Download PDF

SENATOR THE HON STEPHEN CONROY Minister for Broadband, Communications and the Digital Economy

Leader of the Government in the Senate

Minister Assisting the Prime Minister on Digital Productivity

TRANSCRIPT

DATE: 09/04/2013 DOORSTOP IN GUNGAHLIN TOPIC: NATIONAL BROADBAND NETWORK; MEDIA.

STEPHEN CONROY: Right well good morning and thanks very much for coming. I should start off, of course, by acknowledging Dr Andrew Leigh the Member for Fraser, covering Gungahlin, and one of our newest Parliamentary Secretaries - he's Parliamentary Secretary to the Prime Minister. Andrew Heslop here with me, an ACT broadband champion, and of course Tom Armitage from NBN Co, on all the guys working on it with Silcar and NBN Co, so thanks to all of them. Let me, as I said, start off by congratulating Andrew on his promotion to be Parliamentary Secretary to the Prime Minister.

Canberra is a smart city full of opportunity. Young people are moving here to start their families and create new futures. It's home to world-class universities and research facilities. It's where some of the nation's greatest minds come together to find innovative solutions to our biggest challenges. Not bad for a city that's just celebrated its 100th birthday. And it's great to see the progress of the NBN here in Gungahlin. It's exciting to see the NBN rolling out in local streets, not just for families but also for schools and businesses. Canberrans get why we need high speed broadband. They understand that it's going to make a smart city even smarter. They realise that for Australia to reach our full potential in the digital age, we need Labor's NBN.

The NBN in this area, as some of you would know, we recently turned it on, has already been switched on for over 4000 homes and businesses here in Gungahlin. And let me tell you, this is the record breaking area, after just two months, 33 per cent, one third, 33 per cent have ordered the NBN, which is absolutely the best take-up rate anywhere in Australia so far. Work on the fibre network is also underway in around two and a half thousand premises, just nearby in Palmerston, and we expect these homes to be ready to be switched on in June. Across the ACT, work on the fibre network has commenced to more than 20,000 homes and businesses, already commenced. And across the country we're already seeing the benefits of the National Broadband Network.

It is transforming the way our children learn, creating interactive, online educational opportunities never before possible. And the NBN has allowed the Harrison School here in Gungahlin to hold a live link-up with a Japanese school, and participate together, as some of you would have seen last time we were out here. It's giving Australians the education that they need for the digital age, whether they are at school, university, or learning a trade. The NBN is making businesses more competitive,

helping them grow and launch into new markets here and overseas. Entrepreneurs are using high definition teleconferencing and high speed file transfers to cut costs, boost productivity, and reach more customers. It's creating new jobs, and helping families achieve work-life balance by allowing parents to telework from home.

The NBN is also revolutionising the way we access healthcare. Tele-monitoring means that older Australians and people with chronic conditions can access the services they need without leaving their homes. But only, and I absolutely want to stress this, only a superior world-class fibre to the premise network can deliver the speed we need to harness these opportunities.

Now there's often a debate about the take-up rate of the NBN, and I've seen all sorts of quite comical commentary. Well let me tell you, not just here in Gungahlin, which as I said is the best take-up so far, but across Australia take-up's been strong. In areas where the NBN has been connected for over 12 months, take-up is over 30 per cent, over 30 per cent. Compare that to the take-up of the HFC network, one of Malcolm Turnbull's pride and joys. After 15 years the HFC network only has been taken up by 34 per cent of Australians. So, 12 months NBN, 30 per cent, 15 years HFC, 33-34 per cent.

And for those who want to talk about the cost of the NBN, and I see there's a little bit in the papers today about the costs, well I refer you - I suggest you go to the research recently released by the consumer movement, ACAN, on customers in Brunswick, and what did they find?

70 per cent of NBN customers were paying less or the same as they were before. And those paying more were obtaining a higher level of service, with higher download capacity, higher speeds, and higher limits. So customers using the NBN are also connecting more devices to the network, and this is where Malcolm Turnbull and their version of a broadband network fails miserably.

