Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

I present the second interim report of the Senate Select Committee on the National Broadband Network, entitled Another fork in the road to national broadband.

Ordered that the report be printed.

by leave—I move:

That the Senate take note of the report.

It is with pleasure that I rise to speak to the tabling of this report, appropriately titled Another fork in the road to national broadband. This committee is currently scheduled to table its final report in the week commencing 22 June. In the course of tabling this report I want to deliver some thanks, firstly and most importantly, to the secretariat—namely, Alison Kelly and Veronica Gover—for their dedication and continued hard work. Likewise, the committee wishes to thank Jonathan Chowns from the Parliamentary Library for his behind-the-scenes assistance. I also want to thank the stakeholders and those who gave their time and dedicated their expertise to making submissions to this committee and appearing before it. I also want to thank my colleagues on the committee of all political persuasions for their hard, dedicated and very constructive work on this significant part of the government’s policy changes.

In terms of the road thus far with the National Broadband Network, this committee was set up in June 2008 to inquire into the government’s then announced national broadband network policy. This committee has had almost 10 days of public hearings. We have received almost 40 written submissions and we tabled our first interim report in December last year. This is our second interim report. The committee has chosen to table this second interim report to summarise the road thus far, given its recent fork. I am referring of course to the government’s announcement on 7 April this year to essentially abandon its National Broadband Network round 1 policy promise and replace it with another, to which I will refer as its National Broadband Network round 2 promise. In the process, it terminated the request for proposals underway under NBN round 1 and it arguably wasted some $20 million of taxpayers’ money and some 18 months of time, during which consumers waited to see how the government was going to deliver on its promise with respect to NBN round 1.

The desertion of NBN round 1 by the government left many questions unanswered, a number of which have been teased out through the work of this committee. They include the ‘Who?’, the ‘What?’, the ‘When?’, the ‘Where?’, the ‘Why?’, the ‘How?’ and the ‘How much?’ In terms of the ‘Who?’, NBN round 1, said the government, would reach 98 per cent of Australians. Yet the government repeatedly refused to demonstrate to the population who was in the 98 per cent and who was in the left-out two per cent. They repeatedly refused to demonstrate, ‘Was city or country in?’ or, ‘Was the 98 per cent based on per capita or households or businesses or premises or something different again?’

In terms of the ‘What?’, the government repeatedly refused to show with any clarity whether people would get the promised minimum speed of up to 12 megabits or something different. The government was unable to stick to its time frames in terms of the ‘When?’ The tender process was treated as an elastic process, by way of example. With respect to the ‘How?’ was it to be fibre to the home or was it to be fibre to the node? Were the services and access thereto to be rolled in or rolled out? Was the then National Broadband Network round 1 to be delivered in partnership with the private sector, as promised, or something different? At what cost? The government postulated that it would cost some $4.7 billion, yet this committee heard evidence from experts that it would cost that and then some, and that is under the government’s NBN round 1. At what price for the consumer? Was the consumer to be invited to pay more for the same or less? These questions remain unanswered.

These questions are much the same as those now posed by NBN round 2, but the thing about NBN round 2 is that it is a bigger promise and then some, and this government’s bigger promises come with even bigger questions. They come with the ‘Who?’ The government says that 90 per cent of Australians will now get fibre to the home. The government has yet to show who will be in the 90 per cent and who will be in the 10 per cent. Ten per cent of the Australian population is some two million Australians. The government says that towns and cities and communities with populations of less than 1,000 will not be in the 90 per cent. When you look at the names of the towns and cities and communities that the government has proffered as being those who will be left out of the 90 per cent, you get 103 towns in South Australia and some half a million Australians. Where is the government hiding the other 1.5 million Australians who are in the 10 per cent and who ain’t going to get and ain’t going to be part of the 90 per cent fibre to the home? Just as Minister Conroy failed to show us his nodes with NBN round 1, he is failing to show us his maps with NBN round 2. The Australian community deserves to know that. They deserve nothing less.

Then there is the ‘What?’ The government is promising users speeds of up to a hundred times faster than they are currently getting. Rural and regional Australians, and in particular rural and regional South Australians, know that a hundred times nix is still nix. ‘When?’ The government is suggesting it will take some eight years to deliver on NBN round 2 at best guesstimates thus far. Others suggest it is going to take as long as 10 years. The government’s implementation study, says Minister Conroy, is to be finished by the end of this year, yet the government’s advertisements—under the hand of its department—published on recent weekends, advertise for a consultant to undertake the study, with the study to be completed in the early part of next year. The time frame is already being treated as elastic by the government.

