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Joint Standing Committee on the National Broadband Network
Rollout of the National Broadband Network

SIDEBOTTOM, Mr Sid, Chair, Cradle Coast Authority

SMITH, Mr Brett, Chief Executive Officer, Cradle Coast Authority

Committee met at 08:59

CHAIR ( Ms Ley ): I declare open this public hearing of the Joint Standing Committee on the National Broadband Network in relation to its inquiry into the rollout of the National Broadband Network, and I welcome all here today. This is the 13th public hearing for this committee, and a Hansard transcript of the proceedings is being made. Before the committee starts taking evidence I remind witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee.

The committee prefers all evidence to be given in public but, under the Senate's resolutions, witnesses have the right to request to be heard in private session. It is important that witnesses give the committee notice if they intend to ask to give evidence in camera. In addition, if the committee has reason to believe that evidence about to be given may reflect adversely on a person, the committee may also direct that the evidence be heard in private session.

If a witness objects to answering a question, the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, the witness may request that the answer be given in camera. Such a request may of course also be made at any other time.

I welcome Mr Brett Smith and Mr Sid Sidebottom from the Cradle Coast Authority. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I invite you to make a brief opening statement and then the committee will ask you questions.

Mr Sidebottom : Thank you very much, and welcome to the Cradle Coast region. Thanks for the opportunity to make a contribution to your inquiry. I would like to read some observations and comments that the Cradle Coast Authority has put together, and invite Brett at any time to join with me in the presentation. The Cradle Coast Authority connects communities, business and government to work together for the good of our region. The key priority of the Cradle Coast region is a telecommunications solution that enables the establishment of a highly skilled innovation-driven development that will help drive competitive advantages, increase relative performance and improve living standards in our region.

The Cradle Coast region is made up of disperse places, communities and industry sectors linked by strong geographical, social, cultural and economic relationships and mutual interdependence. The Cradle Coast region is made up of 114,000 people, or 22 per cent of Tasmania's population. It's 22,500 square miles in size, or 33.1 per cent of the total area of Tasmania. There are some 7,600 enterprises here and some 51,400 employed citizens. The Cradle Coast region has a gross regional product of $5.51 billion, which is around 21 per cent of the state's gross state product. The region enjoys some comparative natural advantages. However, it also faces significant pockets of relative disadvantage. The region needs to transition from a comparatively low-skilled low productivity economy to a more highly skilled and highly productive one. Building our innovation and knowledge capacity is a key driver for this transition.

The original rollout of the NBN was met with excitement and anticipation that it could address issues of social equity, socio-economic equity and advantage between the regions and cities. During the lead-up to the NBN rollout, there was a lot of talk about regions and opportunities for them to grow because of access to super-fast broadband. For example:

Thousands more families and businesses in Tasmania will be able to receive high-speed broadband following the completion of the latest stage of the rollout of the National Broadband Network.

That's from a NBN Co media release of June 2012. Of course, that's over five years ago. The region does not feel a sense of entitlement, nor do we expect a telco service on par with the metros. But we expect one that at least gives us a competitive opportunity. A question the Cradle Coast Authority is often presented with is whether the service provided by NBN Co is in effect designed to make a profit for the company, or is meant to be a national investment in an accessible, fast and affordable game-changing piece of infrastructure, not unlike the national highway system.

The roll out of the NBN into Tassie has been drawn out and fragmented, making it difficult to effectively leverage the new technology to improve the region's competitiveness. High-speed broadband presented an opportunity to future proof regional Australia by introducing technology that provided a level playing field, where geographical location was no longer a barrier to opportunities for innovation, accessing education and training, and business development. There is an increasing push to access services online but, as more and more do so, the infrastructure is not keeping up.