If you understand broadband, if you understand that it's being used for more applications, that require more bandwidth every single day, then you know that Malcolm Turnbull's network is a fail. The only limitation will be a broadband plan that does not build capacity for the future. Malcolm Turnbull is going to build a one lane Sydney Harbour Bridge, because he says he can do it cheaper and faster. Well yes, in 1927 they could have made a decision to build a one lane Sydney Harbour Bridge. But fortunately for the people of Sydney, they thought about the future. They had a vision for the future of the city of Sydney, and they built the icon that is the Sydney Harbour Bridge.

And I do understand - I've read in the Liberal Party's press journal, known as The Daily Telegraph, that later today Mr Turnbull will be releasing the Coalition's broadband policy. Well the Coalition is planning to disconnect nine million Australians from Labor's NBN. Disconnect nine million Australians from Labor's NBN. The Coalition consistently display an ignorance of the role of high speed broadband, and the role that it will have in the future. Study after study has demonstrated the social and economic impact of high speed broadband and why it is the critical infrastructure that this country needs in the 21st century.

But the Coalition doesn't want to build for the future. Tony Abbott says Australia can't afford to have the best communications system in the world. Well Labor says, we can't afford not to have it. They are so short-sighted, that they only want to build a broadband network for today. They don't think about the applications, the extra connectivity, the extra machines, the extra devices that will be connected up by all of you here, all of our children in the future, they don't think about that.

Mr Turnbull has said that if you really want high speed broadband, and he confirmed this this morning on radio, if you really want high speed broadband, if you want Labor's NBN, you just have

to pay for it out of your own pocket. He cites, as many of you know, British Telecom, BT's model in the UK, where BT is charging up to $5000 to connect fibre to the home, $5000. So Mr Turnbull's message this morning on radio, to small businesses, to home businesses, to every school kid is: unless you can afford $5000, you don't get Labor's NBN, you get a second rate broadband network which cannot deliver the needs of your small business, or your kid's education.

And I do want to congratulate, as I said, everybody on today's event. It is good to be back here in Gungahlin seeing Canberra take its next step on its broadband journey. This is a city that has achieved much in its hundred years and it will achieve so much more if Labor is re-elected so that we can continue to build the infrastructure for the 21st century.

Thanks very much. Any questions?

QUESTION: Last night on Lateline you suggested that one of the biggest problems at the moment with the roll out is that there's not enough workers being put on to build the NBN. Can you just elaborate on that a bit more?

STEPHEN CONROY: Well, what our experience has shown after the last 18 months is you need X number of people to build - sorry - to build and connect the NBN to the homes. And the companies through the period December, January, and into February just didn't have enough people on their books literally hired to reach the target that we were aiming for by 30 June.

So, this is figures that were being supplied by the companies who say no, no, we'll get there, we'll get there, we'll get there. Well, by about late January, early February, and through February, NBN began to think that there weren't enough people - there wasn't enough construction happening on the ground around Australia.

So they made some tough decisions. They stepped in to Darwin. They've taken back the contract from Syntheo in Darwin. They've recovered two and a half million dollars that was paid up front to mobilise a workforce because clearly in Darwin they hadn't mobilised a workforce.

So the issue has been that they haven't been able to ramp up as fast they would want and so NBN Co made some tough decisions, stepped in. You've got to remember this is for the targets at 30 June. So in three months’ time, we're back in March, it's three months ahead. NBN Co had come to the conclusion that there weren't enough people working on the job to achieve those targets so they made some hard decisions.

QUESTION: Is it possible the capital cost of the NBN would go over $37.4 billion?

STEPHEN CONROY: Look, at this stage we've signed over $10 billion worth of contracts. We're in the process of renegotiating the labour contracts at the moment. But my advice from NBN Co, and I've been through this fairly rigorously, is that that is the cost that we can build this network for over the ten years.

Claims about cost blow outs have not been substantiated. They've just not been substantiated. The sort of claims that The Daily Telegraph prints ad nauseam without any reference to facts, without getting in touch with my office, and just printing as the truth Coalition claims about blow outs is just not journalism.

