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Environment and Communications Legislation Committee
09/02/2016
Estimates
COMMUNICATIONS AND THE ARTS PORTFOLIO
nbn co limited

nbn co limited

[19:53]

CHAIR: I welcome Mr Morrow back to estimates. Mr Morrow, do you have an opening statement before we go to questions?

Mr Morrow : I do. Thank you very much. We will table the opening statement that I am about to give. First of all, we would like to thank the committee for the opportunity. I would also like to point out that I am joined by my colleague and chief financial officer, Mr Stephen Rue. In the opening statement, we would like to provide the committee with an update on the progress with the rollout since we were here last, in October, and to take you through some of the key operational and financial highlights of nbn's half-yearly report, which we released last Friday and which is now available on our website.

Before I go into the detail, I want to once again assure the committee that we are committed to providing answers to all of your questions. Mr Rue and I will continue to attend, to do our very best to either answer them now or take them on notice, and, of course, if we take them on notice, we will respond as soon as possible. This is always with the caveat that there may be some information that we cannot readily release if it is commercially sensitive. We are conscious of getting the best value for the Australian taxpayer with the funds that the government is injecting into this project, and we have to be very mindful of the commercial and competitive environment in which we are operating.

As far as the overall direction goes, in general terms we finished calendar year 2015 on a positive note, with momentum continuing to build in the rollout of the five access technologies. But, as I have said publicly, 2016 will be a tipping point for connectivity for all Australians. It is a crucial year for the company to continue the momentum we have built and scale the deployment and take-up rates. During the six months ending December 2015, we largely focussed on building and strengthening a number of the underlying elements that are essential to sustain the large scalability required in the coming years. This meant (1) carrying out a number of pilots and trials of our new technologies, including fibre to the node and HFC, (2) strengthening our processes—particularly on our back-end systems for activations, assurance and customer support, (3) putting in train new agreements with our business partners, (4) releasing new commercial products and (5) increasing workforce capability that is so important in ensuring the capacity exists to meet the demand.

If I can just speak generally about the rollout progress, we can definitely see an appetite for connecting to the network building rapidly, as the footprint now extends to more than 1.7 million homes. This year, we plan to start construction or complete work across a further 1,500 suburbs and, by the end of June this year, we believe nearly one in four homes will be able to order a service on the network. By June of 2018 we are targeting three in four homes. We now have more than 780,000 active end users at the end of January 2016 and, just prior to Christmas, we reached a new milestone of over 10,000 activations per week. I am pleased to report that we have just had two consecutive weeks of above 13,000 activations. This compares to about 4,000 per week just over a year ago and reflects the increase in marketing and take-up of nbn services from our retail service providers. More than half of the cumulative number of premises activated and ready for service reported in December 2015 occurred during that calendar year, again reflecting the significant acceleration over the last 12 months as we began to scale the rollout. In fact, roughly half of the nation's homes and businesses are now either in the design process, under construction or in fact ready for service.

I will provide you with a bit of a snapshot of the half-yearly financials. With the growth in active premises at a 10 per cent improvement in average revenue per user, at 31 December our growth and revenue continues to build. Capital expenditure for the last six months to 31 December was $2.1 billion, continuing to reflect investment in the network—particularly the design and build of our FTTP, FTTN and HFC networks, plus the IT systems that support the build and our customers. Of course we are currently relying on the equity funding from the Commonwealth government, which currently stands at $16.4 billion out of a total equity commitment of $29.5 billion. The cost per premises, at the end of December, continues to be broadly in line with our corporate plan 2016 projections, including the fibre-to-the-node service areas completed at the end of December.

So with these improving results, we remain confident that the momentum is sustainable. And why do I think this? Because we know we now have contractual agreements in place with 10 different delivery partners to design and construct a fixed line footprint across Australia. The competition we are seeing for these build contracts sends a positive signal from the industry that we are doing the right things and that they have more confidence that we are solving some of the problems of the past. We are further leveraging industry and network knowledge by working with the existing HFC network owners to put in place construction management contracts for the HFC portion of the network build.

We also want to move from just building to also making sure that we can activate and run the network. To do this we are maintaining capability to meet the demand for connections. This has improved dramatically with the conclusion of three new master agreements for the operation and maintenance of the network. And finally, through the industry development program, NBN is committing up to $40 million for industry skills training, awareness campaigns and developing a national skills register to assist our construction partners in recruiting, training and developing approximately 4,500 additional employees across the country.

I know there is a lot of interest in the detail, so I would like to walk you through the progress to date across the various MTM technologies. For fibre to the premises, over 1.1 million premises are now ready for service and we are adding nearly 9,000 per week. The service order activation rate is now nearly double that of last year, as the majority of premises now have lead-ins prebuilt, so the installation is much faster and far more efficient. For the fixed wireless footprint, we have accelerated this significantly in the last six months, with premises ready for service now exceeding 50 per cent of the targeted footprint of approximately 600,000 premises. The number of premises covered at the end of January was approximately 343,000, with over 87,000 end users activated on this network. The success of this service is evident in its net promoter score of 50 and a product satisfaction rating of 8.1 out of 10. Anybody in the telecom space knows that this is a marvellous result.

Following a successful pilot phase, NBN also launched an up-to-50-megabits-per-second wholesale fixed wireless service in December 2015 in order to provide higher speeds to customers further to improve the end user experience. This is a world-leading performance, attracting significant interest from the global industry, and it promises to deliver to regional Australians, and indeed those in our metropolitan outskirts, the sort of speed that one might only expect in our capital cities. The FTTN build is also progressing well: as at last week we have now reached over 180,000 premises ready for service, and this is growing rapidly. The experience gained in this rollout demonstrates minimal civil works, fewer homeowner complaints and a lower cost structure than alternative approaches.

The technology evolution of FTTN continues and, whilst it is still early days, our trials with fibre to the distribution point are showing that it will be an important upgrade path in the future. G.fast has also now been certified by the International Telecommunication Union, with worldwide acceptance and wide-scale deployment plans. Significantly, we have to date found that the fault rate and remediation costs on the copper are in line with our corporate plan forecast, which gives us confidence in achieving our expectations for this rollout. The expansion of this footprint is a primary goal for this year, with a target of providing access to 500,000 homes and businesses by July 2016.

For HFC we commenced end user trials of the HFC technology in Redcliffe, Queensland, in the first half of FY 2016, and initial results are positive, showing a successful provision of up to 100 megabits per second down with 40 megabits per second up. We have our equipment vendors lined up, we have chosen our construction partners and we are in talks with Telstra and Optus to assist us in the management of construction. We also expect the commercial launch of the HFC product in the second half of FY 2016 and are pleased that the DOCSIS 3.1 technology is being embraced by major telcos around the world.

On satellite, following the successful launch of our Sky Muster satellite last October, testing and deployment of all the satellite ground station networks is progressing well. Optimisation of the spot beams on the satellite is well underway, with modems on the ground active in 95 per cent of the beams to allow configuration of the service. Following a recent demonstration of the satellite service, there is a high level of confidence it will perform as expected, with plans to provide a commercial service in the second half of FY 2016. The second satellite is scheduled for launch in the last quarter of calendar year 2016, and it has been decided to repurpose the backup capacity on this satellite to provide a greater data allowance to end users.

The Sky Muster service will be a game changer for rural telecommunications, delivering a new generation of satellite broadband to remote and isolated areas of Australia and island territories. It will provide vastly improved speeds and data allowances compared to services over the ISS, while ensuring a good-quality experience for all satellite users. NBN is also ensuring that capacity is allocated for public interest uses like education, with the potential for this approach also to be applied for health and emergency services.

Whilst the network build is gaining momentum, it is important that we also ensure our customers, end users and employees are also feeling positive about the changes that we made. We have shifted the company to a customer-centric model and have made many improvements in the experience we offer to both our service providers and the end users. The results are confirming we are doing the right things. We have reduced dramatically the time to install the service and lifted the percentage of appointments kept. As a result, we have seen our NPS rise to 31 from 16 just 12 months ago. RSP sentiment is trending towards seven out of 10 for FY 2016, and our user satisfaction rating overall has risen to 7.7 out of 10. Importantly, fibre-to-the-node end users rate the product the same as fibre-to-the-prem users rate their product, which gives us some degree of confidence that the consumer accepts the technology as meeting their current needs. I am also pleased to say that our employee engagement surveys have also improved with double-digit growth and we remain focused on continuous improvement across all these metrics as a key to sustain the momentum we need going forward.

Other trends are also showing positive signs. Looking across all technologies, we can see the amount of data consumed by our end users continues to grow, with now over 128 gigabytes per user per month being used. The download is on the rise at 112 gigabytes, with the upload basically staying flat at 16. As a result of this growth coming earlier than expected, we have been evaluating a new pricing scheme for our CVC construct. Late last year we used a product consultation process to seek feedback on a dimension based pricing structure where the price comes down as more data is consumed. This was widely supported by the RSPs, and naturally, of course, they would like to see lower prices. We are processing the feedback and we hope to be able to decide on any changes during the first half of this year.

Finally, last October we announced a three-year construction plan covering an additional seven million homes and businesses, increasing from an 18-month view to provide a greater clarity around the rollout. Our current three-year plan covers 9.5 million homes and businesses that are either complete or will begin construction up to September 2018. It also covers the areas of the HFC footprint.

In conclusion, with the hard work of our employees, contracted partners and providers, we have continued to make excellent progress, but we accept that we still have many challenges ahead of us. All in all, the progress to date is very pleasing and we are looking forward to what will be an exciting year for the company as more of our technology starts to deliver fast broadband service to the part of the country that needs it most. We are happy to take any questions that the committee may have.

CHAIR: Thank you very much for that very comprehensive and very impressive update on the progress of NBN right across the board from customer service satisfaction, rollout and everything. Congratulations to you and your staff on the progress that is being made.

Senator URQUHART: Mr Morrow, first of all I want to raise the issue of the timing of questions on notice from the last estimates. They were due on 4 December last year, but not received until this month. In particular, there was one that had a response—and I am talking about question No. 127—that refers to a status 'as at November 12'. But, again, the responses were not sent to the committee until about three months later, so that was four days ago. Can you advise what date this response was sent to the minister's office by nbn?

Mr Morrow : Certainly. I believe the list of questions was finalised by the committee and sent us on 9 November. As I recall, the Hansard deadline was 14 December for response. Even earlier than that, by 4 December, we had basically given a response to 80 per cent of those questions. Roughly, by 4 or 5 December we had sent answers to 56 of 57 of the questions I received. The final one was sent late.

Senator URQUHART: Minister, you might be able to respond as to why the questions were held up in your office. If they were sent by nbn co on 4 and 5 December—

Senator Fifield: I would imagine they would then go via the department.

Senator URQUHART: Can the department help us out?

Senator Fifield: I cannot give you the time line for each set of questions for each agency across Communications and the Arts. That is not something I retain in my head.

Senator URQUHART: Can the department advise us when they were sent to the minister's office?

Mr Robinson : I do not have that information. I am aware the secretary this morning essentially indicated that we need to do better in the future on timing so that is our aim.

Senator URQUHART: Are you able to provide those dates on notice?

Mr Robinson : Yes, I will take it on notice.

Senator URQUHART: Minister, can you provide what date you received them?

Senator Fifield: We will take that on notice.

Senator URQUHART: Thank you. I want to refer to a response to question 126. In this response, nbn co advised that in 2014 the rollout schedule, which included fixed internet for west coast towns, was budgeted. The same response said that nbn co was not aware of the cost of delivering the fibre link to the west coast at the time. Can you explain how you could have budgeted for a fixed line solution without knowing the cost?

Mr Morrow : Sorry, is this for Tasmania? I presume that we are talking about Tasmania without knowing the question specifically. Is that correct?

Senator URQUHART: It is question 126. There were five parts to it—(a) through (e). Question (a) is:

Was this plan budgeted when you published the 2014 rollout schedule?

You said, 'Yes.' Then we asked:

… Was NBN aware of this cost when the December 2014 rollout plan was devised?

You said, 'No.' So my question is: can you explain how you budgeted for a fixed line solution without knowing the cost?

Mr Morrow : I think that there were a lot of assumptions when you look at the network being rolled out overall. Many of these assumptions were taken right from the day that the company was founded, put together and the first plan was rolled out. In the case of Tasmania, I am quite empathetic with the people there who felt that they were going to get a fixed line service and now they are—

Senator URQUHART: No, they were told they were going to get it.

Mr Morrow : I am sorry; I know that. But can I explain a bit of the process? The company assumed over the last several years that there were adequate facilities going to the western part of the state. Once we dug in to find out what it was, we realised that there was not. This significantly added to the cost of getting the fixed line service to that portion of Tasmania, to the point where it became far more economically feasible to put in satellite services and leverage the capacity of the satellites that we were putting up into the sky. I would point out that regardless of whether it was a fibre-to-the-prem plan or an MTM plan, this was something that was just not known at the time and would have had the same result.

Senator URQUHART: So you just use assumptions as the way to budget?

Mr Morrow : As is often the case. It is quite typical in the telecommunication industry and for a project of this size. I can point out assumptions that were made, that were quite gross in terms of the guesswork that was involved, right from the very beginning.

Senator URQUHART: In relation to those preparatory works that you talked about, in the same response to question 126 you indicated that preparatory works were undertaken in preparation for a fixed line rollout on the west coast, but you would not divulge the cost. You said that was commercial in confidence. Can you outline what work was undertaken towards a rollout that the government is now failing to deliver to the people of the west coast. What sort of work was done?

Mr Morrow : It is a high-level recollection. If the senator would like more detail, I am happy to take it on notice to go back to the teams back at the company. I know you represent Tasmania very well, Senator, and have a great deal of concern for them. What I found when I asked the question was that, while it was intended to be a fixed line footprint area, as soon as they started to go into the design works to get a little bit more detail they realised that it did not have adequate facilities already extending out there. The cost of doing that was—

Senator URQUHART: Sorry, I do not want to cut you off, Mr Morrow, but what are the facilities that you are talking about?

Mr Morrow : In order to cover any area of the country that has a remoteness to it, you have to have fibre facilities going out into these areas and you typically need diverse fibre paths so that you can keep that service to a degree of reliability. Because of the distance involved in getting to this geography of Tasmania, there is only one fibre facility that is owned by a different company or entity and that, even if we were able to get to use that, would only provide a simplex or a lack of redundant backfall facility. That would be unacceptable for people to run a business, to run a home and to depend on that service, because failures do occur. So if we were to put in a second or a redundant path on there, that is what would drive the cost per premise up to a point where it became much more economically feasible to use the satellite service.

Senator URQUHART: In the response to question 127, nbn co advised that Queenstown qualifies as being underserved. Could you advise how the government is prioritising Queenstown as per its promise for underserved areas?

Mr Morrow : We look nationally first and see which underserved areas are there. As we roll out the buildout we want to make sure that, proportionately, we are doing more in the underserved areas than we are in the served areas. That has been a metric that we have held strong to—it has been a part of the planning process and it has been something that we have executed against. As far as the detailed specific for Tasmania, I do not have those. I do not think we included those in the last report, but we deal with it from a national level. I am happy to take on notice if the senator would like to find out what portion of the underserved areas are being rolled out.

Senator URQUHART: I would certainly like some more information on that, because I do not understand why, if it is an underserved area, it is not a priority.

Mr Morrow : It is. Again, on an aggregate level you can always take a granular level and say, 'This particular town or suburb has an underserved area within it—why isn't that a priority?' At the national level we are addressing exactly what the government mandate is, but when you get down into a micro level there is always going to be an area that does not feel like it is being prioritised, when at the national level it is. That is just the nature of the rollout—it had never been directed to us to put all underserved areas first and then come back and roll out to the areas that are well served already; it was always on a prioritised basis. Hence the proportionate focus on them.