From families to regional businesses, the anecdotal evidence that has arisen ahead of this hearing has been sadly similar—a poor or unreliable service with speeds and capacity worse, no better or only slightly better but sporadic than the previous ADSL models. There now appear to be congestions, delays, dropouts and unreliability during peak times of 3pm to 8pm. Let me share some of the assessments we've been given in relation to the roll out along the coast. From one business operator, 'I am on NBN wireless and it does not seem much quicker than the old wireless, very disappointing.' From another business operator, 'We have satellite NBN at our business. It is slow, particularly during business hours, such that it affects the efficiency of our business and the rate at which downloads occur. At certain times, the connection is lost or not available.' Here is another from Harvest Moon, 'Our current situation is untenable. Our DSL service proved so poor, we were forced to initiate a second DSL service. When it rains heavily, the Telstra service pit fills with water resulting in service to our site being cut. NBN has been installed one kilometre away but we have been advised that we will not be able to access NBN in the near future. We have inquired about the possibility of paying for a line to be brought from the nearest node to our premises. We were informed that it was not an option, leaving us in no-man's land. In today's world, dependence on high-speed internet is critical to the success and longevity of a business.'

Another business operator reported slow speeds and dropping out and that several technician visits had failed to sort it out. This is from another customer, 'The disparity of service from day-to-day is such that on July 14 2017, download speeds were 21 megabits per second and upload was at 4.8 megabits per second. But on 13 July 2017, download speed was 0.15 megabits per second and upload speed was 0.78 megabits per second. It is ongoingly inconsistent.' Another says, 'The quality of service being paid for is not being delivered. This service is sporadically better but unreliable and it does not allow for increased use.' There are other examples I could refer to and I will in the submission that we will make afterwards, if that is okay.

The question often asked of the NBN network to us at the Cradle Coast Authority is: who now owns the infrastructure and when it needs upgrading, is it the NBN or Telstra? Given the limitations of the ageing copper wire network, the long distances many in our communities are from NBN nodes and the increased usage in traffic of the network, there is a concern that the network will be almost unusable, particularly at peak times. We are hearing anecdotally that this is occurring on satellite, wireless and cable platforms. What is the point of a high-grade cable to the premise when the external infrastructure is poor and impacted by weather and other electronic interference?

Inadequate copper infrastructure is negatively affecting household connections. This is being discovered after some home phone lines have already been disconnected, for example, at the Don near Devonport. NBN is not able to give a time when this will be rectified, and no responsibility is being taken by any party. The focus of the NBN appears to be on the speed of the roll out and not on the quality of the service. Given how long it has taken to get NBN effectively rolled out across the region, and the apparent age of the existing copper cable network and its contingent challenges, the proposition of the current approach will provide better access sooner or more cheaply than the original fibre-to-the-premise approach appears contestable to many. From an economic development perspective, the apparently ad hoc plan to roll out the NBN from the very edges of the region demonstrates a lack of understanding of how the region's economy functions. By not initially providing the highest possible standard of NBN service into the two major industrial, commercial and community service centres of Burnie and Devonport, the opportunity to virtually future-proof the region's economy has been long missed.

The initial policy behind the rollout of the NBN starting in our region—this very region here—and two other centres in Tasmania was to give them and the state a competitive advantage over the rest of the nation. The telecommunications highway was to begin here, and, as an economic and social driver, it was to be an attractor of people, investment, services and businesses. This potential has not been realised, and the current platform and the economic imperatives and policy drivers behind it do not appear to give any confidence that this will occur. For many users and observers in our region, it appears the NBN platform has been designed and implemented with a focus on centralised bureaucratic convenience. To the community, it feels that there has been little consideration given to the impact the approach may have on regional communities trying to improve their economic competitiveness and lift living standards. Market mechanisms alone will not reduce the entrenched inequalities that exist in regions; rather, they could be compounding them. When compared to other public goods and core services, the preoccupation with the commercial business model of the NBN may be at the expense of regional communities.

I would like to finish by quoting from a letter sent to the Cradle Coast Authority from a vegetable grower, processor, distributor and employer of over 300 people in this region. The business is Harvest Moon, from Forth. It reads: 'On August 24, 2016, shareholder ministers of NBN Co Ltd issued a statement of expectations. This was designed to provide guidance to ensure the strategic direction of NBN Co aligns with the government's objectives for delivery of the network. As part of this statement, NBN Co states that their aim is "to foster productivity and provide a platform for innovation in order to develop economic and social benefits for all Australians".' The letter goes on: 'For this aim to be achieved, we at Harvest Moon believe that all businesses, not just those lucky enough to be located on main roads or in cities, must have equal access to this vitally important network.' It concludes: 'In today's world, dependence on high-speed internet is critical to the success and longevity of a business.'

