to 3½. So, for many of those people who've had very ordinary ADSL services in the past, they are really quite impressed with the improvement in service.

The concern that I would have—and it's only a report for your people to consider—is the Productivity Commission report that came out about a month ago with the comments about the retention of the copper network in the fixed wireless and satellite areas. A lot of people are going with a dual focus on that, because if they are folk who don't use the internet all that much then they're staying right where they are; they're happy to have a phone that works when the power's off, they use their mobile on many occasions when they do need data, and they're not using a lot anyway. There are obviously other people who do use a lot of data, and if they swing their entire service across to NBN, whilst you can get the service on there, there would need to be a fairly significant robustness about that, because it may be their only link to the outside in case of emergency, because there are many places that are satellite or fixed wireless that don't have mobile phone coverage. I haven't been told by NBN, but my reasoning is that we're keeping the copper network in the fixed wireless and satellite areas simply because of that issue of no mobile coverage in a number of those locations.

Senator O'NEILL: Mr Hendry, it was good to have a chance to speak briefly with you in the break. You have put into evidence this afternoon some concerns around the ACCC investigation into speeds. We thought it was the breaking of a drought—the ACCC, at least—which proved long ago that they had capacity to do this and are actually now being funded and enabled by the government's change of attitude to go ahead. But I did say to you in the break that we have heard, in evidence—and I think the deputy chair said it again this afternoon—that the NBN Co has put on the record that they actually know the speeds. Sometimes, when you're sick, you go to the doctors for a test for something because you don't know what it is. The question is: NBN Co do know the speeds—we don't need to beat around the bush and find out what's going on; they actually know what's going on—so how much would it change the good work that you're doing in explaining the NBN to people if the NBN speeds, which are known, were actually made available to the consumers across the country who you're interacting with?

Mr Hendry : I think it would make it more useful, obviously, for two reasons. When we get people converting from ADSL to NBN, what I suggest to all of them is: 'Test your speed before you move. Then, you can make an appropriate choice about what speed you're going to go with with NBN.' If people knew their maximum or minimum speed, they would be able to make a much better choice. But that speed is only part of the speed the customer is going to receive. What we're calling 'that speed' would be an NBN-wholesale speed—end to end with no retail provider in the middle. It would give the customer much better leverage when they're dealing with their RSP if, for example, they signed up for a 50/20 service and knew that their line speed was 70/30 but was only achieving 25/5. They would then know that the NBN line speed could handle 50/20 but, for some reason in there, the RSP is stopping them achieving their maximum speed.

Senator O'NEILL: And that's because of the issues that the deputy chair raised about how much—

Mr Hendry : Yes. I missed answering that.

Senator O'NEILL: they've bought?

Mr Hendry : Yes, it would be very useful.

Senator O'NEILL: This is a live issue that's being discussed at the moment. I hope that you can provide more information to the participants in all of these conversations that you're having—that we are certainly pushing for the government to address this issue of people falling between the cracks and not having access to information, basically, about what they can buy because of the limitations on their technology. If you could help out with that dissemination of information, I'm sure it would be—

Mr Hendry : Absolutely. But, as I said, that's only half of the equation. The other half is: it does give you a bit more clarity in determining where an issue lies if there is a problem with the service because, if the line can take 70, you're getting 20 and you've signed on for 50, it certainly gives you a line where you can say to your provider: 'NBN can achieve this speed. I want this speed. Why am I only getting this speed?'

Senator O'NEILL: The other thing that you've said this afternoon is that, if you don't get what you're expecting within 10 days or so, you should contact the ombudsman. The Telecommunications Industry Ombudsman has given evidence to this committee. We are very concerned about the quality of the data keeping, and we're having a little difficulty, frankly, getting some clarity around the nature of the data that's being kept and any changes to practice by the TIO. Are you aware that the TIO have no power to get the RSPs and the NBN in the same room to resolve these issues?

Mr Hendry : No, I don't know that, but I have had—

Senator O'NEILL: They don't. They can't do it.

Mr Hendry : No, I'm not aware of that.

Senator O'NEILL: They can't do it. What we've got is a problem where, even if you go to the TIO, they can't actually coerce the NBN Co and the RSPs to actually get together and sort this out. Hence, you've got all of these people who feel like a ping-pong ball in a machine getting pinged from one to another. But they're not clocking up any points on the way—just a bit more frustration at every collision.

Mr Hendry : I would have to say, though, that, with the advice that I've given people—which is: follow the process to get a result—there's been very positive feedback, basically, around broken contracts. For example, if someone's not achieving a speed and they've been to the provider and the provider's been unable to explain why or provide a better service based on what the customer's signed on for, if they go to the ombudsman, within 10 days the contract will be broken and they'll be free to go somewhere else. It doesn't provide them with a solution, definitely, to the problem itself, but it gives them the option of getting out of a contract in which they're not getting the service they've paid for.