Senator URQUHART: If you can provide some more information, that would be useful. In the same response to question 127 you also advised that nbn co does not receive any information on port data availability. There are many constituents, particularly in an area on the west coast of Tasmania at the town of Zeehan, who have told me that all the ports at their local exchange are full. Basically, what they say is that they have to wait for someone to die or for a house to burn down before they can access a port. I would like to pose this question to the minister: in these situations, what measures does the government undertake to ensure that residents are not left without an option to secure internet access? What are you doing about it?

Senator Fifield: I am happy to let the officials explain what the process is, because this is not a unique situation around the country. As you have described, there are certain logistical limitations, so I will let the officers at the table address that question.

Mr Morrow : I happen to know about that and I have very close acquaintances who fall into that same category, and I think it is a shame given the stature of our country and the state we are in from a technological point of view. The solution to this, quite frankly, is to get NBN rolled out as fast as we can—and that is exactly the remit that we have been given through the statement of expectations by the government and is exactly what our plan has been doing. The thing that we can share right now is that everybody will have access to fast broadband by the year 2020.

Senator URQUHART: So you do not get any information about port availability from the department?

Mr Morrow : I believe you are referring to previous technology that Telstra was using where they had DSLAMS in their central office exchanges. They were not making any further investment and therefore there was a fixed amount, so even if demand were greater than supply, those people were just left without until somebody else gave up their service. That is a function of Telstra, and it is something that nbn co is rectifying.

Senator URQUHART: Minister, I have heard what Mr Morrow has said, but from the government's point of view—

Senator Fifield: What is your suggestion?

Senator URQUHART: I am asking you. You are the minister.

Senator Fifield: What is your alternative? The solution is to roll out the NBN as fast as possible. That is the solution. I am not aware that anyone has put forward an alternative solution to rolling out the NBN as fast as possible.

Senator URQUHART: Also in response to question 127, nbn co advised that discussions are underway with the West Coast Council to find a mutually convenient time to meet. I think, Mr Morrow, you indicated that you would visit within three or four weeks or something at the time of the last estimates. Can you advise the status of this, given that it was promised that a meeting would be held within four weeks of the October estimates hearing?

Mr Morrow : I believe our representatives have gone in and met with the appropriate council there. Russell Kelly, one of the authorised representatives of nbn, had visited with the council within weeks after our hearing.

Senator URQUHART: He physically visited?

Mr Morrow : Yes. He lives in the area there and he is quite close to a lot of the people there.

Senator URQUHART: In response to question on notice No. 91, nbn co declined to list the towns that will be served by satellite. We asked in that question for the towns that were going to be served by satellite and we asked for a list. I think your response was, 'Because of their typically small and dispersed nature it is likely to be extensive and you could not do it.' I would have thought that a simple database export would have dealt with that issue and I was disappointed not to be told that I would have to wait for the website, which is what you have said, to be upgraded, to learn this information. Notwithstanding that advice, that some towns may include both fixed-line and satellite internet in their footprint and that there may be some changes, can you name any town that is expected to rely solely on satellite internet that is larger than Queenstown?

Mr Morrow : I do not have that information with me. Part of the problem is that until we have physical inspections of the entire country—

Senator URQUHART: But you must know. It is no secret that I believe that satellite is completely inappropriate for a town as large in comparison as Queenstown, so can you not name me a town that has more premises in it that will receive satellite other than Queenstown?

Mr Morrow : I do not have that information.

Senator URQUHART: And you cannot get it? I have to wait for the upgrade on your website?

Mr Morrow : I am not exactly sure of the detail as to why the information was not available here. I think in the response it is talking about the detail that has to be involved in the planning that gets into the premises that could possibly change to an alternative technology. And so as we get closer to the launch and the preparation of the service I think it will become more clear.

Senator URQUHART: Mr Morrow, I asked if you could you provide a list of every town in Australia that is planned to be served with satellite. You said you would take that on notice and you have come back and indicated that you cannot provide that. I find that astounding, the fact that you are in the telecommunications area. I am not a techno-nerd by any stretch of the imagination, but I can actually filter stuff out of a database, and I would not have thought it was a big job to do that.

Mr Morrow : With due respect, I wish it was as simple as pulling information out of a database, but this is so much more complex than I think—

Senator URQUHART: But surely you know the towns that are getting satellite?

Mr Morrow : The issue is that we may have a snapshot in time of what is going to receive satellite services today. This is predicated on some high-level desktop assumptions and some modelling in a computer system that we use. This is just a first-pass to give us an aggregate of what we think the total cost of nbn is going to be. As we get closer to the deployment some of these premises will end up, when we look in far more detail, being far more economical to put fibre to the node in. Or maybe copper is insufficient so we have to put fibre to the premises.

Senator URQUHART: But as we are here today, are you saying that you cannot provide me with a list of the towns and regions that are going to get satellite?

Mr Morrow : Let me take that back on notice. On the surface I do not see why we would not be able to.

Senator URQUHART: I cannot either. I am absolutely astounded that you cannot provide that.

Mr Morrow : I want to caveat that by are saying there is a lot of detail that goes into a lot of the questions that are behind there. I assume you are not aware of anything at this point as to what was behind that, so let me take that back. I understand your question and what you are trying to get at, and perhaps what we can do is say which ones are initially targeted for it, but that could very well change. Maybe that could satisfy what your curiosity is.

Senator URQUHART: I would certainly expect to have a better answer than what you have provided, so thank you. My last question is in relation to the rollout in Devonport, which I have asked about before. The local member, Brett Whiteley, has previously suggested that Devonport would have had the NBN by Christmas last year. He put out a press released on 9 December 2014 saying that it would 'most likely be finished by Christmas 2015', and that obviously did not happen. Could you advise the status of the Devonport rollout as it stands now? Has any construction actually started and, if so, where is it happening?

Mr Morrow : I will take that on notice. I do not have the specific details now.

Senator URQUHART: It probably would have been handy to have some extra officials here—as we requested—to have some of these answers.

Mr Morrow : I would have to line up hundreds of people to be able to answer the kind—

Senator URQUHART: You usually have more sitting across there than what you have tonight and we usually are able to get a bit more information.

Mr Morrow : I can assure you they would not have that answer either. It is not a case of any of the executives having at our fingertips or in our minds every individual suburb across the country of when that is going to get deployed. These would be superhuman type people and—

Senator URQUHART: You cannot have it tonight, but you would have somebody that is sitting back at nbn co or wherever that could probably give you that answer if you were able to get them on the phone now—

Mr Morrow : I would never—

Senator URQUHART: I ask for you to respond to that as quickly as possible.

Mr Morrow : I will make every endeavour to see if we can get an answer before the conclusion of this committee.

Senator URQUHART: Thank you very much. I appreciate that.

CHAIR: Than you, Senator Urquhart. Senator Conroy.

Senator CONROY: I have a whole range of questions which I will come to, but first I want to take up and get some clarifications on a couple of things you said in the opening statement. Starting at the end of your financial year highlights, you talked about ARPU. But, before I talk about that, could I get the breakdown, which you usually have on hand, of the services being provided on the different platforms at the moment—so the 100, the 50. You usually have that handy. Can I just get the latest update.

Mr Rue : This is the per cent on each tier?

Senator CONROY: Yes, each tier.

Mr Rue : We actually outlined this last week. In the fixed line area 12-1 is 33—

Senator CONROY: Sorry, if I could separate out FTTP.

Mr Rue : This is FTTP: 12-1 is 33 per cent, 25-5 is 45 per cent, 25-10 is 1 per cent, 50-20 is 5 per cent, and 140 is 16 per cent. On the fixed wireless 12-1 is 17 per cent and 25-5 is 83 per cent. It is going very well.

Senator CONROY: You have got FTTP in services going, and I appreciate you do not have a pricing construct, so I am interested in what services—have you just given them an unlimited service or have they said, 'Give me this one' or 'Give me that one'? How are you running your trial?

Mr Morrow : It is nearly the same suite of services that we offer for FTTP except there is a service qualification on the line ahead of time to know what the maximum speed is that we can offer. You will find people that have 100 megabit per second offering, and you will find people that have the 50, the 25 and the 12.

Senator CONROY: Could I get a breakdown, if it is possible, of the FTTN tiers? I appreciate they are small numbers but their percentages—

Mr Rue : I know from memory 70 per cent is 25-5. I do not have the split otherwise.

Mr Morrow : I believe there are another 10ish on 12. Let us get the facts. We can grab those. They are readily available.

Senator CONROY: In your financial highlights you talk about a 10 per cent improvement in ARPU. Can you explain what you mean by that? You were getting X dollars per customer, and now you are getting Y dollars; is that what we are talking about?

Mr Rue : To answer your other question: 12-1 is 13 per cent, 100-40 12 per cent and 50 25 per cent. ARPU stands for average revenue per user, so it is the amount we receive per month from the RSPs per end user.

Senator CONROY: And you have indicated that that has gone up. From what to what?

Mr Rue : It has gone up from $39 in December to $43 this December, half-year to half-year.

Senator CONROY: I am very confused. You have not put your prices up.

Mr Morrow : That is correct.

Senator CONROY: So how have you got more money out of consumers without putting prices up?

Mr Rue : A 30 per cent increase in data usage.

Senator CONROY: So you actually make more money not by putting up prices. That is not how you have achieved an increase in your ARPU.

Mr Rue : Correct.

Senator CONROY: If someone said to you that the ARPU has increased and therefore you have put up prices, you would say, 'You're an idiot; you actually don't know what you're talking about.'

Mr Rue : I probably would not use that phrase.

Senator CONROY: Wouldn't quite phrase it like that? I appreciate that you are not quite as colourful as I perhaps sometimes am. But the gist of that is that the person has fundamentally misunderstood the concept of ARPU.

Mr Rue : It is not a price increase; it is buying more.

Senator CONROY: Buying more at the same price.

Mr Rue : Correct.

Mr Morrow : As I think you are quite familiar, there are two components that make up what the RSPs pay to us. One is the access virtual circuit charge paying for a 25, 50 or 100 and then there is a CVC, which is more the usage base. If they have more usage per customer then they buy a bigger opening through the network, which allows that cost of CVC to go up. All of the increase in the ARPU that we have seen has been predominantly on that CVC charge, not on the AVC charge, so it is their buying more capacity that is driving the ARPU up.

Senator CONROY: That is no shock to me, but I just wanted to be clear for all my friends out there who are listening. There is some clown called Matthew who has tried for many years to pretend that an increase in ARPU means an increase in prices. I am hoping the experts from nbn co have put that to rest, so thank you for that.

Are you lumping the faster-than-100-40 AVC into the AVC numbers?

Mr Morrow : No, that is a combination. Mr Rue was referring to the combination of AVC and CVC.

Senator CONROY: Can you explain what is happening on the CVC side?

Mr Rue : The ARPU from that has gone up from $10 to $13, so it is most of that increase, as I said earlier. It is as a result of RSPs purchasing more capacity, which is what the charge is for, because the end users are using more.

Senator CONROY: The commitments given to the ACCC over time—which I think were binding originally—were that nbn co would lower CVC over time as revenue built up. I think you are examining that now. You are seeing the steady growth that you hoped to see and therefore you are in discussions about how to manage the pricing of CVC. Am I misunderstanding what that discussion paper was about?

Mr Morrow : I think it was always envisaged that, as the network got built, as usage went up, the CVC pricing component would have a different construct to come down with higher volume so as not to stifle high usage. I think it was always believed that it needed to occur in a triple-win situation where the end user gets higher value, the RSPs also get greater value and, of course, nbn investors also profit from it. In our plan as we look forward is that CVC pricing eventually does come down.

Senator CONROY: Mr Rue, I appreciate that it is probably a relatively small number, but do you have any indication of sales of 250-100? I know you have bundled up, for the purposes of the conversation, 100-40, 16 per cent, and I am sure it is a very small portion of that, but I wondered if you could tell us the increase in users above 100.

Mr Morrow : Directionally, what we have seen over this past six months—actually, I will draw it out to give you a bit more colour over time. Pre-Netflix it was fairly stable for this AVC. Those proportions that we have always talked about—79 or 80 per cent of all of the services purchased are at 25 megabits per second or less—held steady. What we saw from the Netflix effect was actually RSPs selling more of the higher-access speeds. We are now seeing the 50 megabit that started to go up. That increased the AVC proportion of the ARPU for us on an average basis, and the CVC was going up as well. Since then we have seen that AVC pricing come back down again and stabilise back down near where the majority is at the 25. So if you wanted to look at it, it is a slight decline of speed access technology revenue coming down with CVC going up.

Senator CONROY: What I am really trying to uncover are the fibre zealots. I am looking for them. I am hoping you have their names and addresses. How many fibre zealots are there?

Mr Morrow : I am one of them, just so you know!

Senator CONROY: Oh, so you have been able to connect to more than 100-down 40-up?

Mr Morrow : No, I just like fibre—that's all!

Senator CONROY: In particular, I am looking to find out how many fibre zealots have ordered the 250/100, or I think there was even a conversation where somebody might have tried to order a gig if it were available.

Mr Morrow : There are a few out there.

Senator CONROY: Let us name names. Let us know who the fibre zealots in this country are!

Mr Morrow : I have my eye on them! I think we had a max at 30-gigabit-per-second service on users, but the bulk of those were people trialling the service. It had not continued. There are still are some that are out there who, again, you can count on two hands perhaps

Senator CONROY: No, I expect it to be a relatively small number.

Mr Rue : It is a very small number.

Senator CONROY: Last time I think it was maybe a dozen.

Mr Rue : I think it was about a dozen paying last time. If it has moved it is by one or two.

Senator CONROY: As I said, I do not expect it has. I am just interested, we have to keep our eyes on those fibre zealots, Mr Morrow; they are dangerous to the country!

Mr Morrow : We love them, Senator.

Senator CONROY: Do you know which RSPs are selling faster plans? The 250/100, 500/200 or the 1,000/400. Are you were aware of anyone offering them?

Mr Morrow : Most of them choose not to offer the ultrahigh speeds because—and this is what they are hinting to us—they do not feel that there is a market out there for them. So in spending the marketing dollars and putting together promotions to go out to sell gigabit per second services there is just not enough take-up rate to justify the cost of doing so. If they want that we have that product available to sell to them.

Senator CONROY: I was interested in your comment on satellites. What is your forecast total number of people who will end up using the two satellites?

Mr Rue : It will cover 412 and—

Senator CONROY: Thousand?

Mr Rue : Thousand. Yes. We have—

Senator CONROY: Sorry, what was that?

Mr Rue : It is 412,000 covered and at the end of fiscal 2018 we have 135,000 active users.

Senator CONROY: So 135,000.

Mr Rue : I do not have it past 2018, but at 2018 that is where we are.

Senator CONROY: You will cover 412,000 after the two satellites arrive?

Mr Rue : Yes.

Mr Morrow : After the first one goes up, technically.

Senator CONROY: And your expectation is that 135,000 will take it up?

Mr Rue : At the end of 2018 it will go up.

Senator CONROY: At the end of 2018.

Mr Rue : It has gone up from 85 to 100—

Senator CONROY: Is there a reason you have not estimated further than 2018?

Mr Rue : I just do not have it here. We did not put it in the corporate plan.

Senator CONROY: Can someone can grab it for us now?

Mr Morrow : We will update it in the July-August time frame.

Senator CONROY: I was particularly interested that you mentioned you have decided to repurpose the backup capacity on the satellite to provide a greater data allowance to end users. Could you just take me through your thinking on that? 'Backup' always sounds like it is really important but, equally, trying to meet the customer demand is important. I am just trying to understand what the backup was for, and does that mean you have no backup capacity? Or have you used half the backup capacity? I am interested in what the thinking behind the change was.

