Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Hansard source

And the Senate, yes. I present the government's response to the third report of the Joint Committee on the National Broadband Network on its reviews of the rollout of the National Broadband Network, and I seek leave to incorporate the documents in Hansard.

Leave granted.

The documents read as follows—

Review of the Rollout of the National Broadband Network

Third Report - Australian Government Response to the Committee’s Third Report of 25 June 2012 - October 2012

Introduction

In March 2011 the Parliament established the Joint Committee on the National Broadband Network (the Committee) to enable the ongoing parliamentary scrutiny of all aspects relating to the rollout of the National Broadband Network (NBN). The Committee is required to report to the Parliament on the rollout of the NBN on a six monthly basis until the completion of the project.

The Committee has been asked to provide progress reports on:

The Committee tabled its first report on the Review of the Rollout of the National Broadband Network on 31 August 2011 and its second report on 24 November 2011. The government’s responses to the Committee’s first and second reports were tabled in the Parliament on 1 March 2012 and 16 April 2012 respectively.

On 25 June 2012, the Committee tabled its third report, entitled Review of the Rollout of the National Broadband Network: Third Report. The Committee’s third report was informed by two public hearings, one site inspection and public consultation which attracted

22 submissions and two exhibits. The report made fifteen recommendations ranging across: clearance processes for responding to questions on notice; the provision of information on the NBN including key performance data on targets and actual results; communications around voice services to communities in fixed wireless and satellite areas; publishing details of NBN Co’s procurement processes; NBN Co’s policy position for the provision of costing extensions to its NBN fibre footprint, especially for regional and remote Australia; private equity funding and Telstra workforce issues.

Background

The NBN is a telecommunications network that will provide access to high-speed broadband to 100 per cent of Australian premises using a combination of fibre to the premises, fixed-wireless and satellite technologies. NBN Co’s objective is to provide 93 per cent of premises with access to a high-speed fibre network capable of providing broadband speeds of up to one gigabit per second (Gbps). Seven per cent of premises will be served by a combination of next-generation fixed-wireless and satellite technologies providing peak speeds of 12 megabits per second (Mbps).1

The NBN will be Australia’s first national wholesale, open access broadband network offering equivalent terms and conditions to all access seekers or service providers. The Australian Government has established NBN Co to design, build and operate a new high-speed NBN. NBN Co will roll out the network and sell wholesale services to retail service providers. In turn retail service providers will offer retail services to consumers. This is a significant structural change to Australia’s telecommunications industry, aimed at encouraging vibrant retail competition.

On 7 March 2012 the Definitive Agreements between NBN Co and Telstra came into force. The Agreements pave the way for a faster, cheaper and more efficient rollout of the NBN. They include the reuse of suitable Telstra infrastructure, avoiding infrastructure duplication and for Telstra to progressively structurally separate by decommissioning its copper network during the NBN rollout. The Definitive Agreements will mean less disruption to communities, less use of overhead cables and faster access to the NBN for Australians.

Planning and construction of the NBN is well underway. On 29 March 2012 NBN Co released its first 3 year fibre rollout plan, which has an objective of construction commenced or completed for approximately 3.5 million fibre premises by 30 June 2015, in every state and territory in Australia2.

At the public launch of the three year fibre rollout plan NBN Co CEO, Mr Mike Quigley, set out the principles which govern the planning of the rollout and the locations to receive fibre under the first three year plan, including:

1 NBN Co is designing the NBN to be capable of delivering these speeds to NBN Co’s Retail Service Providers (RSPs) and Wholesale Service Providers (WSPs) via Fibre, Fixed Wireless and Satellite. Speeds actually achieved by End Users will depend on a number of factors including the quality of their equipment and in-premises connection, the broadband plans offered by their service provider and how their service provider designs its network to cater for multiple End Users.

2 The terms ‘construction commences’ and ‘construction completed’ throughout this document have the meaning given in NBN Co’s 2012-15 Corporate Plan dated 6 August 2012.

On 8 August 2012, the Shareholder Ministers released NBN Co’s 2012-15 Corporate Plan, which confirms that the NBN is on track to be delivered to all Australians. The NBN Co 2012-15 Corporate Plan confirms:

The key elements of the rollout are now in place, with NBN Co making the transition from planning and initial implementation towards a full-scale rollout.

AUSTRALIAN GOVERNMENT RESPONSE

The Australian Government has considered the Committee’s Third Report and provides the following response to the recommendations.

Performance Reporting

Recommendation 1

The Committee recommends that the NBN Co and the Department of Broadband, Communications and the Digital Economy review the efficiency of their current clearance processes for providing answers to questions on notice so that:

The government notes this recommendation.