These are false and fanciful figures. They're concocted figures. Malcolm Turnbull is becoming the king of telling a lie using a fact. He reaches into the NBN Co report, he gets a graph called average

revenue per user or ARPU and says look, it shows that prices are going up. ARPU's not a price. NBN Co today in the marketplace has prices - well, not NBN Co, but retailers have prices of $29.95.

Malcolm Turnbull in The Daily Telegraph today is saying he expects a retail price $66 a month. Well, today here in Gungahlin, people are connecting to the NBN for $29.95 a month. So Malcolm Turnbull is actually promising to double the price of the cheapest plan in the marketplace today. He's not comparing apples with apples, he is telling lies by using statistics.

QUESTION: Your advice from NBN Co was that they'd get to 286,000 homes passed by 30 June. The changed their advice [indistinct]…

STEPHEN CONROY: That was based…

QUESTION: But they lowered the target on the homes part, why can't they give you renewed advice after the election that shows that the cost is going to go higher?

STEPHEN CONROY: Well, I'm not sure what conspiracy world you're living in, David, but this is a board that is - has to operate by the laws of the land. There are laws and requirements, statutory obligations, for government business enterprises. And one of them is not that they lie to the government in the way you're suggesting.

QUESTION: No, I didn't suggest [indistinct]…

STEPHEN CONROY: Yes you did. You just said why didn't they give you updated advice after the election?

QUESTION: No, no, no.

STEPHEN CONROY: I'm saying to you is the advice they've given us is based on all of their existing contracts…

QUESTION: But you can't rule out…

STEPHEN CONROY: …and they their futures.

QUESTION: But you can't rule out they're…

STEPHEN CONROY: Well, I can't rule out that the world's going to end tomorrow but if you're at The Australian you probably think you can.

QUESTION: No, but you can't rule out…

STEPHEN CONROY: But let's be clear, David. The advice to us today is that the contracts which they signed - over $10 billion worth of contracts are signed and in place. The construction contracts are being renegotiated at the moment. But the overall capital cost of 37.4 million remains their advice.

The delays that you're referring to are about the inputs coming into NBN Co from the companies that they've hired. The price that has been negotiated is not being argued about. What's being the problem is a mobilisation issue and the companies are moving to address that. And I think when you

see the next set of statistics, you'll be quite surprised because Malcolm Turnbull, I heard him on the radio again this morning, saying there's been no homes connected.

Well, Malcolm's in a for a bit of a surprise when the next stats come out very shortly and he'll be in for a bigger surprise each week and each month as we move towards the election because all of the companies that have been involved in the discussions with NBN Co are now in a process of ramping up and starting to pass multiple, multiple, hundreds and thousands - not hundreds of thousands, but hundreds and thousands - of homes as we speak. You'll be quite surprised to see the ramp up is starting to come into play.

Is it starting fast enough? Should it have started ramping up faster in January and February, yes. And that's why the NBN Co's board made the decisions they made because they've sat down with the companies, gone through it with a fine tooth comb, identified what the bottlenecks were, worked with them to solve these problems. And now we believe we are on target by September to meet that figure that is being quoted.

But this is a ten year build. This is a number of the three months that they are running behind at the moment can be made up by 2015. In a ten year build, this is a political debate about can they meet a target by June. Well, NBN Co identified that they weren't. NBN Co took action. NBN Co intervened in Darwin. NBN Co got money back. And they've now got a revised set of forecasts.

QUESTION: Can I ask…

QUESTION: Will broadband be a defining…

STEPHEN CONROY: Sorry, one at a time.

QUESTION: Will broadband be a defining difference between the major parties at the election? And how can you fight a policy that's promising to be cheaper and faster?

STEPHEN CONROY: Well, it's going - as I said, it's promising retail prices of $66 per month. It's - when you can buy it for $30 per month today in the marketplace. It's promising to allow people to be charged more if you live in the regional Australia. So, he's actually said oh yeah, no, people will be charged more in the bush than they will in the city.

If you want policies - a policy difference between the two parties, Tony Abbott and Malcolm Turnbull are going to disconnect nine million people from Labor's NBN. They're going to leave the copper. I've got to say I can't find a dumber piece of public policy than buying the copper off Telstra. I mean, come on down Alan Bond. Kerry Packer would be laughing all the way to the bank if he found a mug willing to buy Telstra's copper network.