Then there is the ‘Where?’ Where is this going to happen? Tasmanians are to be congratulated. They are being promised by our Prime Minister ‘top tier’ in terms of the National Broadband Network. The Prime Minister says that it is possible to do in Tasmania what he is now promising by way of ‘top tier’ and says that it is ‘not necessarily possible’ in the rest of Australia. Well, ‘not necessarily’ displays that he knows that it is possible in some other places for some other communities for some of the time. Who are those people? Where do they live? And where is the government’s plan to deliver in those other places where it could be possible?

‘How?’ Will this NBN round 2 be delivered in partnership with the private sector or will the private sector sit back and wait and see it fail and then wait for the government to entice it to participate? ‘At what cost?’ The government has steadfastly failed to provide a commercial case for NBN round 2, which is projected—even on the government’s own say-so—to cost almost tenfold what NBN round 1 would have, at some $43 billion. ‘At what price for consumers?’ At this stage the experts are saying ‘some two to three times the price that consumers currently pay for services with which they are provided’.

In NBN round 1 the government was spectacularly successful at muzzling the participants in the process with a formal commercial-in-confidence gag during the tender process. The difficulty with NBN round 2 is that there is no formal gag at this stage but rather there is an informal one generated by the lack of certainty—by which potential stakeholders and potential participants in the industry would of course be best advised to keep their powder dry. So they stay silent, with effectively a muzzle that is even more pervasive and arguably even more powerful than the formal gag applied by the government in NBN round 1. With NBN round 2 and its bigger promises come bigger questions. The government’s promise deserves scrutiny, the government’s policy deserves scrutiny and the government’s process deserves scrutiny. I commend the report to the Senate. (Time expired)

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to speak to the second interim report of the Select Committee on the National Broadband Network and specifically to note that the government senators have prepared a minority report. We have done that for a very good reason—that is, because on 7 April 2009, as we have heard many times in this chamber already, the government announced that it had terminated the National Broadband Network request for proposals process on the basis of advice from the independent panel of experts that none of the national proposals offered value for money for the Commonwealth.

The history of this committee dates back to prior to the coalition losing their control of the Senate. The select committee was established with a structure the opposition have used to completely dominate the numbers on the committee. I do not think that has impacted too much on the substance of the material that we have received from witnesses but it really belies the underlying purpose of this select committee inquiry into the National Broadband Network. We have an opposition scratching around for relevance in one of the most critical areas of public infrastructure that we as a government have had to deal with for a long time.

It is well and truly on the record that Labor’s policy for a national broadband network as announced on 7 April is the largest investment in public infrastructure, and rightly so. It provides the economic foundation for the future. It is truly economic infrastructure. We have done this with vision and foresight on the back of a very long period, under the former Howard government, of neglect and ad hoc policy servicing the needs of the privatisation agenda of a monopolistic telecommunications company that we all, as Australians, are paying a price for.

The opposition makes a comment with respect to this report about questions remaining unanswered, and yet this very inquiry was set up to parallel the government’s process in setting out the request for proposals. Now that we have announced our policy and have been very clear about our implementation plan—and we remain completely committed to consultation with all of the stakeholders and providing opportunities, as we have said in our minority report, for appropriate scrutiny of associated legislative processes with the progress of the National Broadband Network—I am at a bit of a loss as to why the opposition appears to be so adamant about questions remaining unanswered. Those processes are in train and it seems to me that, as a platform for wanting to somehow appear relevant, the opposition are attaching themselves to the National Broadband Network process. It is quite pathetic. I had cause earlier today at CeBIT to reflect on the more than a decade of neglect in telecommunications policy and the fact that it has been the Labor government that has had, as I said, the vision and the foresight to step up and put this forward.

Just to clarify some misleading information provided to the Senate, the government’s National Broadband Network proposes to connect 90 per cent of all Australian homes, schools and workplaces with broadband services with speeds of 100 megabits per second but all other premises—and this is a very important point—with next-generation wireless and satellite technologies that will deliver broadband speeds of 12 megabits per second. This is way above our previous commitments. I do not accept, and Labor does not accept, any criticism by the opposition when it purports that somehow we are not honouring our election promise. We are going far beyond our election commitments with the fibre-to-the-premises National Broadband Network as announced on 7 April. I should also say that this comes at a time when we need this investment. Our economy needs this investment. It will provide up to 25,000 local jobs every year on average over the eight-year life of the project. In that regard, this is indeed a very worthy and timely investment.

The other issue I want to talk about is the substance of the evidence from the witnesses received in the course of the inquiry. I am very happy, as the chair and other members of the committee know, to acknowledge the contribution of the range of stakeholders—witnesses, academics and members of the community—who took the time to make submissions to the inquiry. Regardless of how the opposition chooses to twist their representation of the evidence that we received, the evidence was in fact incredibly valuable to the government. We would like to acknowledge that, despite our concern and despite not concurring with the non-government senators’ recommendations, we were grateful for the input by the range of witnesses. Many of the issues they raised informed the government’s decision to proceed with a fibre-to-the-premises network rather than a fibre-to-the-node network—as well as, importantly, the wholesale nature of the National Broadband Network as it was announced. Those who participated in the inquiry would know that it did cast a forensic eye across some of the weaknesses of the fibre-to-the-node network—at the time I think rather to the glee of the opposition as they tried to tear down our policy. In fact, our vision was true and the policy as announced recognised the limitations of a fibre-to-the-node network. Hence, our very sound and future-proofed decision to proceed with a fibre-to-the-premises network.