Thank you for the opportunity, Madam Chair and members, to address the joint committee of inquiry on this most important national network.

CHAIR: Thank you. I will start with a couple of questions, then I will go to my colleagues. Mr Sidebottom, you've talked about problems with fixed wireless and satellite, and I understand that the Cradle Coast Authority is this north-west corner of nine regional councils. How much of that area overlaps the west coast of Tasmania, to which the government has committed, I think, about $18 million to deliver fibre to the premises?

Mr Sidebottom : The west coast of Tasmania is part of the Cradle Coast region and is one of our member councils. You've got that occurring in that area, and, as I say, it's part of a network that is making up a variety of technologies for our region.

CHAIR: Where are we up to? That is quite new, so that rollout is ongoing. What I am trying to get a sense of is how much your remarks reflect—because you've actually mentioned ADSL and satellite—a world which, for those connections, is actually moving to something that is better, which is more likely to be fibre to the node.

Mr Smith : These comments all relate to those premises that have been connected and/or have the service available to them.

CHAIR: So the premises that will have fibre to the node under the west coast commitment are just not included in what you are discussing?

Mr Smith : They currently don't receive a broadband service.

CHAIR: Because that connection hasn't happened yet?

Mr Smith : It hasn't been connected. Correct.

CHAIR: There is a massive infrastructure build, and, along the way, service is not ideal and sometimes it's not connected at all. So, if we are talking about connections that haven't happened, it perhaps gives a less optimistic view of the future.

Mr Sidebottom : It does, and the technologies change. I think what people are saying is that, irrespective of the policy decisions and the decisions about technology, they want the best possible system and network available to them and to have it genuinely affordable, accessible and fast. They'll be decisions that governments will make, and you'll have a hybrid of technologies involved. The west coast is looking like it's getting a premium service. The important thing is that there is an equity to the consequences which means it's fast, affordable and accessible.

CHAIR: Do you think, if we wound the clock forward six months and then 12 months, there would be a different picture because more of those connections would have been made and more of those transition issues would have been resolved?

Mr Sidebottom : Again, here, where there is a greater reliance on fibre to the node and then the use of the Telstra technologies, which is copper, then I would say that the probabilities are that you will not get an optimum premium service, because of the state and the nature of the copper network.

Mr Smith : It would appear as though the broadband infrastructure isn't the issue, inasmuch as it's the copper network that it's connecting into, which is very outdated. So you have this concern then as to when that will be replaced. To take that point about looking forward, I think the anticipation and the excitement that this community was feeling about being on par with the mainland and with other, larger cities is being severely eroded. From the experience of those of those who have the service available to them, it's just not meeting what was expected.

CHAIR: Just describe a typical example of those who have the service. You've mentioned fixed wireless. You've mentioned ADSL. Have you got evidence and examples of fibre-to-the-node connections that are—

Mr Sidebottom : Yes.

CHAIR: You also mentioned there was congestion between 3 pm and 8 pm. Yesterday the committee heard evidence from Launtel, which is an internet service provider that is based in Tasmania. The comment was, if you have congestion at some times but not others, the issue is not NBN; the issue is your retail service provider—for example, Telstra. You've mentioned that as a significant problem. Do you recognise that that is therefore a problem of the retail service provider and the service they are then offering via the wholesale network NBN?

Mr Smith : One of the key drivers of NBN was a fast and affordable service, with the emphasis on affordable. As we understand, because of the profit model, or the cost-recovery model, the services being offered by Telstra are being tailored to reflect the ability of the community to pay. Therefore they can't provide a service that will provide that faster service. There is a capacity there to actually pay for a service that meets the expectations of the community.