The government recognises the importance of providing information to the Committee, noting that time is required to prepare accurate responses to requests for information on the NBN rollout, and for necessary due diligence processes of NBN Co and the government.

The level of interest in the rollout of the NBN attracts considerable inquiries from a range of parliamentary committees. It is worth noting that NBN Co responded to more than 320 Questions on Notice arising from Senate Estimates hearings in 2011-12 and 80 Questions on Notice from the Joint Committee on the National Broadband Network since its establishment. Many questions asked by Members of Parliament or Senators have multiple sub-parts and a level of complexity around the information sought that requires significant investment of resources and time to prepare comprehensive responses.

The government and NBN Co are committed to publishing as much information as possible on the rollout, the company and the benefits of the NBN.

Shareholder departments and NBN Co continue to prioritise clearance processes for responding to questions on notice from Parliamentary Committees.

Recommendation 2

The Committee recommends the government include key performance information in its six-monthly National Broadband Network performance report, listing and detailing: (1) established Business Plan targets and (2) actual results for:

The government supports this recommendation.

The government and NBN Co are committed to publishing as much information as possible on the NBN rollout.

The government’s six-monthly report to the Committee is based on information from NBN Co and provides:

The initial performance reports reflect the early stages of the rollout and as such, contain in addition to financial reports, a growing range of performance indicators as the rollout proceeds.

Key Performance Indicators to date have included information on actual results for occupational health and safety, complaint handling, and network deployment (including the number of premises under construction, passed, and activated).

The indicators included in future reports will be expanded so that, over time, the reports will include further detail as the company and its reporting systems mature and the rollout ramps up.

NBN Co’s 2012-15 Corporate Plan, released on 8 August 2012, includes annual targets for premises passed and premises activated for brownfields, greenfields and satellite/fixed wireless.

NBN Co’s rollout forecasts in the 2012-15 Corporate Plan are consistent with the objective of construction commenced or completed for approximately 758,000 fibre premises by 31 December 2012, in line with NBN Co’s ‘12 month Fibre Rollout Schedule’ and an objective of construction commenced or completed for approximately 3.5 million fibre premises by 30 June 2015, in line with NBN Co’s ‘3 year Fibre Rollout Plan’.

Recommendation 3

The Committee recommends that the NBN Co as soon as possible, provide further key information on its website in a user-friendly format, and also include this information in the six monthly Shareholder Ministers’ Performance Report. This information should include:

The government supports this recommendation.

The government and NBN Co are committed to publishing as much information as possible on the NBN rollout including its progress in each service area and connection advice relevant to end-users.

On 29 March 2012 NBN Co released its first 3 year fibre rollout plan, which has an objective of construction commenced or completed for approximately 3.5 million fibre premises by 30 June 2015, in every state and territory in Australia. On average it will take 12 months from the start of the fibre network rollout in a given area until services are available.

NBN Co’s three year national fibre rollout plan is updated annually with new rollout information. The plan and updates are published on NBN Co’s website www.nbnco.com.au and include advice on progress with construction, as well as listing new rollout sites where construction activity will begin.

Expected timings around the commencement and completion of work in areas within the fibre footprint area are provided in NBN Co’s Monthly Ready for Service Rollout Plan, published on NBN Co’s website http://www.nbnco.com.au/getting-connected/service¬providers/network-rollout.html and includes advice on the:

NBN Co has also published information on its website about connecting to the NBN including a step-by-step guide for individuals and businesses, a brochure on Getting Connected and a guide on Preparing for the NBN.

As of 20 August 2012, 43 service providers were listed on NBN Co’s website as active certified service providers of fibre, satellite or wireless services. The list of service providers is further divided into the following categories to assist members of the public in identifying an appropriate service:

The decision to provide services to a specific location is a commercial matter for retail service providers.

Further information on NBN service providers is available from NBN Co’s website at http://www.nbnco.com.au/getting-connected/certified-service-providers.html. NBN Co is also exploring the possibility of including additional information on its website to enable the identification of retail service providers in service areas within each state and territory.

Recommendation 4

The Committee recommends that the Department of Broadband, Communications and the Digital Economy, in the development of future public education activities, undertake a study of similar international networks, with a view to adoption of:

The government broadly supports this recommendation.

The government notes that a range of reviews and inquiries – including the House of Representatives Inquiry on role and potential of the NBN, reports by the Joint Committee on the NBN and submissions to the Regional Telecommunications Independent Review Committee, together with a range of other surveys and research – encourage the Australian Government to provide further education and information about the NBN to promote greater awareness and understanding of the NBN and the value and benefits of being connected to, and participating, in the digital economy.

