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Wednesday, 24 August 2011
Page: 5436

Senator LUDLAM (Western Australia) (19:18): While the minister collects his thoughts, I thank Senator Birmingham for his careful answer to my question. I do not propose to dwell here, but I want Senator Birmingham and the coalition to understand that I have not dismissed this amendment lightly. I genuinely do not think it will work and I do not understand how commercial negotiations can take place, if you can call them negotiations under the terms set out here.

In your proposed section 372CA(8)(b), you propose that, in drawing up this scale of payments, the minister should 'take into account the costs the NBN Co. would have incurred had it undertaken to provide such networks itself'. You have also been at pains to point out that, by definition, NBN Co. would have incurred much lower costs if it was providing such networks itself. It will be leveraging gigantic economies of scale, which is why this competition argument is such a vexed one. How is the minister meant to take that into account? And what happens in the event of a dispute, where the NBN Co. and a third party provider disagree on the price that the minister has set? I think this is a recipe for enormous disputation and I do not understand how it would work in practice.

Progress reported.