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Thursday, 24 November 2011
Page: 13769


Mr TURNBULL (Wentworth) (10:56): by leave—I join the chairman, the member for Lyne, and the deputy chairman, the member for Petrie, of the Joint Committee on the National Broadband Network in thanking the secretariat and wishing them and all the 57 members of the committee-as the chairman reminded us we have—a very Merry Christmas and a break from surveying the NBN for at least a few weeks over the holiday period.

However, I must observe that the quality of the reporting and accountability of the NBN Co. remains inadequate. This has been the subject of some criticism and commentary in the report. There are fundamental questions associated with the rollout of the NBN that the NBN Co. has declined to respond to in any meaningful or cogent way. The NBN is so expensive because of the decision taken by the government to build this new telecommunications network, this new broadband network, by connecting households directly with fibre. It is well understood that the vast bulk of the cost of any new telecommunications rollout is the civil works and, obviously, the more of that civil work component there is, the more expensive it is. That is why in most markets around the world—almost all markets, in fact—telcos and governments are using a variety of technologies to get the most cost effective upgrade of broadband services that they can.

The committee has sought to get some coherent, detailed answers from the NBN Co. as to why it is not considering other technological approaches, in particular the approach of fibre to the node, which, as the House has heard me say before, in the UK will nonetheless deliver 80 megabytes per second speeds for the cost of a third or less of fibre to the home. That speed is way in excess of the speeds demanded or needed by households at the present time or for the foreseeable future. This is a fundamental question. The NBN Co.'s response has been simply to say: 'The government has told us to do fibre to the home and that's that.' Having said that and particularly in the constrained-capital circumstances of today with so many financial risks abounding, any company would and should be constantly reviewing the way in which it is seeking to achieve its objectives with a view to determining whether there are more cost effective approaches. One of the other issues associated with this that the report touches on but only briefly is the use of the hybrid fibre coax networks. Telstra's and Optus's hybrid fibre coax networks, which were built originally to deliver pay television and still do so in the case of Telstra's, pass about 30 per cent of Australian households. The Telstra network in Melbourne is currently running at 100 megabits per second and it is offering that very high-speed service. For a relatively modest additional cost, Telstra is going to upgrade its HFC network in other cities to 100 megabits per second. That is hardly surprising; everywhere in the world pay TV cable networks are used for the delivery of broadband services and, even where there is fibre-to-the-home cable, HFC cable is a very important competitor and a provider of facilities based competition.

Every other market encourages the cable to provide competition. Even in markets where fibre-to-the-home networks have been built, governments encourage the HFC owners to provide continuing facilities based competition. Not so in Australia; as we have seen with the Telstra agreement and the legislation supporting it, the NBN Co. will be a fixed line monopoly, and the government has spent billions of dollars to pay Telstra and Optus not to use their HFC network to provide broadband and voice services once the NBN is rolled out. This is not only an extraordinary act in terms of anti-competitive conduct and really quite at odds with policy everywhere else in the world where governments seek to promote that type of facilities based competition, but also extraordinarily wasteful.

I will conclude on the issue of waste. We should consider that 30 per cent of Australian households will very shortly be able to access 100 megabits per second broadband via the HFC networks that have already been built and paid for. In Melbourne and in other cities that is already available through Optus and Telstra. That HFC network, at the expense of billions of dollars of taxpayers money, is to be rendered obsolete and effectively decommissioned so as not to provide broadband services in order to enable the NBN Co., spending yet more billions of dollars of taxpayers money, to build a fibre-to-the-home network which will provide, so it is promised, 100 megabits per second. In other words, billions of dollars will be spent so that households will have access to bandwidth at a speed which is exactly the same as they can get today from the HFC. That really sums up the wastefulness of this project.

The challenge that the committee faces is getting genuine accountability from the NBN Co. So far in the public hearings we have only heard from the Chief Executive, Mr Quigley, and I have to say getting information from the NBN Co. has been like drawing teeth. The NBN Co. has to do better than that. If it were a publicly listed company it would be much more transparent and much more accountable. The great irony of all of this is that, because the taxpayers of Australia own this company, it is reluctantly accountable and accountable to a much lesser degree than if it were owned by a bunch of pension funds or foreign pension funds and listed on the Australian Stock Exchange. Our resolution as a committee for the new year should be to try to get the same level of transparency and accountability from the NBN Co. as a publicly listed company does—as, for example, Telstra provides. In doing so we should hope—and this may be a triumph of hope over experience, but it is the festive season, the season of hope—that the government would support us in that endeavour.