NBN Co is already undertaking a range of comprehensive public education activities at the local level and continues to engage with state-based NBN taskforces, local government and regional interest groups.

NBN Co has provided a call centre 1800 number and public website (www.nbnco.com.au) where the community and stakeholders can contact NBN Co directly with questions, queries, and problems.

To further support its public education activity, NBN Co has established two demonstration facilities; the Discovery Centre in Docklands, Melbourne and the NBN Co Discovery Truck travelling across Australia.

The government’s information-based NBN regional advertising campaign was conducted earlier this year and aimed to improve perceptions and understanding of the NBN in regional and rural Australia, including that the NBN will deliver high-speed reliable and affordable broadband to all of Australia and will have a positive impact on regional businesses.

Public information on migration activities will be undertaken by NBN Co, in consultation with government, Telstra (as the existing infrastructure provider) and the wider industry, to support the migration of consumer services during the transition from the copper network to the new fibre optic NBN.

The objective of the public information on migration activities will be to ensure to the maximum extent practicable that end users receive advance notice of the planned migration and are familiar with the action required to be taken by them to migrate to the NBN.

Further to this NBN Co, in consultation with the department, has developed a framework for engaging key stakeholders to assist with the development of public information on migration. This framework includes consulting government, relevant industry regulators, retail service providers, industry and peak bodies, and consumer groups such as ACCAN.

Regulatory and Pricing Issues

Recommendation 5

The Committee recommends that NBN Co include the consumer protection components of the Customer Service Guarantee in its Wholesale Broadband Agreement.

The government notes this recommendation.

The Customer Service Guarantee (CSG) sets minimum standards, such as connection and repair timeframes that apply to the supply of standard telephone services by retail service providers to retail customers (i.e. residential/small business end-users). NBN Co is a wholesale company that does not supply services directly to retail customers. As such it is

not appropriate to include service levels directly relating to retail customers in its Wholesale Broadband Agreement (WBA).

Notwithstanding this, the current WBA acknowledges the role of NBN Co in enabling its customers to meet their retail level obligations. To this end NBN Co’s Product Catalogue, which is part of its WBA, includes a Service Level Schedule3 which sets out a full range of connection and service assurance timeframes. NBN Co is working with its customers through its Contract Development Process (CDP) to further refine these service level commitments. NBN Co has also indicated that its revised Special Access Undertaking will address service levels and commit to an ongoing Product Development Forum.4

Prior to executing the interim WBA in February 2012, Telstra negotiated an amendment that acknowledged that nothing in the WBA amends, limits or negates the rights and obligations of the parties under section 118A of the Telecommunications (Consumer Protection and Service Standards Act) 1999 (TCPSS Act). Relevantly, this provision imposes an obligation on a carriage service provider (here, NBN Co) to contribute to a retail service provider’s CSG liability to a retail customer as a result of a contravention of the CSG, where the contravention is wholly or partially attributable to acts or omissions by the first-mentioned carriage service provider. NBN Co subsequently offered the benefit of this amended clause to its other customers (through a variation to the WBA they had previously signed up to).

Recommendation 6

The Committee recommends the Government more effectively deliver its Digital Enterprise Program to small and medium sized enterprises (SMEs) with the aim of improving SME access to online resources and enabling interested SMEs to achieve an online presence.

The government recognises that small businesses need to be digitally literate in order to maximise opportunities and productivity benefits offered by the digital economy.

NBN Co has released the first of a series of enhancements to the fibre optic network to help enable Australian businesses to make the most of high-speed broadband. NBN For Business is available to telephone and internet service providers and is designed to meet the needs of SMEs.

These enhancements include business grade service levels, higher internet speeds than the existing residential offering and multi-line telephony capabilities.

NBN Co’s business offering is also designed to provide higher reliability, guaranteed bandwidth and faster upstream speeds to end-users. However, it is important to note that

3 NBN Co, WBA Product Catalogue, 26 June 2012, http://www.nbnco.com.au/assets/documents/w-z/wba-sfaa-wba¬product-catalogue-20120626.pdf, pp.143

4 NBN Co, Incentive Based Modular SAU: Design Principles, 20 June 2012, http://www.accc.gov.au/content/ item.phtml?itemId=1060326&nodeId=ffb8fb54e17f0ecec20acf908f518257&fn=NBN%20Co%20Revised%20SAU%20propos al%20(20%20June%202012).pdf

while these services are still under development, businesses in areas where the fibre rollout has been completed are still able to obtain a standard NBN service.