This is a network that they estimate costs about a billion dollars, one billion dollars a year just to maintain. You all live here in Canberra. The copper network in the ground is ageing and decaying and cannot deliver the speeds that Malcolm Turnbull keeps claiming. He keeps claiming he's going to build the nodes, you know, 400 metres or 800 metres or a kilometre. Well, I'm looking forward to seeing what he's actually going to do, but it doesn't matter if your copper in the ground is degraded because it's been raining and there's water. It is actually something that happens occasionally in Australia, particularly in the northern parts of Australia.

So, the speeds he's going to claim today are defying the laws of physics. They're defying the quality of the copper in the ground. If you want to get Labor's NBN he wants to charge you up to $5000 per

home. So yes, I think there will be a massive division. I mean, Malcolm Turnbull's trying to pretend he's building Labor's NBN. He keeps saying oh no, we'll build the NBN. We'll build the NBN. He's not building a national broadband network at all. Two point four million homes in the HFC footprint, that's 2.4 million Australian homes today in metropolitan Australia will have no change in 2019.

He's not planning on building anything in the footprint of 2.4 million homes. That's 2.4 million homes not getting any change. You're stuck on the copper or you can take the HFC, which you can take now. If you live in a multi-dwelling unit, a block of flats, in that footprint you can't even get the HFC table. So people who live in blocks of flats in metropolitan Australia getting no change to a [indistinct]. He's going to spend $20 billion and millions of Australians are going to get no improvement and no change.

QUESTION: Isn't it a false claim to say that he's going to disconnect nine million?

STEPHEN CONROY: I said he's going to disconnect - no…

QUESTION: When you don't have nine million connected he won't [indistinct]….

STEPHEN CONROY: No, Labor's plan - no, that's absolutely false, David, and that's just absolutely untrue. Labor's plan - this is a comparison between Labor's plan and the Coalition plan. Labor's plan is to connect nine million homes to fibre to the home. That is your choice. The choice Australian people have is do you want nine million homes connected to the National Broadband Network fibre to the home or do you want nine million homes not connected to Labor's NBN fibre to the home? It's a very simple test. We will connect nine million homes. He will not. He is going to disconnect - if you vote, you are disconnecting Labor's fibre to the home NBN.

QUESTION: But you haven't connected them yet.

STEPHEN CONROY: Our plan is to connect them. His plan is not to, David. You can't get away from that.

QUESTION: [Inaudible question]

STEPHEN CONROY: You can - no he's not. He's not connecting - we're talking about the nine million homes he identifies himself, this morning in The Daily Telegraph, as getting fibre to the node. That's the nine million homes I'm talking about. These are his numbers. Fibre to the node, nine million people, that's what he says in the paper today. That's his number. That's nine million Australian homes not getting fibre to the home, Labor's NBN. He is disconnecting those from Labor's NBN.

QUESTION: Can I ask how…

QUESTION: [Indistinct] wondering if you're getting 25 megabits per second what are you missing out in if you can't get 100 megabits per second? [Indistinct]

STEPHEN CONROY: Somebody recently, in the last few years, said I don't think there'll ever be a need for more than five, you know, five computers in the world, because they didn't think that people would innovate and develop. Well, I'm willing to back Australians, that their innovation, their ability to use the National Broadband Network to create new things that you and I haven't thought of yet, but if you want to talk about the sort of services that are not able to take full advantage under his plan it's health services, it's education services.

You need stable connectivity to be able to do the sort of telehealth conferencing that you can do across every home, and what Malcolm Turnbull's network can't do across every home is deliver the stability of a fibre connection if you happen to live on a pair gain, if it happens to have rained and it's water in your - the pits in front of your home that's affecting the copper, if you happen to live behind a rim at the moment, or if it's at a pair gain, or the copper's just decaying because it's old, you can't deliver the stable service to get the health, to get the educational services that our kids need and our patients deserve.