Mr Morrow : A couple of factors have evolved. The original concept and design, which I am sure you are familiar with, was to put the first satellite up as the primary that offers the coverage to the various areas and that provides the main source of data communications. While the second satellite was going to be used to provide some capacity, that was a very small percentage for what we call highly congested beams. The rest of it, the predominant part of it, was to be reserved against the event that there was a problem with the first satellite. Then you would kick it out of its orbital slot and you would fly the second one into that slot and reconnect everybody so that everyone would be up and running. Given the fact that, when you look at—

Senator CONROY: How much of the total capacity in that second satellite was dedicated to contingency for a disaster?

Mr Morrow : As an estimate, I would say 90 per cent. If you wanted the details, I would have to take that on notice.

Senator CONROY: If you could, I would appreciate it. I am genuinely interested.

Mr Morrow : Again, it is a large majority of it. But remember: this was $300 million sitting in the sky as an insurance policy. When we started talking to the experts, they looked at the probabilities of a satellite going wrong. Once you get through the initial phases—the launch, positioning it in the orbit, the connection, all of the expansion of the solar panels and the antenna arrays that talk to the Earth—that probability of failure diminishes quickly and gets down to such a low point that it does not make sense to have a $300 million insurance policy for it. When we looked around the world, we could not find another commercially based application—there are some military ones—that kept two satellites in the sky for this sort of thing.

Given the second factor, that more and more people are using more and more data, as evidenced by my 112 gigabyte download—a number I mentioned earlier—we needed to think of other solutions in order to be able to give the people served by the satellite greater capacity levels. So we weighed the option—what if we had the two beams coming into every house, from Sky Muster and Sky Muster 2? By utilising both of those beams, I can have more data download capability than I could if I were only relying on the one, because the other is sitting there as a backup. Let us now take the case of Sky Muster 1 going wrong—or either of them going wrong. What it really means is that the amount of data consumption for those peak users goes down while we figure out what the alternative plan is. We have thought about priority services—educationally based services, for example—how we can make sure that they do not suffer in any way. What limiting or balancing the load over two satellites means is that you are going to have to have a program to look at which antennas you have to repoint at the second satellite in the event of a catastrophic failure of one of the satellites. But again the probabilities of this ever occurring are low—ultralow.

Senator CONROY: You know what those engineers are like. They are incredibly conservative.

Senator BACK: Just like those economists!

Senator CONROY: No, tragically, they are not. I understand that Skymesh has been selling 100/100 but they are using the 250/100 AVC to sell it. I am just wondering whether you could give us a breakdown. If you have it handy, that would be good, but, if not, you can take it on notice. That is just how they are selling their product. I am just interested in the actual number of the 250/100.

Mr Morrow : I will find out. I do not have it here.

Senator CONROY: Thank you for that. I want to quote you something you said when nbn released its results last week. You said:

We ask that you trust us, we will be transparent, we will be open, we will make sure that we expose all of the elements to which we didn't do well, on top of the bragging of the good things that the employees did.

Do you remember that interview?

Mr Morrow : Yes.

Senator CONROY: They are your words? I have not misrepresented you?

Mr Morrow : Those are my words, yes.

Senator CONROY: I will just go back to the Queenstown conversation you were having before. My recollection—I am happy to be corrected—is that Queenstown's spot beam was already a relatively congested spot beam because of the number of other premises that were going to be covered in that footprint before you added Queenstown. Could you give us an indication—and you can take it on notice—of how many homes were inside that spot beam before you added Queenstown, and obviously how many you have now added? My rough recollection is that that is now a very crowded spot beam with it having been added in.

Mr Morrow : We will take that on notice.

Senator CONROY: Do you have any idea off the top of your head? I appreciate you may not.

Mr Morrow : I do not. I do know, as I said, that before we even considered repurposing the second satellite there were a number of what we call stress beams that we were going to have to find an ulterior solution to. We would have to put up fixed wireless towers, pull more customers off, extend the fixed line footprint of fibre to the premises and fibre to the-node in those areas. This was always something that has been on the to-do list as we move forward. Whether this portion of Tasmania fell into that category I could not tell you, but we will take on notice the number of homes that were originally in that beam and what changes were made.

Senator CONROY: I turn now to your public relations staff numbers. In a recent attachment—attachment A—to question on notice No. 102 from October 2015, nbn co said that its corporate affairs section had grown from 11 to 30 since 30 June 2014. That is correct, isn’t it? I am not misrepresenting that from No. 102 from October 2015?

Mr Morrow : That sounds about right, yes.

Senator CONROY: That was an increase of 19 staff, or 173 per cent—I think my maths works—from 11 to 30.

Mr Morrow : Yes.

Senator CONROY: I turn to your half-yearly results; nbn released these on Friday. And nbn's—one can only describe it as now quite bloated—spin machine released some research to the Australian, which appeared in an article entitled, 'Fibre to node as good as home'. This article said:

Initial research finds that both homes getting NBN over FTTN technology—which uses the century-old copper network for about the last 350 metres to homes—and those with fibre-to-the-premises are scoring their satisfaction at 7.7 out of 10.

Can you just confirm that as of 31 December 2015 you had 6,636 active FTTN users?

Mr Rue : I think that is correct.

Senator CONROY: Compared with 610,978 on the fibre. So FTTN connections are about less than one per cent of the total?

Mr Rue : Yes.

Senator CONROY: How many homes are surveyed out of the 6½ thousand plus?

Mr Morrow : I do not have that number offhand. I do know that when the statistics were presented it was about a 10 per cent sample size of the end users that we had at the time. The specific number we would have to take on notice. It is considered, with a 10 per cent sample, statistically valid. It is a small, early-stage survey—and I have made this public as well—but it is still statistically valid to give an indication that for those users that had FTTN at the time we did the survey, when you look at their satisfaction of using fast broadband, that it was similar to what we saw with our fibre-to-the-premises customers. This is something that is an ongoing issue. As we get more and more FTTN customers using the network we will continue to do bigger and broader based research and statistical surveys like this to test whether people are in fact happy with their service.

Senator CONROY: Are you aware that the Telecommunications Industry Ombudsman reported in December 2015 that NBN related complaints rose by 4.9 per cent over the past year to 2,262 despite the ombudsman stating that this was traditionally the quietest quarter of the year?

Mr Morrow : Yes, but if you look on a percentage basis we came down. We were well within industry standards—in fact, better than—and that was a constant improvement in the percentage of complaints of active users or customers that we had. It is a complete misrepresentation to just have somebody call out and say, 'You have more complaints than before' when you have a company that is growing to the size we are growing in terms of customers.

Senator CONROY: I will admonish the Telecommunications Industry Ombudsman on your behalf!

Mr Morrow : Thank you.

Senator CONROY: Are you aware that MPs' electorate offices in the Lake Macquarie and Newcastle areas are being flooded with complaints about fibre to the node, including slow speeds, delayed connection times and disrupted services?

Mr Morrow : I am aware of some of those complaints that are coming through, yes.

Senator CONROY: You live in that rough region, don't you?

Mr Morrow : Pretty close, yes.

Senator CONROY: It is up to around 60 complaints so far and more and more are coming in every day. I just wanted to go through some of the examples. I wanted to read through a few of them.

Mr Robin Dell, in Belmont North, has stated: 'We are connected to the NBN at a fast, upgraded speed at a premium price. We paid extra to get 50. This service speed is rarely achieved. Could you please make inquiries of the appropriate officers or ministers as to whether the FTTN NBN will provide a worse service compare to the ADSL 2+ it is replacing. At the moment that seems to be the case.'

Mr Gerry Wallace, from Valentine, actually wants to go back to ADSL. He bought an up to 140 FTTN plan which goes down to under five megs in the evening and he is now having trouble communicating with colleagues overseas and in Brisbane.

Mr Maxwell Taylor, from Gorokan, said he was better off under ADSL 1. There was a cabinet right outside the front of his house. He bought an up to 140 plan and was getting as low as two meg. He said that it was shocking at night and weekends and considerably slower than his old ADSL service. He has to hot spot his Optus mobile phone to get a decent service.

Mr Lawrence Alderton, in Belmont, said: 'I have been connected to the NBN for two days with TPG on a 25 meg plan. What a joke. Peak time download speed is around four megs. That's less than my old ADSL 2.'

Mr Robbie Grafton, Newcastle CBD, said: 'Ping times go from 13 milliseconds to around 140 milliseconds of download speed. It decreases dramatically from the average 85 meg to as low as one meg, while upload speeds halved from around 30 to 15 meg. It almost makes me pine for the ADSL 2+ connection.'

Ms Jan Rego in Bundaberg, contacted us about her elderly parents who have convicted to FTTN in Bundaberg on a 25-meg plan. The speed drops to only two megs at 7 pm. They are not able to watch the FetchTV service they were bundled, and are not able to Skype with their daughter and family who live in Abu Dhabi. They raised this issue with Keith Pitt's office who told them they would add it to the list of complaints being sent to the minister's office.

Minister, have you received complaints from Mr Keith Pitt's office?

Senator Fifield: We have had contact with Mr Pitt's office, yes.

Senator CONROY: The same constituent contacted us again about her parents-in-law. They have a medical condition and are currently without a service and apparently nothing can be done because Telstra is too overwhelmed with complaints in the area.

Miss Georgina Longhurst in Pelican said: 'FTTN internet very slow. It takes ages to load web pages. It has had connection issues. Was posted a modem under the government's new self-install model. Has difficulty connecting it. Two weeks without service.'

Mr Ken Thornton in Belmont North said: 'Having trouble connecting using the government's new self-install model.' He has now been sent three modems and none have worked. Still waiting to be connected.

They are just a rough sample of the complaints that are pouring in, and obviously I am only referring to offices of members of my own party. Clearly Senator Fifield has been receiving complaints from members of his party. Have you thought about using, perhaps, those in the public relations team to help people settle their problems with the network rather than just pushing out surveys? Could you actually put them to some use to help customers rather than tweeting all the time?

Mr Morrow : Senator, the role of corporate affairs is not that which deals with the customer. I would like to comment and respond to a number of those complaints. First and foremost is we do not want anybody to have any poor experience to do with anything with NBN.

Senator CONROY: But surely you accept that these problems are real and that you have to fix these problems?

Mr Morrow : I am certain that those problems are real for those people. If they report that that is the case then yes it is. I would like to—

Senator CONROY: That is a problem that you have to get fixed.

Mr Morrow : Indeed it is. Can I point out that we have, by nature of introducing the technology, a lot of processes that you assume to work the first time that you fix. That is exactly what we are doing. We are seeing a far quicker ramp-up rate than ever before. Think about the problems, and I know you had many calls coming into your office when we first started to roll out fibre to prem as well. It is the unfortunate nature of doing something for the first time.

I will point out that we looked at every complaint that had been received on fibre to the node and not one of them was actually a speed issue that was related specifically to the fibre-to-the-node technology. Again, remember that the architect of this is that the customer's Wi-Fi in the home is connected into the modem that travels over the copper, that goes over the fibre, that goes to the point of interconnect, and the size of the interconnect is what the RSP will buy in terms of capacity. For people that are experiencing a peak busy hour reduction of speed, that is more likely to do with that CVC capacity that has been purchased by the RSP, the provision in the network size by the RSP and/or if there are other points of contention within the network. We evaluated and inspected every complaint on this to see, because it is so important for us to understand if in fact the technology cannot deliver the speeds that we need to. We did not find one case where the fibre-to-the-node technology was a factor in those speed complaints.

Senator CONROY: So it is not your problem?

Mr Morrow : No, that is not what I am saying, Senator. I am merely pointing out that it was not fibre to the node. These are bugs that need to be worked out. We are working very closely with the RSPs, with the delivery partners and with our own internal teams that, whenever a customer does not have the service that they were expected to get, we work collaboratively together to make sure that that problem is solved. Those complaints are coming down, as I said before, when you look at the surveys that have the user satisfaction rate as high as it is. Even in the installation satisfaction rate in terms of what we have climbed up to very fast is us working out the problems very quickly. I am certain, unfortunately, that there will be many more problems on every one of these technologies and all I can do is commit to this committee and commit to the public of Australia that we will fix it. We will get it to where it is an acceptable, high-quality service level, but again in the beginning often you have to work the bugs out, and that is exactly what we are doing.

CHAIR: We are going to go to a short tea break in a couple of minutes. What I was proposing to do is that Senator Simms has a handful of questions, so what we might do is continue through until nine o'clock and then come back.

Senator CONROY: These complaints are coming from every RSP. It is not just our offices and the Liberal Party offices. You are not actually saying they are all under-provisioned in Telstra, Optus, iiNet and TPG?

Mr Morrow : I am sorry, what was the question?

Senator CONROY: The complaints are coming from every RSP. You are not saying they are all under-provisioned? You are not suggesting Telstra, Optus, iiNet or TPG are all under-provisioned?

Mr Morrow : There is a myriad of issues we are finding as we are uncovering on this. Again I am merely pointing out that, as far as assessing whether the technology is the source of the problem of people getting inadequate speeds, we cannot find anything, as of yet, that would suggest that. Again we are keeping an open mind. We have to be pragmatic about this. There are other elements that we are knocking off and fixing as we go. I think, when you look at the fault rates on this, it is very much expected and was part of the plan, we are getting better by the week.

Senator CONROY: So it is 'no' to actually put the tweeters in the corporate team into really helping people.

Mr Morrow : These are people in our chief customer office group where we have marketing, sales and services.

Senator CONROY: You couldn't put them on the phones for a day?

Mr Morrow : I know they are your favourite people that we are talking about, Senator, but, no, I am sorry, they are not skilled at that sort of thing. They have different skills.

CHAIR: On that note—

Senator CONROY: It is still only 8:59 and I have a string of questions on financial issues, and I am very concerned about some of the people listing in. They play a drinking game and every time you refuse to answer a question on the basis of commercial in confidence they scull, so can we try to not inebriate half the community with Mr Rue's usually loquacious answers. I am happy to pause at that point.

CHAIR: Thank you. The committee will now suspend for a tea break and we will resume with nbn co. Thank you.

Proceedings suspended from 21:00 to 21:14

CHAIR: This hearing is now resumed, with the nbn co.

Senator SIMMS: My questions relate to my home state. As a South Australian, I am going to focus a little bit on that. In October last year, the nbn released a timetable outlining when suburbs throughout Australia would be connected to the network, and the government described it as ambitious but achievable in terms of the time frame. When outlining this timetable, did the nbn prioritise any known broadband black spots in South Australia?

Mr Morrow : By black spots, do you mean the underserved areas that have no broadband coverage at all?

Senator SIMMS: Yes.

Mr Morrow : As I was mentioning—I do not think you were here—

Senator SIMMS: I do apologise. I did miss some of the earlier—

Mr Morrow : No worries. The government has mandated us that we prioritise underserved areas. One of the ways in which we do that is that, on the aggregate level, we look at statistics constantly to say: on a proportionate basis, we are building more in the underserved areas than we are in the served areas. I can assure you, Senator, that we are following that rule and sticking to it. On a more granular level, in a detailed state or in a suburb area, that proportion might not look that way. I would have to check for you. If you have the specific areas we can look at to see what is in South Australia as far as where there are underserved areas and how that deployment is going, I can get that information.

Senator SIMMS: If you can get that information for me, that would be good.

Mr Morrow : We will take that on notice.

Senator SIMMS: My understanding is that there were 47 suburbs that were scheduled to be completed in South Australia in 2015. Do you know which ones of these were completed on time, or have they all been completed on time?

Mr Morrow : That were scheduled to be completed by when?

Senator SIMMS: By 2015.

Mr Morrow : I would have to check that for you as well.

Senator SIMMS: If you could, that would be great. It is my understanding that 72 South Australian suburbs have been scheduled to be connected during the first quarter of 2016. Are you able to advise how many of the 72 suburbs have been completed, or do you want to take that on notice?

Mr Morrow : I will take that on notice as well.

Senator SIMMS: Okay. What about the City of Adelaide—where is that at in terms of connectivity to the network?