I too would like to thank the secretariat of the committee for their hard work, and I also thank Jonathan Chowns. There were a wide range of technical issues to absorb and represent. I commend the government senators’ minority report to the chamber. We feel that it is an accurate reflection of the substance of the matter. The evidence collected through this inquiry is a powerful and immensely important validation of Labor’s National Broadband Network policy. Points were made about the need for a future-proof network, and the issue that came out was that the speed—the 12 megabits per second—represents a tenfold increase on what people are getting with broadband. But there was acknowledgement through our policy that great speeds were needed if we were going to genuinely future-proof this public investment, and we have been able to respond to that profoundly with our visionary policy for a national broadband network.

I urge people to read the transcript and understand the evidence that was put forward. Despite an opposition scratching around for relevance on this one, they are still in the broadband black water. I still get emails from people who are aggrieved and who are essentially victims of 10 years of policy neglect by the previous Howard government, which Labor will now rectify with our visionary plan for a national broadband network.

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I agree with the former speakers that the Senate Select Committee on the National Broadband Network played an exceptionally useful role, particularly given that the RFP was conducted in something of a vacuum. I take the point that both the previous speakers have made—that the evidence provided to the committee was extremely valuable, although obviously now, interestingly, there is some dispute about whether the committee should continue to provide that oversight role. I think it has been a very useful task that we have undertaken. We have taken good evidence and engaged a range of experts and stakeholders from across the industry and from the community. I appreciate Senator Lundy’s acknowledgement that the evidence that we took and the work that we did informed the outcome of the RFP.

The situation has changed quite dramatically. We have a project which is essentially ten times the scope of what was proposed during the election campaign. The Australian Greens believe that the logic of making such a bold investment is sound, and we are also pleased that the government has concurred, at least in the interim, with the Greens’ view that the network should be publicly owned. I will come back to that at the end of my remarks.

I was a bit surprised to hear the minister this afternoon in question time, I think in response to a question from the Leader of the Opposition, essentially rebutting the need for any formal cost-benefit analysis or economic modelling as to the benefits or otherwise of such a project. The minister now has a very delicate balancing act before him as to whether the taxpayer is going to be getting value for money for building the network and what that actually means in the way of cost for the end user purchasing bandwidth from the NBN. I find it impossible to imagine that the project was announced without such modelling being undertaken at least in some form.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

I would not be surprised.

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I certainly look forward to the production of that work if it has been undertaken, but, if the government does not intend to do this work, I think it would be a valuable role for this committee to play in the future.

One of the key roles for the committee in the future, as the chair of the committee, Senator Fisher, has indicated, concerns the 10 per cent of the population that will be left out of the fibre-to-the-premises proposal. I do not think that anyone has yet proposed running fibre to every door in Australia. But the question then becomes: to what degree will the remaining communities be left with a service that is up to eight times slower than that in the metropolitan areas? The relative speed of the network in regional and metropolitan areas is very important because there will be services delivered down this system that we, in 2009, cannot even conceive of yet. So the relative speeds delivered to regional areas will remain of extreme importance. Will this project further entrench the digital divide or, for $43 billion, can we do better than an eight to one performance gap between those with and those without?

Finally, to return to where I began, why the government would want to embed a privatisation trigger in a project of this kind is a bit beyond me. We already heard Senator Lundy’s reference to the privatisation agenda of the previous government and yet we find in the minister’s and the Prime Minister’s announcement of the expanded NBN project exactly such a trigger embedded in this project. So we draw the Senate’s attention to the heading ‘Ownership’ at section 3 of the report, which essentially draws these questions to the attention of the committee when it refers to five years after the completion of the NBN. What does ‘completion’ mean for this kind of infrastructure? You might as well talk about the completion of the road network. What does five years after completion of the NBN mean? What rationale is there to re-privatise the network, given that we are here today because we are cleaning up, in part, the mess from the privatisation of an essential service?

There were very few details on the conditions which the government would set as a trigger to sell off the network and the nature of essential public services being offered on a for-profit basis, where the interest of shareholders will not always coincide with the public interest. So I very much look forward to the committee continuing to play the extremely valuable role that it has played so far. I would like to acknowledge the chair for her work, Senator Lundy for keeping things on track, and the hardworking staff and secretariat of the committee. I look forward to continuing its work.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

As a participating member I also welcome the production of this second interim report of the Select Committee on the National Broadband Network. I also join Senator Ludlam in congratulating Senator Fisher on her outstanding chairmanship of this committee and for the very good recommendations that are made in the second interim report. I commend them to the government and I look forward to the government acting on those recommendations.