And that's where Malcolm Turnbull is trying to defy the laws of physics. A bloke convinced me many years ago, an old bloke, an engineer, knew a bit about the telecommunications industry, and he used to say to me “You cannae defy the laws of physics”. Well, Malcolm Turnbull is trying to defy the laws of physics. He's making promises his network can't deliver.

QUESTION: There are reports today that you're tipped to retire at the next election. Will you?

STEPHEN CONROY: No. I did see that. I mean, that's just part of unfortunately a bit of smear campaign that's been going on in Gellibrand. It's been very disappointing for these very, very grubby tactics employed by some people behind the scenes, and I absolutely condemn them, and part of that tactics is to say that Steve Conroy's retiring. I can give you a categoric guarantee I am not retiring…

QUESTION: Can I ask…

STEPHEN CONROY: …at the next election.

QUESTION: Can I ask about the NBN contracts that are currently in place: how watertight are they, and if the Coalition were to win the election could they easily break the contracts?

STEPHEN CONROY: Well, look, all contracts can be broken by convenience. I mean, Malcolm Turnbull's announced today that he's not closing down Optus's network. Optus are going to be paid ultimately $800 million to transfer customers from their Optus HFC network to NBN Co's fibre network. Now, he's saying they're not closing down the network and there is no fibre network in that footprint. Now, he's saying they're not closing down the network and there is no fibre network in that footprint to transfer the customers to, so Optus are now faced with a circumstance where they've got an $800 million deal with this Government and Malcolm Turnbull's said he's not going to be closing down the Optus network, and he - by definition there's nothing to pay Optus for if they're not transferring customers onto the pieces of fibre.

So yes, you can break contracts if you're prepared to pay the price for breaking them. Has NBN Co got booby traps in them? Absolutely not. The board of NBN Co is some of Australia's most prominent businesspeople. They are responsible, they are bound by a whole range of guidelines and laws about how they can behave, and they're not in a position where they can just deliberately sabotage future incoming governments. They're absolutely not in that position, so yes Malcolm Turnbull can terminate contracts and, of course, like any contract there's always a termination break.

QUESTION: Could I just quickly ask you about the - your reaction to the [indistinct] Labor?

STEPHEN CONROY: Well, I think that the last few Newspolls have been taken during a period where it's a fairly tough time. We've had a lot of self-inflicted wounds, a lot of navel gazing, and I've always said if the Labor Party wants to spend its time talking about itself the Australian public will rightfully mark it down, and I think that's what those Newspolls a few weeks ago reflected, and they

justifiably reflected an obsession with the Labor Party to talk about itself. We've gone past those issues, and now we're starting to see a more normal view. But yes, I fully expected those polls at the time to show that the Australian public believe that we were absolutely self-centred, not interested in the Australian public, and they marked us down, but you're starting to see a return to a more normal politics with those issues put behind us.

QUESTION: Will you take a media policy to the election?

STEPHEN CONROY: Yes. We only just a few weeks ago, as I said last night, failed to get our policy through the Parliament. We'll have to have a think about that for a while, but we'll be taking a policy through to the election. But have we sat down yet and formulated it? No, it's only a couple of weeks ago that we were unsuccessful in Parliament.

QUESTION: Will it include the public media?

STEPHEN CONROY: As I said, the policies that we put forward then are dead. We have moved on.

QUESTION: Would it include the 75 per cent reach rule [indistinct]?

STEPHEN CONROY: Well, the committee is still looking at that. I'll see what the committee report comes back. It hasn't recommended it to the Parliament at this stage. It wouldn't have the numbers to pass is my understanding, but the committee is still examining that.

QUESTION: On the NBN, do you think that if Malcolm Turnbull changed plans in terms of rolling out in the HFC areas with Telstra and Optus that he…

STEPHEN CONROY: Well, he said…

QUESTION: …would be - hang on, sorry. Would he be exposed to legal action from Optus or Telstra if he - not if he terminated the contracts but changed some of the terms?

STEPHEN CONROY: Well, as I said, you can change terms with agreement. I mean, any contract can be varied if both parties agree. What I'm saying, though, is Optus have agreed to transfer customers into a fibre network, so if there's no fibre network to be transferred on to then what would you be paying Optus for?

Okay, thanks very much.

* * ENDS * *