Mr Morrow : I know that progress is being made there. From one of the reports that we had—we happen to have a board member who is from Adelaide—I recall that it is going all right, but I would like to get the facts for you, to be absolutely certain. You are just asking how far the rollout has gone within the city itself?

Senator SIMMS: That is right.

Mr Morrow : We will take that on notice.

Senator SIMMS: So you are not able to give me any indication tonight in terms of how it is progressing?

Mr Morrow : I may be able to. How long are you going to be here?

Senator SIMMS: I do not have much to go, so—

Mr Morrow : Let us see if the team in the back here can get a quick answer for you.

Senator SIMMS: If possible, that would be helpful for me. One of the reasons I am asking about the City of Adelaide is that I know the city is doing some work around offering a wi-fi network and so on and there has been some talk about wanting to provide opportunities to businesses to set up in the area and so on, so having that connectivity would be useful for the CBD. I am just keen to check on where that is up to. What about regional South Australia—are there any areas that have been identified as key priorities? I know I am drilling down to the granular level, but are there any areas there that have been identified as core priorities for you?

Mr Morrow : No. Again, the only priorities that we would be having are either through the underserved areas—to be sure, proportionately we are doing more there—and then if there are high-value areas that are good for the business to focus on. I imagine if it is out in the rural areas, it is according to the natural rollout path. I think we have some state-wide data that we can provide.

Senator SIMMS: Okay. I do not have any further questions. If you could get back to me with a response on those issues, that would be good.

Mr Morrow : Indeed.

Senator SIMMS: Thank you.

CHAIR: That was nice and concise, Senator Simms. Thank you very much. Senator O'Neill.

Senator O'NEILL: Can I just ask, on the back of the questions from Senator Simms, for a similar outline for New South Wales—the goals that were established at the beginning of 2015, what you met, what you did not meet and what your proposed targets for New South Wales in 2016 are at this stage, so that they can go on the record?

Mr Morrow : We will provide that information.

Senator O'NEILL: Thank you very much—down to the lowest level of data construction you can give so we can make some comparisons with geographical areas. That would be helpful.

Mr Morrow : Just to be clear: you are trying to understand what the rollout plan was and how we performed against it, down to the numbers?

Senator O'NEILL: Yes.

Mr Morrow : You are looking for the number of homes?

Senator O'NEILL: Yes, and projections for 2016 so we have got that data going forward.

Mr Morrow : All right.

Senator O'NEILL: Can I just indicate that I think there are many people in New South Wales whose stories might be similar to some that Senator Conroy has already put on the record. I want to make you familiar with some further issues on the Central Coast. Are you familiar with the case of Mr Barry Egan, of Kelsey Road, Noraville?

Mr Morrow : That name does not sound familiar, no.

Senator O'NEILL: Senator Fifield, have you been informed of this case?

Senator Fifield: The name does not ring an immediate bell, but that is not to say that they have not corresponded.

Senator O'NEILL: Mr Egan has contacted my office and involved the Ombudsman to mediate his issue with nbn co regarding the connection to his home. His landline was cut off. Mr Egan continues to have problems even now that the NBN has been connected, and these problems concern dropouts in his service and faults on his landline that were not previously there before the NBN was finally connected. He has told my office that there is unbelievable confusion, when he seeks assistance, regarding whether the issue is a Telstra issue or an nbn problem, and this is a common complaint when people contact my office. They are incredibly frustrated and disappointed.

Like Senator Conroy, I have a couple of other cases I would like to put on the record for you to respond to. Mary Smith, of Canton Beach in New South Wales, phoned the office very angry at her treatment by the nbn and Telstra. The nbn co made an appointment to visit her home on 7 January 2016. She was informed that, if she was not there, her phone would be cut off. The sort of arbitrary, intimidating nature of those conversations is something that is echoed in many of the conversations with my staff. She stayed at home all morning but nobody arrived. She was told by Telstra that a technician would come to her home on 17 January in the afternoon. Nobody arrived. On neither occasion was an explanation offered. She told my office of several people in her neighbourhood who had very similar experiences. They are all angry and frustrated with their interactions with the nbn co and they are particularly concerned about elderly people in the community being cut off from contact with their families and essential services for many, many days. She said that, in her area, it was her view that anybody who has had anything to do with the nbn co has had problems.

A third case is that of Michelle Loaney of Bluefish Crescent, Tascott. She phoned the office absolutely furious with the nbn co. I have got to a point, Senator Conroy, where I think I might have to consider hazard pay for my staff. They are so distressed by the increasing frequency of these sorts of calls. Complaints consist of dates being given for connections which are then pushed back and pushed back further. She is furious now that she has been provided with no fewer than five different dates as to when her service would be available. She has been waiting for two years to be connected, while suburbs around her have been connected. She is absolutely disillusioned with the process. This is a complication not just of inconvenience, but her family rely on wireless connection for her four children to undertake their studies, and they are unable to complete online homework tasks because the service is so poor. They desperately need a reliable and adequate NBN connection. They are absolutely in fear that they may never, ever have that delivered.

Finally is the case of Mr Manton, of Point Clare. Mr Manton is engaged in an ongoing dispute with the nbn co regarding the siting of a fibre pit on a nature strip in front of his property at Takari Avenue in Point Clare. The pit was placed in a location where Mr Manton had a DA for construction work with respect to a driveway. So essentially we are talking about nbn co putting a fibre-to-the-node pit and box right in the middle of a DA-designated driveway. He could not believe it when he saw it; he was incredulous. He complained to nbn that the pit had been placed incorrectly, and he was told that if he wanted to have it moved, despite it being clearly indicated on the DA, he would have to pay $21,700. You can imagine his despair at this. My office have been in contact with the nbn, but Mr Manton's problem has still not been resolved. Nobody seems to take this seriously. Nobody wants to take responsibility.

We heard in your evidence earlier this evening claims that nbn is not responsible; the RSPs are responsible, Telstra is responsible or now Gosford City Council is responsible. It seems this is a theme. It is a mess out there, Mr Morrow. It is a mess of communication. People cannot find their way through it. Malcolm Turnbull's mess is well and truly alive on the Central Coast. Mr Manton, Mr Egan, Mrs Smith and Ms Loaney are all convinced that nbn is not listening to them and not assisting them in any way. Mr Manton remains convinced that the nbn have placed the pit in the wrong location and that blaming the Gosford council is a completely inadequate response.

CHAIR: Is there a question there, Senator O'Neill?

Senator O'NEILL: My question to you is: have you had contact from these people, and how do you propose to resolve the multiple issues of the same nature on the Central Coast? All people see is a mess, and their communication with nbn co is also a mess.

Mr Morrow : I would have to investigate the details behind this, but we do want the three customers that you speak of to have good service. There is not anything other than just satisfying them that is the focus of the company. It is a complex environment, and I am sure that there are a lot of things that we could have done better behind that. We will investigate that. As I pointed out earlier, we have installed over 1.7 million connections into homes, and some of those do not go as smoothly as we would like. We are focused on those and are improving every day to make sure that it is better and better as we move forward into the future.

I want to correct you on one thing: I was not pointing the finger at the RSPs and saying it was not nbn's fault. The reality is that these are multiple companies that are involved to make this service happen. We work together, taking the responsibility, regardless of whether it sits within RSP, nbn, a delivery partner or otherwise. But, again, for these three customers we will take it on board to find out what is happening and see if we cannot get their issues resolved.

Senator O'NEILL: What about Mr Manton and the placement of the pit and the FTTN node?

Mr Morrow : I will personally follow up on that one to see what has happened.

Senator O'NEILL: How many people have contacted you, nbn co or the minister with problems such as Mr Manton's, with these boxes in the wrong spot?

Mr Morrow : I would be happy to take that on notice.

Senator O'NEILL: What is a secondary node? Just give me a clear understanding of what a secondary node is.

Mr Morrow : I am not sure what a secondary node is. Does anybody back here know? No.

Senator O'NEILL: As I understand it in lay terms from people on the Central Coast who have been speaking to me and my office, they indicate that given some of the failure rates, which we discussed the last time I was here—up to 14 per cent failure rates, and we are seeing them manifest themselves in these communications with our offices—nbn co is going back, where the copper has proved to be inadequate, and putting in secondary nodes.

Mr Morrow : I am not aware even of the terminology of a secondary node.

Senator O'NEILL: Do you have a different terminology for the same thing that I have described?

Mr Morrow : No, not that I am aware of.

Senator O'NEILL: Could you take that on notice.

Mr Morrow : I certainly will, of course.

Senator O'NEILL: I am keen to know: where there are failures, are you putting in additional nodes? What is their purpose? If you are, what is the cost of those?

Mr Morrow : I will take that on notice, but I would be highly surprised if we are putting in additional nodes because there are failures on copper.

Senator O'NEILL: I have one last question. You indicated that you are 'fixing as we go'.

Mr Morrow : Yes.

Senator O'NEILL: What are you fixing?

Mr Morrow : We are fixing myriad things. This is a very complicated process to be able to design, construct, turn up ready for service, get the databases ready to offer the processors, to work with the ISPs to make sure that payments are going to the delivery partners. Remember we are doing tens of thousands a week to produce this. So our process management has to be perfect but it is highly complex, probably one of the most complex undertakings in the time frame that we are working with than any other telecom company has had to endure. So we look within the company and say we are strong process managers and we always have to think about how that process can be better and better each time.

Senator O'NEILL: In the interests of time and others who want to ask questions, could I ask you to take on notice what technical 'fix as you go' problems are you encountering? If you could provide that on notice.

Mr Morrow : I am talking in terms of process improvements so if somebody calls in and does not get an answer straight away, why is it that they did not get an answer straight away? For me to list all of those and archive them would be silly.

Senator O'NEILL: I am not just interested in the management of the people but in the delivery of the service. What are the problems with that? Senator Fifield, could I ask if you have had contact from the members for Robertson and Dobell about matters of the kind that I have indicated here this evening?

Senator FIFIELD: You can ask. I will have to check.

Senator O'NEILL: Will you take it on notice?

Senator FIFIELD: Sure.

Senator BACK: Excuse my ignorance in these things. With regard to residential consumers, is there any way that you can advise or inform the nature of the user in packages of data used? I am not worried about the businesses. I am just try to get a handle on the breakdown of residential users in terms of are they using the service for apparent businesses purposes? Are they using it for downloading?

Senator CONROY: Are you doing deep packet inspections?

Mr Morrow : We do not use the DPI to get into customer data. I think I understand your question.

Senator BACK: I just want to know what the percentage of users is.

Mr Morrow : What Senator Conroy is referring to is the technology where we can look in and see actually how and what people are using it for. We do not have that capability to do that across our network. A layer 3 or ISP that would do that. But we can see enough of what is happening within the network. Talking to the ISPs, the reason that we were seeing that download amount of data increase so much is almost entirely because of video. So if you look at Netflix since it was launched in the country, if you look at what YouTube and Hulu and Stan and a number of others, they represent a large video download construct. So typically what we find in the residential family environmental is a multi-device house meaning a number of people have tablets, TVs and even smart phones and they could be streaming to their individual devices—it may be three or it may be four. We find that after-school period is when we see this spike. Naturally the children come home from school and jump onto Netflix to see whatever their favourite program is or maybe they are jumping on YouTube to find out what the latest sporting event highlights were, and that is predominantly what we see from a consumer usage point of view.

We have not seen so much on the upside. Originally we thought there would be far more uploading of data content but we are not really seeing that grow, as I pointed out in my opening statement.

Senator BACK: So an extension of that question would go back to your opening statement with regard to the satellite services, the Sky Muster service. You said:

…ensuring a good-quality experience for all satellite users. NBN is also ensuring that capacity is allocated for public interest uses like education …

On a remote area cattle station, sheep property or whatever, how in fact do you deliver on that statement you have made to ensure capacity for public interest uses including education? How do you ensure all the capacity is not used up by the stockman downloading videos come time for important communications or for school of the air education or for streaming the auction?

Mr Morrow : We have the ability to prioritise if there is congestion. We will not congest a particular circuit that is going to an emergency based service or an educational based service to ensure that they can stay up and running and not be affected by the service. So if there is an overload within a beam, we can control that to a certain degree. This time around we have learned from the interim satellite solution to be sure that we have regulators that we can put on each of the ISPs in case people that are exceeding their data allocation do not affect other users on other ISPs. Those controls are being put into place with the new long-term satellites.

Senator CONROY: I want to go quickly back to a couple of issues we touched on before. Do you monitor cabinet backhaul or network link utilisation?

Mr Morrow : The fibre that goes from the exchange into the node?

Senator CONROY: Yes.

Mr Morrow : I would imagine we do.

Senator CONROY: Is that what led you to say that the issues are being caused by backhaul provisioning, because you do that monitoring?

Mr Morrow : No. Again, think of a chain and multiple links in this chain—

Senator CONROY: I was just wondering if you had any empirical data to suggest that it was CVC provisioning that was the problem.

Mr Morrow : We know in some cases that we have evaluated that it was under provisioning of CVC. We do know that.

Senator CONROY: When you mentioned that you do that monitoring, I thought you might be able to give us a bit more information.

Mr Morrow : Typically if there is a customer that is complaining, we would go through a number of steps to try and help the diagnosis. The first port of call is to their service provider. That is what their role is in all of this. If they then need to trouble isolate, they will work with NBN to see if there is a problem with NBN or if there is a problem with their network, which is the access to the point of integrations or is it because they are being constrained because of the CVC capacity that they are purchasing from NBN? Or maybe there is something else that has to be examined and looked at. That is something that the ISP does.

Often times what we do is we staff up a call centre because we know a lot of end users want to call us directly and ask us. So we have calls that come in directly that sometimes are related to an NBN issue that we need to sort out, sometimes they are related to an ISP issue that we need to sort out. When a complaint comes in about speed, we will look at it. In some cases, working with the ISPs, they have realised that they have under dimensioned in their starting out of FTTN and CVC capacity. We upgrade that, they pay a little bit more, we solve that problem and we move on.

Senator CONROY: Could I clarify for those listening, I have been assured that the sculling competition is entirely water only. Just to clarify the rules, if Mr Rue says it is commercial-in-confidence, it is one scull and if Mr Morrow answers, it is two sculls—just so that people are very clear what the rules are.

Mr Morrow : What kind of alcohol?

Senator CONROY: No, I said 'water'. It is a water based game. You can join in, Mr Rue and Mr Morrow, with your water there.

What is the fault rate on copper so far? How many tech visits on average are required to commission an FTTN service?

Mr Morrow : I can report to you that the fault rate is consistent with what we have dealt with in the corporate plan.

Senator CONROY: What is that?

Mr Morrow : I would have to take that on notice.

Senator CONROY: Is the take-up twice, three times, four times? I appreciate the point you made in estimates and it is on target so I am just interested.

Mr Morrow : I will take it on notice.

Senator CONROY: Are the menu of steps in the activation process for MTM technologies? There seems to be a lot of problem orders being incorrectly handled and ISPs keep suggesting to me that it is NBN Co.'s fault.

Mr Morrow : There is not any one company that is only at fault. We work together to make sure the process is smooth.

Senator CONROY: Do you have any manual processes that are still in activation for MTM, not for FTTP?

Mr Morrow : It is meant to be automated. That is the design of it. In the early stages, there are fallouts that we refer to that then have to be manually processed. But the intent is that it is going to be automated all the way through. We are seeing that rate. We monitor that, we talk about that on a regular basis and that is improving, which is helping the activation rates go up. As I also said in the half-yearly results, we are going to take the activation rate from 7,000 a week currently to 15,000 by the end of the month and it is because of that automation that we can achieve those numbers.

Senator CONROY: So at the moment they are still manual. I understand in the early stages of FTTP there was a manual in there.

Mr Morrow : On an exception basis there is.