Senator O'NEILL: An article by Gary Adshead in today's West Australian talks about the threat to lives from the NBN failing. I commend the brochure that you have provided. It is user-friendly, and I am sure many people across my electorate of New South Wales would be happy to receive it. You talked about medical alarms. Both the back-to-base ones and the non-monitored ones are clearly very vital pieces of health security for people across the nation. What is your understanding of the current situation with people who have monitored and non-monitored personal medical alarms? How is that going here in Western Australia?

Mr Hendry : It seems to be progressing. There are a number of providers—people like CareAlert and Silver Chain. The fire and burglar alarm people have been particularly proactive in moving the majority of their customers onto the mobile network, where they do not have issues with the power going out and no service. A number of the providers in the health alarm area have been advising people to do the same. They are moving their services to search for a mobile signal rather than a fixed line service so that people have continuity of service. My advice to all people who have one of these alarms—in particular, the monitored alarms—is that they should not move until they have sorted this out with their provider. Otherwise, they may lose the service. And they should obviously be aware that, if it is on a fixed line, if you lose power you lose service.

Senator O'NEILL: What is the quantum of this problem in the community here in Western Australia? I live in an ageing community in New South Wales. It is a very significant issue in that community. What about the region you are looking after?

Mr Hendry : I would suggest that it is very similar. It is probably very similar right across Australia; other than in the Pilbara, the entire population is certainly heading into that age bracket. It is something that does need to be addressed before people move off the NBN, simply because it is an issue.

Senator O'NEILL: Are you aware of the differentiation in access to funding support for monitored alarms and non-monitored alarms?

Mr Hendry : No.

Senator O'NEILL: There is a difference. Our secretariat might be able to get in touch with you and give you a bit of information about that for your people.

Mr Hendry : That would be good.

Senator O'NEILL: One of the questions I asked at the last estimates was about who is now making the decisions about who is getting the money. Basically, the government gave the authority to decide whether those who were monitored or non-monitored were going to get the support in transition. The NBN made the decision. The last time I questioned the minister, he indicated it might now be a joint responsibility; we still do not have clarity about whether it is appropriate for the government to hand social policy decisions off to NBN Co, a technology company. So that is a very live issue in terms of the financial support that is part of a transition.

Mr Hendry : Absolutely.

Senator SMITH: Mr Hendry, in your opening remarks you mentioned that you had been given an 18-month grant to perform the role that you currently perform?

Mr Hendry : Yes.

Senator SMITH: And that was from the Royalties for Regions program?

Mr Hendry : I am unsure of the original funding area. It came from the South West Development Commission. They provided most of the funds. Regional Development provided significant funds. Business South West and South West Chambers all provided some funds.

Senator SMITH: It sounds to me that the role you are performing is a very valuable one because it seeks to, at a grassroots level, increase people's level of understanding and, importantly, try and fill these gaps or unclear lines of distinction between RSPs and NBN. Has funding been approved for another 18 months or so?

Mr Hendry : No. Essentially, it was for the rollout of the South West. Most of the South West has been completed, apart from Brunswick and Pemberton.

Senator SMITH: So it was just for the life of that?

Mr Hendry : Yes, it was for the life of the rollout. There was talk that, if there were funds available, it may be brought back for a month or so, when Brunswick and Pemberton do go live. Can I just make another comment for the committee. I was reading that newspaper article very quickly at lunchtime. On the speeds that were quoted, they were talking about wireless broadband. So the writer of that article does not understand the structure of that network or the mobile network, because wireless broadband is not NBN. This is an issue that pops up quite frequently; when people come in they confuse the two networks. So it really needs to be emphasised very strongly during presentations that the mobile phone wireless network is a separate discrete network that is not impacted by the NBN and it will continue to expand. But still, as evidenced by the article in the paper, people confuse what the NBN is, what the ADSL network is and what NBN is bringing. So I think there is a real need for more positions such as mine to assist people at the grassroots level who are not tech savvy. I am not a technology-savvy person but I can pick up and understand enough that I can share it with people who need to know.

Senator URQUHART: Mr Hendry, I absolutely concur. In fact, I was just saying to Mr Mitchell here that I want two of you in Tassie! People who are signing up to the NBN and trying to get information are screaming out for exactly what you have provided. I want to ask you about your leaflet. Did you put this together?

Mr Hendry : Yes.

Senator URQUHART: Did you have to do that in conjunction with NBN?

Mr Hendry : No. There are things in there that NBN would rather I did not put in.

Senator URQUHART: So you did this under authority from the different organisations that employ you?

Mr Hendry : Yes.

Senator URQUHART: It is fantastic. I think it is great. So this belongs to the South West business community?

Mr Hendry : I work for Regional Development Australia. I consider it an open publication. I provide that to people like ACAN to spread as widely as possible.

Senator URQUHART: It is fantastic. I think it is really useful. Congratulations. When we can clone you, we will bring two of you to Tassie!

ACTING CHAIR: Thank you, Mr Hendry. We will explore the capacity to 3D print you and distribute you more widely! We appreciate you sharing your expertise and experience with us in evidence today.

Mr Hendry : Thanks for the opportunity.