CHAIR: Are you saying the telcos can't, or they shouldn't, change their business model or their approach?

Mr Smith : What we understand is that the cost of getting more bandwidth is seen to be unprofitable in terms of having a relationship with the community. So what they're offering is a service which has been tailored to the capacity of the community to pay for it.

CHAIR: What information do you have about the capacity of the community to pay versus the plans that are offered?

Mr Smith : We would expect that a service provider provides a service on the basis of what it can charge and what it can make a profit on. We would hope that there wasn't rorting by the providers but that the service they were providing was tailored to the capacity of the community.

CHAIR: What are the cheaper plans that are being offered by the telcos? When I say 'cheaper', I suppose I mean the lower end, with less data, lower speeds. How much are they per month?

Mr Smith : I can't comment on the specific plans themselves, but we understand there are no other plans available. So there are no plans that you can pay a premium for to get that bigger bandwidth.

CHAIR: There should be.

Mr Smith : You would hope there would be. But we still need to recognise, in terms of the service that was offered, and the opportunity that was being provided to a community where increasingly education should be provided via online, that they need to be at a cost that can be afforded by families, and that was, I guess, where the disappointment is.

CHAIR: Do you have any evidence or information about a cost being X, and a family or a consumer saying, 'I can't afford that cost,' and the service being inferior? General statements, while appreciated, are not homing in on what's actually happening.

Mr Smith : Anecdotally, yes. We didn't ask those people for permission to provide details, but there has been a survey done across the region asking families to comment on the terms of the service that they are being provided with, which we expect is a service that they can afford, and it hasn't met their expectations.

CHAIR: Are you able to provide that survey to the committee?

Mr Smith : We would need to ask permission from those people that commented on it.

CHAIR: We don't need individual names; just the numbers and the results.

Senator URQUHART: Thank you both for your attendance today. Mr Sidebottom, you said in your opening statement that the original rollout was met with excitement. Can you just elaborate a little bit more on what the excitement was and what the rollout was.

Mr Sidebottom : I think the general approach to it was that it would be fibre to the premise and that, in effect, it was viewed as a national network, almost like a national highway, and fibre to the premise would be the best way to deliver it. It would be affordable, it would be fast and it would be highly accessible. As it began to roll out and as we got different models because of different government policy, the platform itself changed. The technologies changed. The ability to make it highly affordable, highly accessible and fast diminished with it. So there was that expectation that business, families, education, training facilities and also service providers would have access to this national broadband highway and it would be the best technology that would be available to deliver it. That was the expectation. It seems that people are underwhelmed by the service that has been provided at present and the models that underpin it.

Senator URQUHART: That is certainly the feedback that I'm getting from the community as well. In terms of the coverage of Cradle Coast, I know that certainly Smithton and Somerset are the two areas that have FTTP now. As you have just said, the Cradle Coast region—apart from a couple of regions that were designated for wireless, which was Strahan, and some other areas further regional that were for satellite—was predominantly FTTP. Interestingly enough, we heard evidence yesterday of the comparison of this infrastructure to a national highway or a shipping lane or whatever. We heard that that is how it should actually be viewed and that we should be rolling out this enormous amount of infrastructure on that basis. But, obviously, that is not what is happening with the change and the change in policy. I was wondering if you could go to a description of the digital literacy of communities within this region and what measures the Cradle Coast Authority is making in collaboration with your partners in relation to that.

Mr Smith : In general terms, education is not necessarily a primary focus for the authority; it is about economic development. We do understand that with digital literacy—and the comment was made earlier this week by the Tas Communications chief—there is an issue with digital literacy. But it is a chicken-and-egg argument, isn't it? If at 3 o'clock when kids get home and want to try and get onto the internet and are unable to, I'm sure that digital literacy will fall behind. So we need to have that service available to them in order to develop that digital literacy. So, again, by the service that has been provided, we will continue to fall behind. I can't see how that will change unless we have the service available to the community and to families.