Senator CONROY: I want to turn to an NBN document that appeared in the media: IOP 2.0 FTTN review dated 26 February 2015. It was a presentation. It was updated by Finance on 6 March 2015. I would like to confirm some fundamentals set out in the FTTN presentation on page 10, where it states: NBN Co. estimates that 24,544 nodes will be built nationwide FTTN. Is that right?

Mr Morrow : The document that you refer to, somebody showed me a copy of that. I cannot confirm that that is even a valid NBN document. If it was, it would be commercial-in-confidence. I cannot disrupt—

Senator CONROY: Is anybody else in the country building an FTTN network?

Mr Morrow : Anybody in the country can create a document.

Senator CONROY: Does anybody else in the country own the copper that would allow them to build an FTTN network?

Mr Morrow : I am not sure I follow the relevance.

Senator CONROY: How many nodes are you building? Is it the 25,544 set out in the NBN document? You want to say, 'I cannot confirm', but everybody knows it is your document. The question is a very simple, straightforward one. I do not believe it could possibly be commercial-in-confidence because there is nobody else who owns the copper; therefore nobody else can access your copper to compete and build a node network with you. So is the estimate of 24,544 nodes in the document leaked from NBN Co. an accurate number?

Mr Morrow : I cannot confirm anything that is in that document. If that was our document, it would be commercial-in-confidence. I cannot even confirm that it is our document. Anybody can prepare something of that nature. Therefore the information that you are asking, if you want to know the number of nodes or something then I am happy to take that on notice.

Senator CONROY: You do not know the number of nodes?

Mr Morrow : I do not know on the top of my head the number of—

Senator CONROY: Does 24 ½ thousand sound familiar? Does it sound about right? Mr Rue, you are actually in charge of costing—

CHAIR: I think you are right now asking Mr Morrow to speculate.

Senator CONROY: I am not asking him to speculate; I am asking him to tell the truth.

CHAIR: You asked him to speculate. It almost sounded like to me like you are asking him to pick a number out of the sky when he said he would take it on notice.

Senator CONROY: No, I am asking him to tell the truth.

CHAIR: Mr Morrow said he would take it on notice. Senator Conroy, I think that is bordering on being very unparliamentary indicating that Mr Morrow is now not telling the truth.

Senator CONROY: Will you just go and read the rules of the Senate before you start quoting them.

CHAIR: Senator Conroy, it has gone so well so far. Let us just continue.

Senator CONROY: Yes, and the first factual question that was asked, he refuses to answer.

CHAIR: Intimating that Mr Morrow is deliberately misleading—

Senator CONROY: I did not say any such thing. I said I am seeking to get to the truth of how many nodes are being used, nothing more.

CHAIR: Yes and you implied that he was not telling the truth. Mr Morrow, are you in a position to answer that question?

Mr Morrow : No I am not.

Senator CONROY: You have no idea? You cannot give us a ballpark figure? Mr Rue, the man in charge of doing the costings of the exact number of nodes that you are building, has no idea?

Mr Morrow : To clarify your question, are you asking how many nodes will be built by the time the network is completely rolled out?

Senator CONROY: No, I am asking in relevance to the document. I expect that you are probably building more than 24,000 but I am happy for you to say 24,000 was only up to a particular point in the build.

Mr Morrow : Again, I cannot comment on the document itself. I cannot confirm that it is even an NBN document. If you have a question around how many nodes by a certain point in time, I can happily take that on notice and we can look at that.

Senator CONROY: Mr Rue, have you done a calculation in your corporate plan about how many nodes will be built and what the cost of building those nodes will be?

Mr Rue : We have certainly done the calculation of the cost per premise and the capex.

Senator CONROY: No, the cost of the actual physical nodes. You must know how many are going to be built to cost it.

Mr Morrow : We will have to take that on notice.

Senator CONROY: You have actually done a costing and you do not know?

Mr Rue : I do not have it here with me.

Senator CONROY: It is remarkable that you do not have any information that would actually be useful for the committee. It is treating the committee with contempt, Mr Morrow.

Mr Morrow : We respect this committee. We respect every senator around the table.

Senator CONROY: Misleading a Senate committee is actually a serious offence.

Mr Morrow : Again, we know you want accurate information. If we can provide it without jeopardising the commerciality of the business we would happily do so.

Senator CONROY: What commerciality could possibly involve you telling us an accurate number of nodes that you intend to build?

CHAIR: Senator Conroy, Mr Morrow has taken that question on notice—

Senator CONROY: And then he gave a commentary. I am commenting on his commentary.

CHAIR: Saying that Mr Morrow is now deliberately misleading the committee, when he has agreed to take this question on notice to provide you with factual information so that he is not misleading this committee—

Senator CONROY: Could you actually read the rules of the Senate before you start—

CHAIR: Let's not go down this path again.

Senator CONROY: And not mislead about what I have said. You have just put words in my mouth that I did not actually speak.

CHAIR: Let's just clarify this: you have asked Mr Morrow for some very detailed information and Mr Morrow has indicated that he cannot give it to you tonight because he does not have the exact figures—is that correct, Mr Morrow?

Mr Morrow : That is correct.

CHAIR: But you have agreed to take it on notice and to provide the exact information to Senator Conroy, as long as it is not commercial-in-confidence—is that correct?

Mr Morrow : That is correct.

Senator CONROY: I am simply asking for the number of nodes.

Mr Morrow : By which time or in the total build?

Senator CONROY: At the end; I am happy to take it at the end. I will come back to whether this describes the end, but the end.

Mr Morrow : I will take that on notice.

Senator CONROY: But you are qualifying it on the basis that it might be commercial-in-confidence and, therefore, you will not give it to us anyway. That is what it sounds like. I just want to clarify that.

Mr Morrow : It is a general comment for the water drinkers to make sure that they have a couple of drinks of water.

Senator CONROY: I think they are drowning at the moment, but I just want to clarify, seriously, that even if you can get that number, which both of us know you have available to you—and I am shocked the chief financial officer is not able to give us that figure; I appreciate that you might not have it off the top of your head, but your CFO should certainly have it—tomorrow or the next day or whenever, you are not guaranteeing you will tell this committee how many nodes you are going to construct, because you are claiming a commercial-in-confidence exemption.

Mr Morrow : I am not making a claim—

CHAIR: My understanding from Mr Morrow's response—

Senator CONROY: He was in the middle of an answer; you have interrupted him.

CHAIR: You have asked the same question of Mr Morrow several times now—

Senator CONROY: I am asking him to clarify his answer.

CHAIR: I have clarified it with Mr Morrow and he has reclarified that he does not have the information on hand; he will get it to the committee on notice—

Senator CONROY: That is not what he said.

CHAIR: Yes, it is. He will check whether and he will advise us if he believes it is commercial-in-confidence and the basis on which he believes it to be, but he did not say that it is—is that correct?

Mr Morrow : That is correct.

CHAIR: He did not say that it was commercial-in-confidence and—

Senator CONROY: I am bemused as to how he cannot know whether the number of nodes is commercial-in-confidence. What testing methods determine if copper is viable—a standard line test, an open and short or a full CableSHARK interference investigation level? And you do not bring people here because you tell me you can answer all your questions.

Mr Morrow : Even if I brought 100 people here we would not be able to answer your question—

Senator CONROY: Do not try that rubbish with me. If someone who actually knew something about deploying a fixed line network was here, they could answer that question.

Mr Morrow : Is your question: what do we look at—

Senator CONROY: What testing methods determine if copper is viable—a standard line test, an open and short or a full CableSHARK interference investigation level? I am sure someone will help you with those terminologies.

Mr Morrow : I will have to take that on notice. I cannot give you the specific details—

Senator CONROY: But you do assure us that you can answer all the questions that we could possibly want to ask, no matter what level, as your reason for not bringing other officers to the table.

Mr Morrow : They would not be able to answer those questions.

Senator CONROY: I have more confidence in your staff than you do.

Senator O'NEILL: Somebody would be able to answer the question if they are doing it.

Senator CONROY: Is there a reason that you are not able to contact someone inside the company—and I am sure that you have people watching and listening; you have a regular tweet going out every five minutes while we are here—and get us the number of nodes by the end of the hearing—that is, one hour and 10 minutes?

Mr Morrow : Probably not. I would love that, but if our employees are up I would like them to go home and go to bed, and spend time with their families and get some rest. We have a lot of work to do tomorrow. It is 9.49 in the evening.

Senator CONROY: During October estimates, nbn told the committee that you had bought 180,063 metres of copper at a cost of $14 million—what are you up to in your copper? How much have you purchased and at what cost?

Mr Morrow : I do not have that here.

Senator CONROY: Mr Rue, you answered the question last time.

Mr Rue : I will have to take that on notice.

Senator CONROY: You actually knew the answer last time.

Mr Rue : I do not have it with me, sorry. We will take that on notice. What did you ask exactly—metres and?

Senator CONROY: Last time you said you bought 1,860 metres of copper at a cost of $14 million. What are you up to in new copper? How much have you purchased and at what cost? It was not commercial-in-confidence last time, so I am guessing we might just get an answer to that one.

Mr Rue : I do not have that here. I do have an answer to a question that you asked earlier though. I found a report to help you. The number of active premises you asked, over 140. So 200 and 5,000 is 28; 500 and 200 is three.

Senator CONROY: They have doubled!

Mr Rue : And 1,000 and 400 is 23, although, as Mr Morrow said earlier, I think a lot of those are trials. I am not sure how many those are.

Senator CONROY: I hope you have their names and addresses.

Mr Rue : So there are 28, three and 23—so 54 names to get.

Senator CONROY: Thank you for that. That is a lot of work. I am sure you have a comms unit that can find them. Turning to the Optus HFC—and that is another document that has made its way into the public domain. I will come back to it in a moment with its exact title, as it is not in H. This document, which is marked 'draft' states 'FOUO: Commercial—Confidential'. It is titled HFC Plan B: overbuilding, Optusand is dated 3 November 2015—not that long ago. Some useful information made its way, despite your best efforts, into the public domain. As you know, the previous government's plan was to decommission the Optus HFC, so unsurprisingly Optus did not invest in it and had not invested in it since the late nineties. Equally unsurprisingly, we learnt from nbn's own documents:

Optus network is not fully fit for purpose

some Optus equipment arriving at end of life and need to be replaced

Optus nodes are oversubscribed compared with Telstra and will require node splits

Existing Optus CMTSdon't have sufficient capacity to support nbn services

Noise (ingress) causing interference and degrading end-users speeds

Multi-path DA transit complexity

Mr Morrow, could you tell us about noise ingress—how it causes interference and degrades end-user speeds?

Mr Morrow : Again, hear me out on this. As far as any document goes that talks about another company's product, I would not speak to it; I would not validate that document. However, I will speak to you about the gist of what you were referring to in whatever document it is that you are reading. I would point out that fit for purpose for nbn's intention on HFC—

Senator CONROY: My specific question was around the one point in particular. It refers to:

Noise (ingress) causing interference and degrading end-users speeds

I was wondering if you could explain to me what causes that.

Mr Morrow : Across an HFC network, for a variety of reasons—the type of connectors, the type of multiports that are out there, the taps that are used—it can have a certain signal-to-noise ratio. That can impact the speed that can be optimised through that network. If you wanted to optimise that coaxial network for speed then you would have to reduce that noise level.

Senator CONROY: I am very concerned about one of your employees, Mr Steiger. Could you provide us proof of life?

Mr Morrow : I am sorry?

Senator CONROY: Could you provide us proof of life?

Mr Morrow : I can assure you there is no death certificate.

Senator CONROY: Well, I am not counting that as proof of life! Until he turns up here, as promised, I am going to continue to be very concerned.

Mr Morrow : You have seen him once.

Senator CONROY: I know he was here once. It is just he has vanished off the face of the earth, and I would appreciate, the committee would appreciate, some proof of life.

CHAIR: Senator—

Senator CONROY: I am moving on.

CHAIR: No, no. You might be surprised by this, but I was actually just going to inform you that, at the very end of this, I will be having a talk to nbn about their next appearance and things they could do to better prepare in terms of witnesses. So there you go.

Senator CONROY: I do genuinely appreciate that.

Senator O'NEILL: We will get good speeds here soon, and then they will be able to download the information properly.

Senator CONROY: According to nbn's own documents, it will cost $700 million extra capex to patch up this network which does not appear to include complexity costs, like building extra IT systems. Will you be using the Optus HFC? If so, for how many premises?

Mr Morrow : Again, anything about what the cost of that would build could be commercial-in-confidence.

Senator CONROY: Skol!

Mr Morrow : If you are reading from that document that you call was leaked, I cannot validate if that was even a bona fide, legitimate nbn document for the reasons of protecting the commercial interest of the company and not having the taxpayers pay any more money than what they already are dedicated to with this NBN.

Senator CONROY: So back to my actual question: will you be using Optus's HFC? And, if so, for how many premises?

Mr Morrow : Yes. The intention is to use the Optus HFC network. The exact number is still being evaluated. There are a number of other elements that we are in a commercial discussion on that would help with getting Optus's help.

Senator CONROY: You own the network now, don't you?

Mr Morrow : We do not own it until we actually take it over. We have a right to it if we decide to use it, and when it is handed over through the procedures—

Senator CONROY: But you have already paid $800 million—that is a fixed—

Mr Morrow : No. We have not paid anything for that network.

Senator CONROY: I promise you—

Mr Morrow : As the senator well knows, that $800 million was a function that was in the original definitive agreement with Optus that would pay them for their customers moving over to the NBN network. The deal that was struck with Optus paid nothing for the use of the HFC network.

Senator CONROY: So, originally, plan A is outlined in the document, and described as using 470,000 Optus premises. Are you indicating that you have done no estimate? Mr Rue, how do you manage to do a costing when you do not have an estimate of how many homes will use the Optus network? How do you build a business plan when you have so much dramatic uncertainty. You must make a calculation, surely.

Mr Rue : These were plans prepared at a point in time. I think if you read the corporate plan, you can see that we very carefully say that it was based on information at the time and estimates at the time. Any estimates may change.

Senator CONROY: Now, I am asking you what the estimate was.

Mr Rue : As Mr Morrow said, we are still working through what it will be going forward.

Mr Morrow : It is in the hundreds of thousands, though.

Senator CONROY: I want to talk about some of the complexities that arise from using the network. You need to implement the 'Orion deal'. Could you explain this, please? What is the Orion deal?

Mr Morrow : That was the codename given to the revised definitive agreement with Optus. So, as we revised the original DAs at Telstra and the original DA of Optus, that was the revision that we struck earlier last year.

Senator CONROY: You need to set up an IT system whether you use the Optus network for one home or for 100,000 homes. You have to have an IT system to interact with Optus. Is that right?

Mr Morrow : No. The idea that an HFC network, whether we get piece parts from Optus and piece parts from Telstra, or build new piece parts of HFC within the nation, that all connects back from a network element point of view, a physical network inventory point of view within the IT systems that we build. We do not build that separate for pieces of the network like that.

Senator CONROY: So you do not need to set up a specific IT network just for Optus, but you do have to set up a specific IT network for the HFC?

Mr Morrow : That is correct.

Senator CONROY: Have you quantified those costs yet?

Mr Morrow : We had some initial estimates, I believe, that we used within the planning numbers—yes.

Senator CONROY: What is the Novo Modo contract?

Mr Morrow : I do not know.

Senator CONROY: Who would be the person who could answer that question? Which of your officers could answer a question about the IT set-up for the—

Mr Morrow : If you want to know the definition of novo modo we would have to take that on notice. Do you have a context to put it in?

Senator CONROY: 'There is also a significant effort to set up the Novo Modo contract, and uncertainty.'

Mr Morrow : Again, there are project names that are being used within the company. It could very well be a project name for something. I do not get into the KGB, CIA codename structures when we bring the executives in for the committees where we are making these decisions.

Senator CONROY: I thought you assured us you would be able to answer. The reason there are only two of you here is that you could answer all my questions. You can take that on notice. I certainly accept you can take that on notice.