This report confirms the fiasco that has become Labor’s national broadband network policy. Senator Conroy, the Minister for Broadband, Communications and the Digital Economy and Deputy Leader of the Government in the Senate, has presided over the complete collapse of his election policy. We had Senator Lundy here today essentially admitting that this committee, which the government opposed, has been the vehicle by which the failure of this mark I NBN policy of the government’s has been exposed as a complete and utter failure. Of course, it does not surprise us at all that it has failed so comprehensively, because the then Labor opposition simply wrote this policy on the back of an envelope in the lead-up to the last election, having lifted the policy from the proposition that Telstra put to the former government. And even the contribution of $4.7 billion which the Labor government proposed to make was a straight lift from Telstra’s original proposal to our government to have a subsidy for a fibre-to-the-node network. The Labor Party did no analysis or work on a fibre-to-the-node network—as to how or whether it could be built. It simply went to the election having stolen that particular policy.

In our view the whole tender process which this government embarked on was doomed to failure from the outset. Indeed, the minister was completely humiliated last December by his own department, excluding the current operator of the current broadband network in this country—and I refer, of course, to Telstra—despite his boasting widely, both publicly and privately, that he had a very flexible process that would allow anybody to put any sort of bid in and that non-conforming bids would of course be considered. It was not, of course, the minister who excluded Telstra. It was the departmental secretary who acted upon no fewer than five sets of legal advice to remove Telstra from the process despite it being obvious that, at the end of the day, Telstra were the only company capable of building a fibre-to-the-node network in this country. And to be excluded on the basis that on the day they submitted their tender they did not submit a small business participation plan is ludicrous in the extreme.

So 18 months after this government was elected, and after the expenditure of $20 million of precious taxpayers’ money, the whole of Senator Conroy’s mark I NBN plan has completely collapsed in a heap and there is nothing to show for it. Indeed, in the 18 months that he has been the minister, Senator Conroy has done nothing to advance the cause of more access to broadband by Australians. All he has to show for it is $20 million of taxpayers’ money down the drain on this failed tender process, and the insult to the residents of rural and regional Australia by his wanton cancellation of the contract which our government signed with Optus and Elders to bring high-speed broadband to a million residents of rural and regional Australia at a cost to the government of $1 billion with an investment by that consortium of $1 billion. That has all gone. That would have almost been completed by now and there is nothing to show for it whatsoever.

In what can only be described as a flagrant and extravagant cover-up of the failure of that particular policy, this government has come out with the extraordinary announcement that it is going to create another government entity to spend $43 billion on extending fibre to 90 per cent of Australian residential and business premises. This is the most extraordinarily reckless and irresponsible policy announced on the run we have seen, I think, in this country’s history. As Senator Ludlam pointed out, when I asked the question today about the cost-benefit analysis, ‘Oh, no, we don’t have to do a cost-benefit analysis. We are just going to spend $43 billion but who needs a cost-benefit analysis’ to spend—as they boast—the biggest single infrastructure investment ever proposed in the history of this country. There is no business plan and yet the government asserts that this will be a commercial investment. If it had come out and been honest and said, ‘Look, it will never be commercial but we think taxpayers should subsidise it anyway and we are just going to go ahead and build it,’ that would be one thing. But it has come out and said that this will be a commercial exercise, done through this public-private partnership which will eventually be privatised. No-one in this country has ever established that fibre to the premises could possibly be a commercial business proposition in this country. We believe that there is no prospect whatsoever of commercial viability. For it to be commercially viable, the prices you would have to charge would be such that nobody could afford to use it.

What they are proposing is the effective renationalisation of the fixed line network in this country which may, as I detect from Senator Ludlam’s remarks, please him. But it certainly should not please the rest of Australia to have the renationalisation of a fixed line network in this way, particularly when there will be some $20 billion at least of taxpayers’ money put at risk in an investment in a particular fixed line technology which many have noted will take another 10 years to roll out. And by then we have no idea what the capacity and possibilities will be with alternative communications technologies—most particularly, of course, mobile and wireless. There is a massive flight from fixed line to mobile and wireless broadband going on right now. What will it be like in 10 years time when this thing is finally built? I suspect this will be one of the all-time great white elephants this country has seen.

The government, very secretly, is not even putting into this the $4.7 billion which it only has because of our sale of Telstra through the Communications Fund and the proceeds from T3. They are not even going to put that in. They have very secretly decided that they are only going to put in the $2.4 billion from the Communications Fund and borrow the rest. The whole process is shrouded in secrecy. We are not going to be shown the expert panel’s report upon which this is based. We are not going to be shown the ACCC report.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.