Liberal MP and former Optus executive Paul Fletcher has delivered a stinging attack on the ambitious technology projects of the Labor Government, arguing Australia has not learned lessons from numerous failed IT projects in the private and public sector.
Fletcher savaged the National Broadband Network (NBN), the Personally Controlled Electronic Health Record (PCEHR) project, and the ‘one PC per student’ Digital Education Revolution in a speech to a conference of technology journalists on the Gold Coast Sunday.
He compared these schemes to – among others – the UK’s failed e-health project, the cash flow problems and subsequent Leighton buyout of Nextgen Networks, SingTel’s write-off of Optus’ HFC Network losses and the collapse of mobile telco One.Tel.
Fletcher described the current Federal Government's ICT policy agenda as an “extraordinary experiment in government policy” unrivalled at home or abroad.
His main concern was that, across many of these initiatives, the Government's policy had assumed Australians will take up a given technology or service.
“You can’t mandate take-up,” he told the audience. “You cannot know in advance which applications will be found to be useful. Plenty of applications have bombed because users simply weren’t excited by them."
Fletcher drew analogies with the launch of 3G mobile services in Australia which, while dominating the landscape today, was originally marketed by Hutchison ‘3’ as a means of making two-way video calls, an application Australians did not have much of an appetite for.
The NBN, he said, would repeat the take-up issue.
It is one of the most disruptive “all eggs in one basket” projects in terms of IT risk, he said, as it involves building three new networks, migrating ten million households off the copper network and 14 million onto a new one by 2025 while also requiring new billing systems, operational support and customer support systems.
He argued that under Unconditioned Local Loop (ULL) provisions, Telstra’s competitors had at least the capacity to force technology change by installing their own DSLAMs in telephone exchanges (when and where Telstra allows access).
This, he said, was the reason many Australians enjoy ADSL2+ and Naked ADSL services.
The Government had legislated against this manner of infrastructure competition, he said, including “anti-cherry picking” provisions and requiring that any competitive fibre be offered on an equivalent, wholesale basis.
Fletcher continued this line of argument to criticise the Government's $467 million PCEHR, an electronic infrastructure for shared health summaries.
He argued that doctors need to be enthusiastic adopters of the system to ensure its take-up by citizens, which has yet to play out.
The Government expect 500,000 trial patients to be signed up for the e-health record by the time the project goes live to the public on July 1 this year. However, it has been hit by concerns around take-up from GPs and patients, as well as numerous setbacks to project timelines.
“The goal [of the PCEHR] is a pretty sensible one," he said. "The question is whether the hardware and software will be used at the degree we want."
His history in the private sector taught him to “beware of the big bang". he said.
“There are plenty of horror stories for new IT billing systems being abandoned after millions of dollars were spent," he said.
The UK Government spent £11 billion on e-health but ultimately failed to deliver a functional system, he said.
“Often an incremental approach is more prudent.
“As you in the industry well know, you can lose a lot of money betting on technology.”
Read on for Fletcher's alternative policy suggestions...
Fletcher was unable to deliver any alternative visions for either project.
Asked by iTnews how a Coalition Government might change behaviour to encourage the uptake of e-health Records, Fletcher indicated only that the timeline for the project would be extended.
“The [e-health] concept is a very attractive one,” Fletcher said. “The problem is in turning that vision into a reality in a tight timeframe.
"An incremental and more realistic approach might lead to a better result.”
Fletcher told the audience it was not too late to turn back from the NBN project – which is far from “irreversible” with only a few ten thousand homes currently connected.
“We’ve made it absolutely clear – we’ll not be ripping fibre out of the ground,” he said.
But further rollout projects can be cancelled, assuming the Labor Government hadn’t paid for these projects ahead of the rollout.
On this, he said the Coalition “needs to see the full details of all the projects” before setting ICT policy of its own.
The most likely approach, he said, was to set an inquiry using an instrument like the Productivity Commission, using what Malcolm Turnbull argues is an acceptable speed of 24 Mbps as a base line.
While Fletcher agreed Australia’s position on broadband is the result of a “legacy of dominant monopoly” and that “it would make sense for Telstra to split”, he offered no alternate mechanism to achieve the telco’s separation.
“We will be looking for private sector players to take the network company role,” he said, suggesting that any Government assistance would rely on the private sector also agreeing to offer wholesale, open access to infrastructure.
But Fletcher told iTnews after his conference keynote that the Coalition would most likely allow Telstra to compete in 4G mobile spectrum auctions regardless of whether the telco splits, blunting the one policy instrument the Government has used to achieve separation.