Mr Morrow : I said that we would answer the questions you have, either directly or by taking them on notice. That, of course, is with the caveat of it not being commercial in confidence.

Senator Fifield: If I can just add that from recent experience in social services, even with about 200 public servants sitting behind you, there are still many questions that need to be taken on notice, because of the level of granularity.

Senator CONROY: If you decide you are going to dissemble before the committee and not bring officers who can actually help the committee. The problem here is pretending you can answer the questions up-front, and not bringing other officers whom you know can answer the questions. I am still eager for proof-of-life from Mr Steiger, but there are two or three other officers. Is Mr Adcock still employed by the company? Is he on contract?

Mr Morrow : No, he is not.

Senator CONROY: Was he put on a retainer or consultancy after he resigned from the company?

Mr Morrow : No, once his termination date was up—

Senator CONROY: How long was he on gardening leave?

Mr Morrow : The term of his employment ended, I think, in January.

Senator CONROY: When was he officially relieved of his duties?

Mr Morrow : I transferred him out of that department and put Peter Ryan in—I think it was in November.

Senator CONROY: So he stayed on board for three months without any duties?

Mr Morrow : He still had duties. He had a transition consultant role to the executives and me.

Senator CONROY: Can I come back to the rating you talked about in your approval for FTTN. Is that a rating that combined FTTN and the FTTN/B? You bundle them up usually—

Mr Morrow : It was a combination of B and N.

Senator CONROY: What is the difference between the B and the N?

Mr Morrow : It was not presented to me as such. It was combined.

Senator CONROY: My understanding is that the B got an eight and the N got less than seven, which got you towards your seven. Could you confirm that?

Mr Morrow : We will take that on notice.

Senator CONROY: What is the proportion of Bs versus Ns?

Mr Morrow : In terms of the study?

Senator CONROY: In terms of the study, yes.

Mr Morrow : Again, we will take that on notice as far as actual numbers are concerned.

Senator CONROY: Getting back to the leaked FTTN/B product consultation paper, which somehow appeared in public, in April 2014. On page 19 this paper states in '3.1—In-Home Wiring and Central Splitters':

VDSL2 is particularly sensitive to the quality and configuration of in-home wiring in that the speed of the service can be adversely affected if wiring is poorly configured, e.g., if stubs or pairs are connected in parallel. In most cases the installation of the central VDSL2 splitter located at the first socket in the premise is all that will be required to deliver a quality FTTN/B connection.

Are you familiar with this document?

Mr Morrow : I do not know which document you are referring to.

Senator CONROY: It was leaked into the public domain. It is titled 'FTTN/B Product Consultation Paper'. Are you familiar with that one?

Mr Morrow : Not its details, no.

Senator CONROY: Can you confirm that it is your paper?

Mr Morrow : No, I cannot.

Senator CONROY: I am tricking you, actually. Your company issued it. 'The following deliberately simplified diagram shows where a central splitter is required to be installed,' which means you do own it. 'Good configuration/Bad configuration'—I am indicating the diagram in the document.

CHAIR: Can you clarify for Mr Morrow and the other committee members what document. You have alluded to a leaked document—

Senator CONROY: I tricked him. It was not leaked.

CHAIR: Yes, I know. I do not think it is very helpful for any of us, particularly at this time of night.

Senator CONROY: I pretended it was leaked so that he could deny the existence of a document that he himself issued.

CHAIR: If you could please clarify the document that you—

Senator CONROY: I have read it out twice. I will read it out again.

Mr Morrow : I do not have a copy.

CHAIR: Are you aware, Mr Morrow, of the document Senator Conroy said he is reading from?

Mr Morrow : Not from the name, no.

Senator CONROY: 'FTTN/B Product Consultation Paper'. I am sure somebody in your company must know about it. It was actually publicly issued—

Mr Morrow : Do you have a copy for us?

CHAIR: Would you like to table a copy or provide a copy. If you could actually provide it to Mr Morrow so that he can see it.

Senator CONROY: The company issued it. I tricked him, to make him look silly, and it worked.

CHAIR: If you want to continue this line of questioning it would be helpful to give it to Mr Morrow.

Senator CONROY: I would like it back. As I said, it is actually a real document issued by the company.

CHAIR: Give Mr Morrow an opportunity to have a look at it so that he knows what document you are referring to.

Senator CONROY: It is an industry consultation paper. It has been distributed by the company.

Mr Morrow : What diagram are you looking at?

Senator CONROY: On page 19, '3.1—Home Wiring and Central Splitters'.

Mr Morrow : Yes.

CHAIR: Mr Morrow, before we continue, because the committee does not have the benefit of the document that you now have could you confirm for the committee that you recognise the document.

Senator CONROY: I am happy to table it.

Mr Morrow : I do recognise the document.

CHAIR: And it is an nbn co document.

Mr Morrow : I would have to confirm the contents of that to be sure, so I would not do that in haste. But I would say that in general, for the purpose of the question the senator has asked, it would look like it is the bona fide nbn document, but I cannot say it with certainty. Senator, seriously, if you want me to be accurate on this—

Senator CONROY: I would like you to bring officers to the committee who can answer questions on your own documents.

CHAIR: Senator Conroy, at least give Mr Morrow the opportunity to answer the question.

Senator CONROY: Where is Mr Simon? He would confirm to you that he issued this paper. Why is Mr Simon not here? He can confirm that it is your document.

CHAIR: Senator Conroy, you have asked three questions in a row. Let Mr Morrow answer your first question and then we can move on.

Senator CONROY: I have asked him if it is a real document and I am not sure what the answer is.

CHAIR: If you will give Mr Morrow an opportunity to continue his answer. Mr Morrow, you do recognise the document?

Mr Morrow : I do, and I am looking forward to the question.

Senator CONROY: I recall that we discussed this matter in May 2014, at the other committee, where it was established that without the installation of a central splitter FTTN would deliver reduced speed and reliability. Is that correct?

Mr Morrow : I believe that is correct.

Senator CONROY: Referring back to Hansard, on page 58, on Monday, 5 May 2014, Mr Adcock said in response to my questions about self-installation:

Mr Adcock : On our own document, as I recall, if there is a self-install the speed guarantees cannot be stepped up to.

Senator CONROY: So reduced speed and reliability, as per your document.

Mr Adcock : Consistent with the current self-install models in most DSL services today.

So, can I take you through your WBA, the wholesale broadband agreement, in regard to FTTN. At what point is the NBN network boundary in the FTTN footprint? That is, to what point in the premises will NBN provide assurance for service levels?

Mr Morrow : It is to the first jack within the house.

Senator CONROY: Sorry, the first what?

Mr Morrow : The first jack within the house.

Senator CONROY: For those who have not spent their life torturing themselves about this, could you explain what you mean by 'jack'?

Mr Morrow : Typically, we are responsible for the cable going down the street, the cable going up to the side of the home and the cable wiring from the side of the outside of the home to the inside, to the first plate or the first jack. At that point, the homeowner or the RSP takes over.

Senator CONROY: Thank you. I am looking at nbn co's operations manual, version 2.12, effective 6 January 2016. I could mess with you again, Mr Morrow, but I cannot be bothered. It is a public document.

CHAIR: I think we are all grateful for that at this time of night, Senator Conroy.

Senator CONROY: It states on page 103 that nbn co can provide a professional installation but that it is 'optional and not part of a standard installation'. Is that correct?

Mr Morrow : I will give you the benefit of the doubt. Yes, it is.

Senator CONROY: Okay. Take me through the professional installation process. Will this involve in-home wiring?

Mr Morrow : I will take that on notice.

Senator CONROY: You do not know? You promised me you could answer the questions.

Mr Morrow : I do not know how to respond to you when you keep saying that. I told you that we will get every question that the committee puts forward answered, if it is not commercial-in-confidence. I still maintain that. The other option is that if you have all the questions lined up, as you do, you can send them in advance, and then Stephen and I could be better prepared to answer your questions.

Senator CONROY: How about you bring the other officers who could actually answer the questions without going through this comedy?

CHAIR: Senator Conroy, I have said I will be addressing this issue at the end of this evening.

Senator CONROY: I do appreciate that. Mr Morrow, professional installation would involve truck rolls, correct?

Mr Morrow : I presume so, yes.

Senator CONROY: You are still going into the premises for that sort of installation, if there is a professional installation process?

Mr Morrow : Yes, if it is a case of us doing some inside wiring then I assume there would be a truck roll and somebody walking inside the house.

Senator CONROY: So far, how many people have requested professional installation?

Mr Morrow : I will take that on notice.

Senator CONROY: Do you incur a cost when there is a truck roll, or do you fully offset that to the customer? In other words, is there a charge to them?

Mr Morrow : We will take that on notice.

Senator CONROY: The operations manual says a professional splitter installation is optional and not part of a standard installation. If you have a professional splitter installation, I assume that, as it is not part of a standard installation, there is a cost. In fact, your document goes on to specify the cost.

Mr Morrow : I would feel quite comfortable that any cost associated with the splitters were factored into the business model and into the cost-per-premises estimate that we would have.

Senator CONROY: It says that a professional splitter installation involves nbn co personnel attending the relevant end-user's premises to install a central splitter, which will comply with the relevant standard. It goes on to say that a professional splitter installation 'may be ordered by an organisation in accordance with clause 4.5.22 or occur in accordance with section 5.24'. It says, 'The charges which apply for a professional splitter installation are specified in the price list.' It goes on to give a price list. My point is that the charges would not be in there. If you are actually charging the cost to the consumer then I am assuming you are recovering costs.

Mr Morrow : Any cost borne by us would be factored into the business model if it is an added service. There was a point in time when we talked about whether the splitters would be even needed. If it was an option that somebody wanted or felt was needed, the question was: would we provide the service? I believe that is what you are referring to in the document that you are reading out. I would also point out that it is an April 2014 document. Those were early days. There has been a lot of consultation going on. Many things have changed. If there is a question—

Senator CONROY: No, I am quoting from your operations manual, version 2.12, effective 6 January 2016. It is not the previous one.

Mr Morrow : And your question is?

Senator CONROY: What I was trying to get to is whether you are incurring any cost, including the truck rolls and hiring the people, or fully offsetting that in a charge to the customers. Then I said, 'Do you have a price list attached?'

I am to a degree trying to find out whether or not you offset the cost. I think you do, but that is what I am trying to ascertain. I am sure Mr Rue is able to help.

Mr Rue : I am sure we do, but we will have to take that on notice.

CHAIR: Senator Conroy, Senator Ludlam has a few questions, so we will go to Senator Ludlam and then come back to you.

Senator LUDLAM: Apologies, Mr Morrow and colleagues; I have been chasing other committees, so let me know if some of the stuff I am about to put to you is already on the transcript. I am happy to roll forward. I have a couple of general questions and then one specific one which go to the user satisfaction surveys that nbn co undertakes. I think these might have been traversed briefly earlier. You have identified that the satisfaction levels of your users for fibre to the premise and fibre to the node were approximately the same and had a user satisfaction survey score of 7.7 out of 10. So far so good?

Mr Morrow : That is correct, yes.

Senator LUDLAM: Did you address that in your opening statement?

Mr Morrow : We did in terms of the announcement of that. Then there were several questions asked about the details behind it.

Senator LUDLAM: Great. Maybe I will just go straight to the specific. How long have you been conducting these user satisfaction surveys?

Mr Morrow : This was conducted late last year and was the first of many to come.

Senator LUDLAM: That was the first you had done?

Mr Morrow : That was early on in terms of the deployment. We will have many more that we are going to follow up with.

Senator LUDLAM: Okay, but that is the first time that you have done that.

Mr Morrow : Yes, for FTTN.

Senator LUDLAM: What other kinds of access technology have you surveyed in the past?

Mr Morrow : FTTP and fixed wireless.

Senator LUDLAM: So the reason it is the first time you have surveyed on FTTN is that it is the first time you have enough of a customer base to make it worth asking the questions.

Mr Morrow : To have a statistically valid sample.

Senator LUDLAM: Okay. Can you either table for us or point us to where on your website we can find a breakdown of the user satisfaction scores for the last three years based on access technology?

Mr Morrow : I do not think it would have been published on the website. I can take it on notice to provide that to you.

Senator LUDLAM: I appreciate it. Based on fibre to the node is year 1, so that is useful. When did you start asking about fibre to the basement?

Mr Morrow : That was also included in that same trial.

Senator LUDLAM: First time?

Mr Morrow : Yes.

Senator LUDLAM: And presumably you have two or three years of fibre to the premises survey data—

Mr Morrow : That should be correct, yes.

Senator LUDLAM: Because that was you inherited with the small customer base on FTTP.

Mr Morrow : Correct.

Senator LUDLAM: Are you surveying people on your satellite or wireless solutions?

Mr Morrow : For the wireless we are. That one has an 8.1 out of 10 rating. That is one of our highest.

Senator LUDLAM: 8.1; people were just happy to have something.

Mr Morrow : They were happy to have that service.

Senator LUDLAM: Anything you can provide us that is longitudinal and broken up by access technology would be valuable.

Mr Morrow : All right.

Senator LUDLAM: Of the user satisfaction scores you have just identified, fibre to the basement was 8.4. That was from February 2015. You recorded 8.4 for fibre to the basement. But in February of this year the combined user satisfaction score for fibre to the node and fibre to the basement was 7.7. It has actually dropped quite a bit, so what is your take on why the scores have dropped?

Mr Morrow : I think we are mixing apples and oranges there. The question on notice that we will take will clarify. Remember that there is an installation experience satisfaction score and then there is an actual use of the product satisfaction score. We will provide all of that in the breakdown for you.

Senator LUDLAM: Good—as much as you are able to disaggregate. When you are doing your user satisfaction surveys, do you disaggregate fibre to the node and fibre to the basement?

Mr Morrow : We do know which is which within but we lump together in that score the combination of both.

Senator LUDLAM: Your users might not know—your users might not care—but I presume it would be important for the company to know.

Mr Morrow : Indeed. Remember that it is basically the same kind of technology and we are trying to get a feel for whether people are satisfied when they have the last 50 metres of copper that they are using.

Senator LUDLAM: But, if it is in the basement, it might be the last dozen metres, whereas, if it is a node, it might be 500 metres to the street.

Mr Morrow : It might be the last 50 in the basement and it might be the last 500 in fibre to the node; but, again, that is what we are looking at from a service point of view. We feel quite confident with the sample size that we have. Admittedly it is early and small, and that is why we will continue to do this over the coming months.

Senator LUDLAM: Can you de-lump those numbers for us?

Mr Morrow : I should be able to. We will take that on notice.

Senator LUDLAM: I would have thought so. Thank you. I also believe—mainly because I have had one eye to Twitter—that we have had some discussion thus far about digging up people's rose bushes and driveways. Is that true?

Mr Morrow : There was a discussion from Senator O'Neill about a node that was put within the space of a driveway.

Senator LUDLAM: Okay. What an atrocity. I want to go to the general principle rather than an individual's driveway. You have made public comments to the effect that the general public will obviously prefer a fibre-to-the-node build as nbn co is not going to need to be digging up driveways, people's gardens and so on.

Mr Morrow : To be correct: it is that they are happier that we are not out there digging their driveways up and they would prefer that we did not.

Senator LUDLAM: Okay. I am presuming that you can confirm for us—unless the technology has changed since the last time I asked these sorts of questions that a fibre-to-the-premise fibre distribution hub does not require mains power; it is a passive unit?

Mr Morrow : No, you need power—

Senator LUDLAM: Fibre-to-the-premise distribution hub.

Mr Morrow : Fibre-to-the-premise fibre distribution hub does not require electrical power; that is right.

Senator LUDLAM: Right. It is a passive unit, whereas the node cabinet does require mains power.

Mr Morrow : That is correct.