The government has already provided $10 million in grant funding over three years to establish the Digital Enterprise program. The program is helping SMEs and not-for-profit organisations in 40 communities that benefit from the NBN, where work on the rollout has already commenced. The program will help these communities to better understand how they can maximise the opportunities from greater digital engagement, enabled by the NBN.

The Digital Enterprise program services are now available in the communities of Townsville in Queensland, Kiama and Armidale in New South Wales, Midway Point, Smithton and Scottsdale in Tasmania, and Willunga in South Australia.

The establishment of another 34 Digital Enterprise services are proposed for the 2012-13 financial year in the communities of St Helens, George Town, Triabunna, South Hobart, Deloraine, Launceston and Kingston Beach in Tasmania; Prospect, Adelaide City, Adelaide Hills, Salisbury and Modbury in South Australia; South Morang, Bacchus Marsh, Brunswick, Ballarat, Golden Plains Shire, Hepburn Shire and Pyrenees Shire in Victoria; Toowoomba, Goodna, Lockyer Valley and Brisbane in Queensland; Victoria Park, Geraldton and Melville in Western Australia; Richmond, Riverstone, Auburn, Penrith, Tamworth and Liverpool Plains in New South Wales; Darwin in the Northern Territory; and, the Australian Capital Territory.

Funding for the program is available until June 2014. Any extension to the program will require further consideration by the government.

The government is providing practical guidance to Australian SMEs and community organisations about how to get online and maximise the opportunities of the digital economy through its Digital Business website (digitalbusiness.gov.au). Launched in December 2010, the website is specifically designed for people who want to get the most out of the internet for their organisation, but may have limited experience, modest budgets or be busy running their business. It contains easy to understand information on establishing and enhancing an online presence, using online productivity tools to increase business efficiencies, and protecting business data. The Digital Business website contains video case studies that share real examples of Australian businesses and community organisations that are engaging in online activities, as well as a blog that provides updates on the latest trends and advice from industry experts. The website is one of the resources being used by Digital Enterprise service providers.

To give some context to the online engagement by businesses, Australian Bureau of Statistics data shows that in 2010-11, while 90 per cent of businesses had broadband Internet access, only 43 per cent had a web presence5. Australian Communications and Media Authority

5 ABS, Summary of IT Use and Innovation in Australian Business 20010‐11, Cat. No. 8166.0, 26 June 2012 research found that 35 percent of people had bought, sold or shopped online in the month of June 20116.

The department commissioned a study7 on the potential for small business and community organisations to take advantage of the NBN. This study identifies key opportunities presented by the NBN, in addition to outlining a number of challenges to SMEs realising the NBN’s full potential. The government is taking these challenges into consideration in relation to the delivery of its Digital Enterprise Program. They include:

Contracting

Recommendation 7

The Committee recommends the Department of Broadband, Communications and the Digital Economy review its internal processes where the public interest test is used to assess whether material is commercial-in-confidence, and provide details of this review to the Committee.

The government notes this recommendation.

The department considers and responds to requests for information from the Committee in a transparent and accountable manner. Where requests involve the potential disclosure or provision of information that is considered commercially confidential, an assessment is made

6 http://www.acma.gov.au/WEB/STANDARD/pc=PC410254 p153

7 The Allen Consulting Group, Opportunities for small business and community organisation in NBN first release areas, Feb 2011,http://www.dbcde.gov.au/data/assets/pdffile/0020/135506/Opportunitiesforsmallbusinessandcommunity organisationsinNBNfirst‐releaseareas.PDF regarding the potential commercial harm that disclosure may cause including to third parties such as suppliers and contractors, and to NBN Co. The assessment takes account of the particular facts of the matter and:

Each of the interests is weighed up to determine, on balance, whether it is in the public interest to disclose the information.

Requests for the release of information that the Committee may make in relation to the rollout of the NBN are considered on a case-by-case basis as set out above and includes an analysis, for example, as to whether potential disclosure or provision of information may cause adverse effects on commercial relationships and NBN Co’s ability to achieve its business, financial or commercial objectives and hence negatively impact upon Australian taxpayers’ investment in NBN Co.

Matters relating to departmental or NBN Co claims for non-disclosure of information to the Committee are ultimately referred to the Minister for consideration.

Recommendation 8

The Committee recommends that, as a matter of urgency, for all future contracts the NBN Co

update, and regularly maintain, its tender registry to include the following basic information:

The government is supportive of NBN Co being subject to a high level of transparency and accountability regarding its tendering activities.