Senator URQUHART: With the example of Harvest Moon—which I know very well out at Forth—you talked about the issues with them and the statement of expectations that they were expecting. Can you just paint the painter about where they send their product to—those sorts of things? I know what Harvest Moon is but I'm sure there are lots of people who may be listening who aren't aware of that.

Mr Sidebottom : It's a very large employer both directly and, certainly, indirectly as well. They have national and international markets. They are also bordered by several competitors—thankfully, they all work collaboratively—who have greater access to the internet and the ability to use the internet for their business model. So that is what is holding them back. Whether it is the actual telcos themselves and NBN, the issue is they don't have access to the highest broadband speeds and, certainly, capacity. As a result, they believe that their business model going forward is diminished. And, as a major employer, it's very important that they continue to sustain their business and grow that business, as it is for the Cradle Coast region itself.

Senator URQUHART: Absolutely. I just want to raise an issue about which there's a lot of correspondence in The Advocate, which is the regional daily for the North West coast. The letters to the editor section—or web words, as it's called—is full of NBN stuff this morning. I'm not sure whether you've read it or not. Over the course of these hearings—not just in Tasmania but all over the country—we've had people raise issues about the blame game between NBN and the RSPs, the retail service providers. One of these letters says: 'We're still on ADSL because Telstra and NBN can't get their act together. Three times we've waited for a technician to arrive. Three times they have not turned up. Telstra blame NBN and NBN blame Telstra. Can't win. By the sound of it I'm pleased we've been left out and are still on ADSL.' Is that a theme that you're hearing across the people that you represent in this community?

Mr Smith : I will give you a classic example. It took three months for a very prominent figure in our community, the vice-chancellor of the university, to have her service connected. Now, you would hope that it would be sorted for someone of that stature. That is not to say they should be given special services.

CHAIR: No; definitely not.

Mr Smith : But, at the same time, in terms of their capacity to support our community, that is frustrating. And we're hearing that message time and time again—as you say, technicians not turning up, or turning up and then not being able to fix a solution. For me, it took three months to get my service moved from one room to the next.

Senator URQUHART: That seems to be a common theme. In terms of economic development and the things that Cradle Coast looks at, I think you are very well aware of the fight that the West Coast put up—and the West Coast mayor will be tuning in later via phone. The West Coast was slated for fibre to the premises, as was everyone in Tasmania, basically, apart from those few examples that I've talked about that were going to be on wireless and satellite. Then, all of a sudden—I don't know what happened—they completely were slated for satellite in a community that has over 4,000 residents. That is crazy. You've got to ask yourself who would make a decision like that—to roll out an entire community on satellite where there are lots of different issues with weather latency and a whole range of issues that would create problems. That had to be reviewed. But, in terms of the economic development of that community, they fought hard and they embarrassed the current government into at least accepting fibre to the node, which is not a premium service by any means—not considering what they were offered—particularly if you look at the West Coast. The state of the copper down there is probably worse than in a lot of other places around the country particularly because of the weather and the conditions down there.

But if we talk about economic development we're talking about a region that, because of the mining regions down there, provides an enormous input into the community. We also looked at what other opportunities there might be for economic development. That's one of the key things that I know the West Coast is particularly looking at. They've been fighting hard to try to make sure that they get a good service so that they can have a variety of economic drivers in their community and are not totally reliant on the mining industry. If we also pick up places like Burnie, which has lost very large manufacturing plants like Caterpillar, which packed up and went to Thailand a couple of years ago, and the paper mill some years ago, it has changed focus and is now effectively looking at becoming maybe a university-type town and at other developments. If we compare it, how do you see what we're getting now to, say, Launceston and Hobart, which are large cities? But so is this region How do you see the current provisions adapting so we can grow into the future?

Mr Sidebottom : We mentioned earlier in our submission that what we look for is at least a competitive opportunity. Whatever mixture of technologies is adopted, it's important that the policy behind this says that you can provide competitive opportunity to the regions. We're not experts on the technologies and the platforms that are available, but it has to be the best because this is the investment not only in regional and rural Australia but also in Australia itself.