Senator LUDLAM: All right. Step us through this. Is nbn co able to meet all the required standards and regs while using a directional horizontal boring machine or similar machine, however you are installing these things—I have not actually seen it done—to bore underground from the cabinet site to the mains connection point, or are you actually going to need to do a fair bit of trenching to get these nodes hooked up to the mains?

Mr Morrow : I would have to take that on notice. I assume it is a combination of both of those approaches to be able to run the power cable.

Senator LUDLAM: So it is not actually that you are not going to be digging stuff up. You are going to need to dig up quite a bit of stuff, and on a fibre-to-the-premises model you would potentially have been doing a lot less trenching because the nodes—

Mr Morrow : With fibre-to-the-premise, digging up someone's driveway—we do not dig up somebody's driveway. Typically, when we are extending the node to the pillar, that is on the corner of the street. If you want, we are happy to take you out and show you a couple of these sites so you can see them, but they are typically in the footpath area that is in the front of somebody's home but not necessarily within the driveway nor typically going on anybody's property. That was the major frustration of fibre to the premises: digging up their gardens, their driveways, reaching into their backyards.

Senator LUDLAM: And my point is you are going to need to do a fair bit of that to get these nodes connected up to the mains power.

Mr Morrow : No. Remember there are 150 homes to a node. We are only putting in a very short trench to be able to get from the node to the pillar and we do not touch anything else. That is a one-time element for 150 homes where, if we were doing fibre to the prem, we would be digging up 150 driveways to get there, let alone to be able to get out to make sure the fibre can make it to the footpath that is in front.

Senator LUDLAM: Are you stating that, for every premise that you are hooking up to an end-to-end fibre connection, you need to dig up the driveway?

Mr Morrow : For fibre to the premise, yes. That was the plan.

Senator LUDLAM: To dig up?

Mr Morrow : It would almost inevitably be a dig-up of some sort, augering through, trying to pull the cable across—there was a lot of construction for the majority of those homes.

Senator LUDLAM: All right. How many complaints have you had, and is part of the survey work people who are unhappy with people trenching to connect the network to their premise?

Mr Morrow : I would have to take that on notice. In the readouts of the management team to me and the executive committee, that never came up as a major issue.

Senator LUDLAM: It never came up as a major issue.

Mr Morrow : Correct.

Senator LUDLAM: That is interesting. Anything you can provide, whether it is a part of the survey, your regular complaints process or whether that sort of thing gets directed to the RSP.

I have a bit of good news for you. I know good news is in very short supply in late-night estimates committees. Last time, I raised with you a constituent in Kensington in Melbourne. This was a very specific case of somebody who was stuck on a pair gain and told he would not be delivered broadband for the next 500 years. You have gone out, fixed it and got him off that system, and he is actually a very satisfied constituent. I just wanted to pass that back because I know you hear a lot of complaints. There is one satisfied customer out there.

Senator BACK: It certainly wasn't Fifield!

Senator LUDLAM: No, it wasn't Fifield; I am not here to advocate on behalf of people who can look after their own interests! But anyway, between nbn co and Telstra, you fixed this guy's house, and I appreciate it.

Now I am going to try it on again and see if we can score two for two. Probably not by coincidence, again it is somebody in the Kensington exchange. This is three kilometres from Melbourne's CBD. We are just wondering if it is a great time to be alive if you are in the Kensington exchange. This is two for two. He has been trying for more than a year with multiple service providers to get ADSL because the exchange is full and Telstra are basically saying they are not going to put any more ports on the subexchange because they are waiting for you guys to roll past. What do we do with these folks, because they have been told they have to wait till 2018 until they can get broadband?

Mr Morrow : It is a very unfortunate situation. So nbn has nothing to do with Telstra or the other providers of DSL services to get them to invest into more ports until nbn can run by and provide that high-speed service. Unfortunately for us, we try to prioritise against the government direction of the underserved areas—and we are accomplishing that on a proportionate basis—and then it is the speed of the rollout to get to as many people as we can.

Senator LUDLAM: This fellow is now paying 190 bucks a month for his mobile contract. Do we have to go back to him and say that neither Telstra nor nbn co can help him until 2018 and he is stuck on a mobile contract for the next three years?

Mr Morrow : Nbn could answer in terms of the NBN help, and right now there would be nothing that we can do other than what is in the rollout plan.

Senator LUDLAM: I certainly would not ask you to speak for Telstra. Is the Kensington exchange in your rollout plan? Do you have any idea how many people might be stranded under similar circumstances? I am having a strong feeling of deja vu as I am putting my question to you.

Mr Morrow : I am sure that Kensington exchange is in the program, every area within the country is. I am not aware of how many people are trying to get ports but cannot on the DSL.

Senator LUDLAM: Can you get a read for us as to how far away you think your teams are from that particular exchange? Telstra is telling them 2018, but I would rather hear it directly from you.

Mr Morrow : We will take that on notice and find out.

Senator LUDLAM: If you could. This guy lives three kilometres from the CBD of Australia's second largest city—and it is not that they have a slow collection; they have no connection at all.

Mr Morrow : Right.

Senator LUDLAM: Anything you can do? I can provide you with a little bit more specific information on notice if that would assist.

Mr Morrow : Yes, please.

Senator LUDLAM: And maybe we will have another little celebration in May.

Mr Morrow : Great.

Senator CONROY: I am very concerned for one of the listeners, Mr Mackie. Apparently he has been following your answers and self-water boarding. He is not in a good way.

Mr Morrow : Water is good for you though.

Senator Fifield: There is such a thing as water intoxication.

Senator CONROY: There are two other listeners who are claiming overhydration at the moment. Coming back to the issue around FTTN: how many premises in your FTTN footprint has nbn co provided professional installation for to date? Do you provide it or does the RSP provide it? There might be a breakdown between the two.

Mr Morrow : I suspect it is the RSPs, but we will have to take it on notice to get you the specifics.

Senator CONROY: For those people who elect not to have a central splitter installed, they will have to self-install if they do not get it professionally done?

Mr Morrow : I will take that on notice

Senator CONROY: Could you take me through the self-install process? What does it involve?

Mr Morrow : We will take that on notice.

Senator CONROY: Seriously? You are asking Australians to do it and you cannot explain to the committee what is involved? I have no idea.

Mr Morrow : What we typically do is work with the RSPs to make sure—remember they want to own the relationship—

Senator CONROY: No, this is a self-install.

Mr Morrow : I understand. But again, we want to work with the RSPs; they want to own the relationship. It may be that they want to have a truck dispatch themselves to where they put it in; maybe they send the modem equipment to the customer that the customer wants, and that includes our NTE equivalent device and their gateway device that has splitter capability within. A lot of that is really worked very closely with the service provider behind this, but I will happily take on notice your question to make sure that we give you an accurate answer.

Senator CONROY: And the actual self-install process, you will give us the detailed explanation of it?

Mr Morrow : Yes, we will.

Senator CONROY: Will an existing ADSL splitter work with FTTN?

Mr Morrow : I would suspect not.

Senator CONROY: I am happy for you to take that on notice.

Mr Morrow : I will take that on notice.

Senator CONROY: I suspect you are possibly right, but if you can just get the engineers to—

Mr Morrow : Yes.

Senator CONROY: Thank you. If people do not elect to have a central splitter installed, then nbn co will not guarantee speed and reliability. You will not guarantee the 25/5 to RSPs.

Mr Morrow : We will take that on notice.

Senator CONROY: That is what Mr Adcock said. That was part of the earlier discussion, from a year ago.

Mr Morrow : Again, I think a lot has evolved in our discussions and the technology in the approach. So I think we owe you an update in terms of the explanation as to what is happening.

Senator CONROY: But you have agreed you will only guarantee to the first jack?

Mr Morrow : Our responsibility is up to the first jack.

Senator CONROY: So, if a person has to have a splitter installed after the first jack, you are still only guaranteeing up until that point and, if the splitter is not involved—

Mr Morrow : Again, I am not aware of the exact details on it. We would not leave a customer stranded out there, but let me confirm and come back to the committee with a full explanation of what is happening there.

Senator CONROY: I am referring to nbn co's wholesale price list, version 2.6, effective 1 December 2015. I take it this is the latest NBN price list.

Mr Morrow : I think it would be, yes.

Senator CONROY: Your price list states, on page 12, that the cost of a professional install is the labour rate, minimum two hours, plus materials, minimum $10. Is that correct?

Mr Morrow : I would have to confirm that.

Senator CONROY: Would you like a copy of your own document to confirm that?

Mr Rue : It sounds correct.

Senator CONROY: Thank you. If the professional installation is done not at a time of a standard installation, then the cost will be the labour rate, minimum three hours, plus materials, minimum $10. That is correct?

Mr Morrow : If you are asking us to take on notice to confirm a document that you believe is our document that is publicly available—

Senator CONROY: It is a public document that your company has issued.

Mr Morrow : Then why are you asking the question that you want us to confirm it?

Senator CONROY: Because I just want to confirm that these are the costs and that there is no argument about it, because my next questions go from the confirmation that these are the costings that you have provided publicly. I start off by trying to confirm with you that your documents say the following, and then I move on from there. It is a standard procedure.

Mr Morrow : Fair enough.

Senator CONROY: So are we agreeing that I am not misleading you—labour rate, minimum three hours, plus materials, minimum $10?

Mr Morrow : All I can do is say that, if the document is publicly available and it is the most recent one, then I will trust that you are reading it correctly and interpreting it. I do not have it in front of me and I am not familiar with the specifics of it.

Senator CONROY: I am sure someone can flick a copy of it to your iPad in 30 seconds, but I am also equally happy to show it to.

Mr Morrow : Let us assume it is right.

Senator CONROY: I will assume that you assume I am telling the truth.

Mr Morrow : Thank you.

Senator CONROY: Page 13 of your price list states that the labour rate is $75 an hour. That is correct? It reads:

3.4 Labour Rate and Materials

In this section 3:

(a) Labour Rate means $75.00 … and

(b) Materials means the cost of materials …

Shall we just assume that I am not misleading you?

Mr Morrow : Yes. Let's keep assuming that.

Senator CONROY: So the minimum professional installation is $160 wholesale and, if it is done not at the time of a standard installation, then the cost is a minimum $235, which is the labour rate times the hours plus the minimum material cost. Does that sound fair?

Mr Morrow : That seems logical.

Senator CONROY: Maths, Mr Rue—you are the expert. Did I miss a beat?

Mr Rue : Senator, you're going good.

Senator CONROY: Thank you. So people have to pay an extra $160 or $235 if they want to get the quality of the service beyond the first jack.

Mr Morrow : It sounds like that would be the calculation that you have just run.

Mr Rue : That is a charge to the RSP, of course.

Senator CONROY: This is a wholesale price charged to RSPs, who may charge end users even more. That is your wholesale price to an RSP.

Mr Rue : Yes.

Senator CONROY: This is your model that you have devised, Mr Rue, so I am glad you do know it. Under a standard install with FTTP, there is no nbn co charge and no further work required for speed and reliability. But for FTTN, on a standard install, there is no nbn co charge but reduced speed and reliability unless the consumer pays $160 or $235. They are the two choices you get. With modem install you get an RSP charge under FTTP. There is an FTTN RSP charge but self-install is harder for many, and you will explain how it is harder when you come back to us later. The key that I am trying to come to an understanding of, Mr Morrow, is that the questions that I am asking you tonight about the FTTN installation process go to the heart of the problems being experienced in the FTTN footprint. It is frustrating that you are unable to answer even simple questions about the FTTN installation process, taking almost everything on notice. I think the chair is going to talk at the end about meeting the officers who can answer the questions to save the committee time. You constantly draw the attention of the committee to how many hours you spend in front of the committee, but each time you take questions on notice we need to get you back to ask the next question. It is very frustrating, and I hope you understand that. I think the chair is going to take that point up with you.

To summarise, people who cannot afford the professional installation just have to make do with the modem posted to them and whatever best efforts at services that nbn co will provide. I have indicated before that a number of people in the first FTTN areas are having trouble with this approach that the company has taken. I am not surprised that, under the new model you have devised for your rollout, you are getting the sort of feedback that I described earlier and that Senator O'Neill described earlier. What is nbn co's current assumption of the number of FTTN premises that will order a professional install by 2020—so out of the 4.5 million premises, how many will have a central splitter installed? What is your calculation?

Mr Rue : We will take that on notice.

Senator CONROY: Could I also get revenue flowing from this—so it is $160 times the number of premises. That is the minimum. I wanted to talk a little bit about your half-yearly results presentation. Do you have that handy?

Mr Morrow : Yes.

Senator CONROY: On page 10 you have set out the total number of premises that are ready for service. Can you confirm that the total number of homes able to access the NBN as at 31 December 2015 is 1,670,972, which is 14 per cent of the total 11.9 million who ultimately will get the NBN? Mr Rue, does that seem right?

Mr Rue : The 1470 is correct; 11.9 comes from where?

Mr Morrow : That is coming from the documents in the corporate plan. Remember, that is after you have a bunch of new developments that are added. That is not the number of homes that are available to it.

Senator CONROY: I understand that you cannot forecast exactly what home growth is going to be. I do understand that. I am working on the numbers that you are working from, but I accept that that is not an absolutely finite number. Will you meet the Prime Minister's commitment to get the NBN to 100 per cent of Australian homes by the end of 2016?

Mr Morrow : I do not know of any commitment by the year 2016. I came in here in April 2014 and we put together a plan that said 2020. The Minister for Communications then agreed with that, and that is the plan we have been running.

Senator CONROY: I can play the video where he says it, if you like. It was at Foxtel studios; there was a hologram of a football player. I am sure you were not paying any attention at that time, Mr Morrow.

Mr Morrow : I can assure you that he never told me to build it by the year of 2016.

Senator CONROY: He told the Australian people that—that is what my point is. He made a promise to build the NBN to 100 per cent of Australian homes by the end of the year 2016.

CHAIR: Senator Conroy, is this perhaps a question of government policy that would be best addressed to the minister rather than Mr Morrow?

Senator CONROY: No, I am asking whether Mr Morrow can deliver on that promise that was made. Is it possible for you to get the NBN to 100 per cent of Australian homes by the end of this year?

Mr Morrow : No.

Senator CONROY: Just confirming here, too, that you have yet to connect a single home with the HFC?

Mr Morrow : No, that has never been the plan thus far.

Senator CONROY: No, I said at this point today you have not got anyone—

Mr Morrow : Yes, there are some trials.

Senator CONROY: Will you meet the target in your Strategic Review to pass 2.61 million homes with HFC by the end of 2016?

Mr Morrow : No, but that was my choice. I was never mandated to do that. That is something that is fungible within the business. I look at the net overall—

Senator CONROY: I am pointing to an nbn co document, the Strategic Review

Mr Morrow : That was never a commandment made by anybody in government.

Senator CONROY: produced by Mr Rousselot, to whom you paid a large bonus for being about 2.61 million homes wrong—maybe 2.6, 2.61, so let's cut him some slack. He missed the target of 2.61 by 2.6 million—

Mr Morrow : I changed the plan; he did not. To be fair I changed the plan within. It is my prerogative to do so to optimise both cost and time, and hence it was done.

Senator CONROY: Is Mr Rousselot on track for another bonus? He only missed last time by 2.6 out of 2.61 million.

Mr Morrow : I hope so. He is certainly working his back end off and, if he keeps that up, he will deserve a bonus—

Senator CONROY: There is a first time for everything. Can I confirm—

Mr Morrow : I know you like him.

Senator CONROY: I do. I wish he would invite me to go yachting with him on Mr Turnbull's boat. I think that would be deliciously fun.

Mr Morrow : I have not heard the boat in a long time—

Senator CONROY: Have you been on the boat yet?

CHAIR: Senator Conroy, you only have 10 minutes left, so I want to focus your questions.