NBN Co’s overall corporate governance framework is set out in the

Commonwealth Authorities and Companies Act 1997 (CAC Act) complemented by Commonwealth Government Business Enterprise Governance and Oversight Guidelines of October 2011 (GBE Guidelines), its constitution and the Corporations Act 2001. Under the CAC Act and GBE Guidelines, NBN Co is required to notify responsible Ministers of significant events and the operations of the company and its subsidiaries, including major procurement activities.

While there are no formal requirements for tender outcomes to be published by GBEs, NBN Co publishes the details of current, closed and awarded tenders on its website at http://www.nbnco.com.au/working-for-us/tenders.html. The Company also regularly publishes announcements on its website detailing major procurement outcomes. Further, the government’s six-monthly report to the Committee includes commentary regarding major procurements, the percentage of local content in NBN Co’s contracts and a schedule of commitments detailing the aggregate value of commitments payable by type and maturity.

While contract negotiations are a matter for NBN Co, the government is confident that NBN Co has a comprehensive and documented approach to achieving value for money in procurement and undertakes the appropriate levels of due diligence in its approach to tender processes, recognising its responsibilities to demonstrate alignment with the principles of probity, transparency and value.

Services in regional and remote Australia

Recommendation 9

The Committee recommends that the NBN Co revise its terminology and language to clarify community understanding of what the three National Broadband Network services can and cannot support, to enable the community to prepare for the network’s services appropriately and become fully informed.

The government supports this recommendation.

NBN Co has developed and published material on its website (www.nbnco.com.au) that demonstrates the opportunities created by the NBN and explains the capabilities of the three technology platforms; fibre, fixed wireless and satellite. This material includes case studies, fact sheets, videos, presentations, brochures and a range of other web content.

NBN Co has provisioned additional resources for the marketing and execution of public education activities over the deployment period and this will support the delivery of more information about the NBN in regional communities. Public education activities will be aimed at addressing consumer needs including highlighting the benefits of the different NBN technologies and ensuring information is available on how to prepare for the transition to the NBN.

Over the longer term it is expected that NBN Co will play a primary role in this activity as it aligns with the Company’s current communications plans.

Recommendation 10

The Committee recommends that the NBN Co include in its web-based interactive rollout map specific information on the provision of voice services for communities in fixed wireless and satellite access areas.

The government supports the provision of further information for consumers of voice services in fixed wireless and satellite areas.

The government is committed to the continued provision of voice services to residents and businesses in NBN fixed wireless and satellite areas. Under an agreement reached between Telstra and the Commonwealth, as administered by the Telecommunications Universal Service Management Agency (TUSMA), Telstra has a contractual obligation to maintain the copper network in non-fibre areas, and provide voice-only services nationally (including locations outside the fibre footprint) for a period of 20 years from

1 July 2012. TUSMA’s agreement with Telstra to deliver key services such as standard telephone services and public payphones ensures continuity of basic safeguards for all Australians and in particular, strengthens the safety net for rural and regional Australia.

For premises in NBN fixed wireless and satellite areas, residents that have existing telephone services will have the choice to maintain those services or access a voice service provided over the NBN’s fixed wireless or satellite network.

Further, the 2012 Regional Telecommunications Independent Review Committee recently examined telecommunications services in regional, rural and remote parts of Australia (‘the Sinclair Review’). The Committee’s report ‘Regional Communications: Empowering digital communities”, was tabled in the Parliament on 23 May 2012. Recommendation 2.3 of the Sinclair Review was that “the government should develop and implement a comprehensive communication strategy to raise awareness of consumer safeguards for people in regional Australia.”

The Australian Government responded to the recommendations of the Sinclair Review on 23 August 2012. In response to recommendation 2.3, the government has stated that the Department of Broadband, Communications and the Digital Economy will work with the Department of Regional Australia, Local Government, Arts and Sport to develop and implement a strategy to disseminate information on consumer safeguards to people living in regional Australia, for example through Regional Development Australia committees and the ‘myregion’ website. This will include providing information on TUSMA and associated arrangements for ongoing availability of voice services, including for communities in fixed wireless and satellite access areas.

Recommendation 11

The Committee recommends that the NBN Co finalise its policy for the provision of costing extensions to its planned National Broadband Network fibre footprint:

The government supports this recommendation.

NBN Co has recently published its Network Extension Policy on its website (refer to http://www.nbnco.com.au/assets/documents/network-extension-policy.pdf).

The government is supportive of NBN Co publicising its Network Extension Policy and committed to making this information wi