This region has a number of important natural competitive advantages, and we need to be able to explore and exploit that capacity. The NBN and the platforms that are associated with it are absolutely crucial to us, and it's an investment in the best. That's what we expected, and that's what we expect in the future. Political parties can argue about it over policy, their business models and whatever else, but the people expect the best. We're falling behind internationally in terms of capacity, usage and so forth, so it's very important that the policies that are determined give us the best opportunities. We don't believe that they are doing that at present.

Senator URQUHART: I think we're about 51 in the world now. That's where we've fallen to.

Mr Sidebottom : We see the figures going up and down.

Senator URQUHART: It's around that.

Mr Sidebottom : Again, the people of Australia—we're no different—want the best system possible. We leave it to our governments and future governments to make the best decisions so that we can actually access the most affordable, most accessible and fastest broadband speeds possible so we can do business, live a lifestyle and raise our families in rural and regional Australia.

Senator URQUHART: One of the things we've heard about not only throughout this committee but also generally in the media, when talked about by the minister, is the rollout speed. You mentioned that the rollout speed is being given priority over the service. We've heard about how many premises that's been rolled out to. We haven't heard about the service 0 premises, which are the ones that are put into the too-hard basket. We don't hear much about them. People don't actually know that they're in a service class 0 area. They just think that the NBN hasn't come to them yet. They can't seem to get an answer about when they're going to get hooked up. There are thousands of premises, and that's growing every day. From my point of view, the frustration is that we should be providing a good service. If it takes a little bit longer, does that really matter? Is that the sort of position that you would take when looking at an economic driver and an economic development within this region? Would it be better to be a little bit more frustrated for a bit longer and have to wait but get a premium service at the end?

Mr Smith : I think, especially when we've had comments made by technicians, that it's the copper network that will need to be replaced in the very near future in order to get anywhere near the service being provided. Therefore, we will be behind the eight ball until such time as that would be replaced. You think it would make sense to replace it at the same time, rather than coming back later and having to re-dig up the network. Can I also make a comment on the economic cost to our community. Increasingly, we hear about the pressures on the cities and the costs associated with that—with having to respond to more people living there. The regions are a place where we can accommodate more people, but they need to be attractive places to live. The problem we have at the moment with the type of service that we have is: it's not necessarily an attractive proposition for people to move families here. We already have some of the disadvantages around connectivity and education, but, with something like an NBN service or a properly operating service, regions then become—this region particularly—a much more attractive proposition for families and then, also, for businesses to move to.

Senator URQUHART: I don't want to put words in your mouth, but is it then fair to say that we should be demanding the same services as what some of the larger population centres have? For example, what they have in Launceston and Hobart—those regions. If we can't at least convince government to do that, would it be a reasonable observation to say, 'At least put it in our CBDs—where the function of business and of community is and where the economic stuff drives out of—small businesses and town centres.' Would that be a somewhat compromise from your point of view or do you think we should say, 'No, we want it out everywhere.'

Mr Sidebottom : In terms of equity, you want it out everywhere. We did make the comment that, when it was rolled out originally, we probably believed that the best test case would've been that it be rolled out in the important CBD economic areas of the coast and in Tasmania. That wasn't the case. It's almost self-contradictory here, but we were remiss at that stage. The important thing is that we provide the platform so that we can have the most affordable, most accessible and fastest broadband possible. We would go about that, we would hope, in a bipartisan way that's for the benefit of the whole nation, and rural and regional Australia in particular. The wherewithal and wherefores of all this we leave in the hands of politicians, but we do ask as a community that we get the very best possible system, which has been promised by both parties, into the future. That's what people want.

Senator URQUHART: I have one final question. I talked about Somerset and Smithton earlier; they have fibre to the premise. I don't want this to be all doom and gloom, obviously. I'm interested in whether or not you've heard any positive stories coming out of Smithton or Somerset in relation to the application of FTTP.

Mr Smith : Unfortunately, it's the negative stories that are the overwhelming noise that we're hearing, which is a real shame, I think, from the public infrastructure perspective. What should be a story about nation building is actually being dragged down because of the ones that are getting the poor services.