Senator CONROY: Can I confirm that the FFTN footprints that are being rolled out under your trial agreements with Telstra, the JDWC contract—that is Boolaroo, Belmont, Gorokan, Hamilton, Bundaberg; I could read them all—

Mr Morrow : Yes.

Senator CONROY: How many premises? I think it is around 220,000. Is that the last estimate?

Mr Morrow : That was the original JWDC, yes.

Senator CONROY: Is there a new one?

Mr Morrow : No, we added to it and we expanded the FTTN footprint.

Senator CONROY: Are any other areas part of the contract or will the rest be done under the MIMA contracts. What is the breakdown?

Mr Morrow : The MIMA contracts are now in place. With the 10 agreements that I mentioned, that covers the build across the nation for all technologies. We still have the rates to deal with in the HFC, but everything else is pretty well firmed up.

Senator CONROY: So confirming NBN is not switched on any FTTN premises outside the Telstra JDWC contract or trial?

Mr Morrow : That would be correct.

Senator CONROY: You have not switched on a single home that was not built as part of a trial. Everything that is activated today is still a trial area.

Mr Morrow : I do not think that is fair to call that portion of it a trial. The original deployments were to refine the processes to assess the cost element and, naturally, the rest of it fell into a normal construction.

Senator CONROY: It has been called a trial from the day it was announced.

Mr Morrow : Again, you can call it a trial all you want; it is the normal construction process.

Senator CONROY: I am not the one who called it a trial. The Prime Minister did, I think, you did, I think—

Mr Morrow : More than 100,000 customers—

Senator CONROY: your predecessors did.

Mr Morrow : who are able to access fast broadband over FTTN right now came through that JWDC contract. They are not trial types; that is a full-blown commercial service.

Senator CONROY: Let us blame someone—whoever used the word 'trial' should be waterboarded. They can join the drinking game. To be clear, you are not at scale on FTTN yet—that is correct?

Mr Morrow : We are not at scale at any of the technologies. We are building the networks. That is going to get more aggressive on each element—

Senator CONROY: I will get to the others. You have agreed: we are not at FTTN scale yet.

Mr Morrow : That is correct.

Senator CONROY: Are you aware that in August 2013 the Prime Minister said that the FTTN rollout would be at scale by mid-2014? Are you aware of that?

Mr Morrow : No.

Senator CONROY: So you are nearly two years behind what the Prime Minister said you would be.

Senator Fifield: In opposition in 2013, the coalition had an objective, announced some targets but, on coming into government, we discovered—then Minister Turnbull discovered—that the NBN rollout of the former government was in a much worse state than had been anticipated. The incoming government had to deal with the facts on the ground as they were, which is what we have been addressing since we have taken office.

CHAIR: For those of us on the committee who were not there three years ago, can you quickly refresh our memory of what the figures were three years ago.

Senator CONROY: Mr Morrow was not there either, and Mr Rue was not. You are on your own, Mitch. He will take that on notice. And it could be commercial-in-confidence!

Senator Fifield: Let me use a technical phrase: bugger all people were able to access the NBN in Australia.

Senator CONROY: Dear oh dear.

Senator O'NEILL: This is a reconstruction of history.

Senator Fifield: It is not a reconstruction of history.

Senator CONROY: Mitch is drowning; let's just let him quietly do—

CHAIR: Are you referring to the minister there, Senator Conroy?

Senator CONROY: I apologise, the minister is drowning. Can we just let him do it quietly? Can I move on. You only have ten minutes to go before you asked me to finish.

CHAIR: Minister, are you able to answer that quickly?

Senator CONROY: He has; he has given it the absolute technical definition. He has taken it on notice again.

Senator Fifield: No, I am very happy for the officers to my left to talk about the progress that has been made on the NBN since we came into office—and it is dramatic. Mr Morrow?

Senator CONROY: Sorry, can I get on with my questions? Mr Morrow has already had an opening statement. He has explained all of the magnificent performance, so I would just like to go back to my questions. You have ten or fifteen minutes at the start to do the PR; I would just like to get back to my questions.

CHAIR: Senator Conroy, you asked a question of Mr Morrow just a short time ago about the performance of NBN over two years.

Senator CONROY: No I did not.

CHAIR: Yes, you did, and, as Chair, I am just asking for some further clarification on that. Mr Morrow has the answer, and if you had allowed him to answer we would have been back to you already. Mr Morrow, can you provide us that information please.

Mr Morrow : I think the question that was at hand was predominantly about the scaling of the business. At the end of 2013 there were a little over 300,000 premises that were ready for service. That was a point in time where the company was four years old. In the subsequent two years we are now at 1.75 million homes. The number of homes that we are RFSing on a weekly basis are in the tens of thousands. In fact, as I mentioned earlier, they are hitting a higher number even than that as we speak. We should be close to 20,000 a week by the end of this month. For activation rates, two years ago we were lucky to put out in the hundreds per week, and now we are hitting 13,000, as I mentioned, for the last two weeks in a row. So the scaling of the business has been dramatic over the last two years.

Senator CONROY: I am happy for you to take this one on notice. Could you tell us if there have been any FTTP connections through the technology choice fibre on demand? I am happy for you to take that on notice.

Mr Morrow : I'll do that.

Senator CONROY: Mr Rue, what is the electricity cost of running each node? Now you have enough up and running, have you got an indication yet?

Mr Rue : I do not have that with me.

Senator CONROY: Coming back to the Prime Minister stating that the FTTN rollout will be at scale by mid-2014—

Senator LUDLAM: Before you move on, Mr Rue, did you take that one on notice about the power consumption at the nodes? You said you did not have it and hand.

Mr Rue : I will take that on notice, I am sorry.

Senator CONROY: Now when do you expect to switch on your first FTTN services—switch them on—not done under the trial Telstra JDWC contract. I know you have mentioned you have extended it but, in that extension part—without getting into a debate about the word 'trial'—when do you expect those ones to be?

Mr Morrow : May.

Senator CONROY: And when do you—

Senator O'NEILL: Where?

Senator CONROY: Sorry: where was a quick question from the side? I have got their list, if you want to inform us.

Mr Morrow : I do not have it here, but it has been published.

Mr Rue : We will take that on notice.

Senator CONROY: When does the nbn expect the FTTN rollout to reach scale?

Mr Morrow : Scale—remember the idea of building the network out on the aggregate we will see our peak year in FY18. The different technologies will reach their peak of scale at different points of time but, on the aggregate for the company, we have to be back in about—

Senator CONROY: But I asked about FTTN. I am asking you about one technology: when does FTTN hit scale?

Mr Morrow : I will have to get back to you on that; I think it is about 2018 as well, isn't it?

Mr Rue : What is the definition of scale?

Senator CONROY: I do not want to be cute here, but scale is how it is described by your company, Mr Morrow and the Prime Minister. I do not mind what definition you use. I think Mr Morrow roughly knows what I mean and he has just roughly suggested—without holding him to it—2018.

Mr Morrow : Let me make sure it is clear to the committee: we will continue to be doing more and more on a per-week basis for the next couple of years. At that point, we will hit the peak of what is required on FTTN per week and then you will start to see that settle back down until the rollout is complete.

Senator CONROY: Roughly 2018, and I am happy for you to correct that if it is—is 2018 confirmed?

Mr Morrow : Yes.

Senator CONROY: Thank you. Mr Rue, you seemed to discover what scale meant very quickly then.

Mr Rue : It depends on your definition. If your definition is that most premises will be RFS, then it is fiscal 18.

Senator CONROY: In June 2014, when nbn announced this trial, nbn co said:

The aim is to have the nodes commissioned and ready for provision of FTTN-based services once NBN Co has a commercial FTTN-based product available and the arrangements are in place with Telstra under the amended Definitive Agreements to support those services.

The source for that is the nbn Fact Sheet: 1000 Node Construction Trial—again, a public document.

Mr John Simon, when announcing an extension to the FTTN trial on 1 October 14, also said:

… around 250,000 additional homes and businesses should be able to connect to the network within the next 12 months—subject to the necessary agreements being finalised with Telstra.

And that is cited from a news article quoting Mr Simon. nbn is saying that 250,000 homes will be ready for service on FTTN by 1 October 2015 but, as of 1 October 2015, only 29,000 were switched on. So what was the delay?

Mr Morrow : Senator, again, I think there were issues that we had around some of the contracts that changed some of the plans, but the aggregate in terms of the rollout of what we had expected is on track. As we have said, we have then exceeded our expectations with the NBN rollout.

Senator CONROY: You did not meet Mr Simon's proposed start-up. He said on 1 October 2014:

… around 250,000 additional homes and businesses should be able to connect to the [FTTN] within the next 12 months.

That is Mr Simon in a newspaper article, and nbn are saying that the 250,000 homes will be ready for service on FTTN by 1 October 2015. So 1 October 2014 or 1 October 2015—so I am comparing apples with apples. I am comparing one of your senior official's, Mr Simon's, statement in a newspaper and 12 months later on 1 October, despite Mr Simon claiming 250,000 homes will be ready for service, only 29,000 were. That is just a statement of fact, so I do not know what internal targets you have today, but your external announced target, you missed by 220,000.

Mr Morrow : Our targets are against the rollout. Those targets were first set in late 2013 and reinforced by the board on an annual basis. Every one of those targets has been met on the aggregate basis of the rollout which we are measured by and continue to accelerate. If I choose, which is my prerogative, to say I am going to push one more other technology type within rather than another, I use that as discretion to make sure I optimise the rollout. Although it may be the intent that we start with 250,000 of FTTN at this point in time, as we work within the year, if we deem and I approve that it is more optimal to replace that technology with something else, we shall do so. On the aggregate, we are beating every number out there—the scaling up of the business; more people are getting it sooner. Every budget number that has been set has been met or beaten by the company because of the good, hardworking employees that we have, the strong processes, the attention to detail that management has on the company. Again, from a rollout point of view, the committee should feel good about the progress that we are making.

Senator CONROY: If I could just respond—

CHAIR: Last question, Senator Conroy.

Senator CONROY: Mr Rousselot's targets that he set out publicly for the company failed dismally. Mr Simon's targets that he set out publicly have failed dismally. Why should we believe you when you will not put out any of your targets? All these targets you claim to be meeting are secret targets that you have not put out publicly beforehand.

Mr Morrow : Not at all.

Senator CONROY: Do I have to put the blacked-out one up on the video screen again for you, Mr Morrow? But I am digressing, because I did promise I would finish in a minute. I wanted to thank all those people who have committed self-harm waterboarding themselves tonight. There are too many to name. I look forward to their involvement again when, unfortunately, we call nbn officials to a Senate committee hearing. I think there is a date proposed. I am not sure if you have been advised yet, but there will be a Senate select committee hearing in the next month or two. Hopefully we will find more officers at the table to assist and, therefore, keep the meetings to a minimum. Thank you to all those who have been listening and providing support and committing self-harm.

CHAIR: Thank you very much, Senator Conroy, for that rhetorical flourish at the end. Senator Urquhart, you have a quick question of clarification?

Senator URQUHART: I asked about Devonport and the rollout, and you were going to try and get some information before the end of the day.

Mr Rue : Can you give us two or three minutes?

Senator URQUHART: Yes.

CHAIR: Mr Morrow, while Mr Rue is chasing that point up, there are a couple of matters I would like to address in conclusion. The first is, again, as I said at the beginning, to congratulate you and your organisation. It is very clear from your comprehensive report that the organisation is doing some extraordinary work on one of the most complicated and, I think, technical rollout projects this country has probably ever seen. Clearly there is a lot of good news to share. But, as we can see from the questions, it will never go perfectly. So, in relation to preparedness for these estimates hearings, we—I have only been chair for this one and the last one—have made specific requests for particular officers to appear, and they have not.

As you said, there is a lot of technical information and detail that two people cannot possibly be across. So what I was suggest is that you consider your preparations for the next estimates. As you know, that will be a longer session, no doubt, with nbn. We know it is going to be in the week of 29 May. There are longitudinal themes, so if you and your staff are able to go through and review those themes and make sure that you either have the appropriate officers here, or on hand, so that they can email you some questions and you are able to answer the questions more quickly for the committee members. I think that would also assist you in taking fewer questions on notice, which obviously has a significant workload sitting behind that to get them in on time.

Conversely, I would ask committee members here that if you are going to be quoting from documents on the evening to have copies available, because, no doubt, the nbn co has hundreds, if not thousands, of documents. I think that would assist in a smoother process. Also, rather than necessarily asking for a specific person, if we can get some idea of the area, you can then perhaps better prepare to have the questions on hand for those particular technical areas.

In wrapping that up, I thank you again for appearing. It is an area of great interest to committee members here, so thank you to you and Mr Rue for your appearance. We very much look forward to your appearance at the next estimates hearing in late May.

Mr Morrow : First of all, we do have the utmost respect for the senators, this committee and the Senate select committee. We know everybody is interested in the NBN, and we are proud to be associated with the company. There is nobody that has malintent within the company. We all want to do well. We all want to serve the nation and get broadband to everybody because we think it is a game changer.

I think it is important, in relation to Senator Conroy's question, that I clarify that, from a strategic review of what the rollout is to what the corporate plan is that we issued, on aggregate, we are very much in sync. We are delivering across that. In fact, we are better than planned across the aggregate. I will always move those technologies around. There is never a firm commitment about this number of homes per technology. It is only ever about the aggregate number. That flexibility is needed to be sure that we get broadband as fast as possible to everybody. So, if you see a number of HFC in one plan or one statement or one public announcement that is different to the next, it is because we are internally optimising that. What we want you to measure us against is getting the nation build, and that is the aggregate number. That, again, is the hardworking employees, the delivery partners, the RSPs, the equipment vendors—there are tens of thousands of people that have had something to do with the NBN. It is coming, and it is coming even faster than what was forecast within those plans.

Senator O'NEILL: Mr Morrow, with respect, that was a lovely flourish in the finish there, but the quality of the experience of the people who are getting the FTTN is inadequate.

CHAIR: Senator O'Neill, Mr Morrow—

Senator O'NEILL: Evidence showed that—

CHAIR: Senator O'Neill, you do not have the call. Mr Morrow, I appreciate your comments and I think everybody here knows the challenges that you and the company are facing. I understand that it is probably akin to—and your challenge is—trying to fly the plane while you are still trying to build it. It is a very invidious position to be in. But I know you and your staff have had some impressive results, and you are clearly very focused on delivering the customer service. At the moment you are focused on the big strategic issues, but what I would say, and I think what Senator O'Neill was trying to say, is that, while we need to talk about the big issues with you, we will also be interested in the smaller issues. So, if you have officials who can answer some more of those longitudinal progress questions and also about the customer experience, I think that would be mutually beneficial.

Mr Morrow : If you give us an indication of the topics, we will have the appropriate people here.

CHAIR: I understand, so thank you very much.

Mr Rue : Chair, can I just hold you up for one minute.

CHAIR: Very quickly, Mr Rue.

Mr Rue : Could I ask you, going to the very start of the hearing, for a date of when you want the answers back?

CHAIR: Yes, we did provide that at the beginning of the day. They are to be returned to the committee by Friday, 8 April.

Mr Rue : And could I answer the question on Devonport?

Senator URQUHART: I am more than happy for you to send it to the secretariat, if that is possible.

Mr Rue : Okay. I will do that.

CHAIR: Send it to the secretariat, and maybe, if you have a quick answer, even now, informally, to Senator Urquhart.

Mr Rue : Basically three of the four areas have commenced. The other area is due to commence—

Senator URQUHART: If you can provide a bit more detail and send that to the secretariat tomorrow, that would be great.

CHAIR: That concludes the committee's examination of the Communications portfolio. Senators are reminded that written questions on notice should be provided to the secretariat by close of business Friday, 19 February. I thank the minister and officers for their attendance today. I also thank secretariat staff, broadcasting and Hansard officers. Thank you very much for a great job. Good night, everybody.

Committee adjourned at 23 : 04