Senator URQUHART: I'm sure there are fantastic stories coming out. I know of one coming out of Somerset. I'm sure there are good ones, and it's a shame that the noise of those gets overtaken by the bad news. Thank you.

Mr BRIAN MITCHELL: Thank you, gentlemen, for your evidence. Senator Urquhart made reference to the West Coast being quite wet, and I wouldn't mind getting your insight into what concerns you have for the pending rollout of FTTN on the West Coast. We heard anecdotal evidence yesterday that a property in a business district in Legana was pretty much out of action for at least six days because water got into a node box. What concerns do you have about the FTTN being fit for purpose on the West Coast?

Mr Sidebottom : Again, we're not technicians, but the concern is—

Mr BRIAN MITCHELL: But you'd agree it gets wet on the Wet Coast?

Mr Sidebottom : Ha, ha, ha, ha! No! It's often very sunny! I think the point is that, whatever technologies are employed, if it replicates what's happening here on the greater part of the coast then we have concerns if it's using the Telstra infrastructure that may already exist, because the copper network appears to be highly diminished in this area. That's a Telstra-NBN thing. I understand that. It's not necessarily NBN as such. But that's the agreement that's been reached, and we would expect that, if the copper network is not up to par, they don't continue until they fix it. Otherwise we're going to end up with this diminished service, which we seem to be getting more and more evidence of at present.

Mr BRIAN MITCHELL: You made an oblique reference, when the chair was asking a couple of questions, to examples that you have of people or clients on the FTTN already. You said you might be able to share a couple of examples of how they are going with their existing FTTN service. Are you able to perhaps illuminate the committee with any of those?

Mr Sidebottom : Again, we go on anecdotal evidence. The general conclusion, essentially, is that it's not much better than ADSL2. What people need it for is another issue. Some need greater capacity and greater speeds and so forth. Generally speaking, it is that people are underwhelmed by it. That's my take.

Mr BRIAN MITCHELL: Thank you. I have another question, but it may have been answered to some degree: what limitation on growth of the Cradle Coast region do you fear the current rollout is going to have? You've made it clear you'd prefer to see FTTP—as, frankly, would I—but, for the people that you represent, what limitations on growth and the potential for this region does the current rollout have?

Mr Sidebottom : In general, again, I just think that the general approach is that it's underwhelming. There was an example recently of a highly important specialised medical service that was established and funded here in the Cradle Coast region which was threatening to pull out because it did not and could not access the speeds that were necessary for that medical service to carry on its telecommunications system.

Mr BRIAN MITCHELL: Do you have any idea how many employees they would have?

Senator URQUHART: They are actually appearing later.

Mr Sidebottom : It wasn't so much the employees, it was all the people it needed to service. If it had not been made available, people would have had to go to Launceston and/or Hobart and/or Melbourne. That is an example where the NBN system and arrangements made couldn't benefit. There were arrangements made thereafter but I would have thought on a systematic rollout that you would have taken all that into account, particularly when you were near major hospitals.

Mr BRIAN MITCHELL: Mr Smith made the point that the current rollout may be hurting the chance for the regions to encourage people to come. At the moment, the NBN is directed to make a profit, hence some of the CVC pricing we have seen, which then impacts customers. To what extent should the rollout be seen as part of a wider strategic economic agenda—for example, for things like strategic population planning, if the NBN were brought into account for that?

Mr Smith : It was only recently that the Deputy Prime Minister talked about people moving from the cities: 'Stop complaining about the cost of homes. Move to the regions and the prosperity and opportunity there.' Well, people are not going to move to communities where the infrastructure doesn't meet the standards they expect. That is what is holding us back.

Mr BRIAN MITCHELL: What economic potential are the regions and nation missing out on because of what seems to be a very narrow focus on the NBN being directed to make a profit? What is the wider economic cost?

Mr Smith : People aren't investing. While we have great advantages, in terms of cost of living and access to infrastructure, such as highways and ports, the lack of the NBN is preventing businesses from moving here.

CHAIR: Thank you very much for your evidence today.