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Senate inquiry into Labor's broadband fiasco.



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Wed, 25th June 2008

SENATE INQUIRY INTO LABOR'S BROADBAND FIASCO

The Hon Bruce Billson MP Shadow Minister for Broadband, Communications and the Digital Economy

A Senate Select Committee has been established to thoroughly examine Labor's National Broadband Network (NBN) proposal amid a backdrop of broken deadline promises, cost blow-outs, consumer anxiety and regulatory uncertainty.

This inquiry is critical to ensuring that a complex project of this scale, with significant long-term implications for all Australian telecommunications, broadband users and our national economy, fully optimises the national and consumer benefits for the taxpayer funding involved.

Openly canvassing the competing interests and evidence-based options for action will ensure that the right public policy settings are identified and understood by broadband service providers and users.

The Government's NBN process represents an enormous and far-reaching intervention into a private sector industry and therefore needs to be considered in an open, transparent, objective and collaborative way.

The inquiry will examine the Government's vague proposal to partner with the private sector to upgrade sections of the existing fibre broadband network to provide minimum speeds of 12 megabits per second to 98 per cent of the population.

The committee will also examine the implications of the proposed NBN for consumers, in terms of service availability, choice and costs.

The potential impacts on competition in the telecommunications sector and existing broadband services, as well as likely consequences for national productivity, investment, economic growth, inflation, cost of living and social capital, will also be investigated.

The committee will seek the input of the telecommunications industry - including those excessively gagged under the Government's tender process - as well as industry analysts, consumer advocates, broadband users and service providers.

This committee will carry out the type of necessary work and analysis that the Rudd Labor Government appears incapable of doing to turn its election sound bites on broadband into thoughtful and sound public policy.

This work comes at a time when key industry figures are seriously challenging the Government's project costings. Labor has consistently said that rolling out fibre to reach 98 per cent of the population will cost in the order of $8-10 billion.

Industry figures, including Telstra and Pipe Networks estimate that to construct a fibre broadband network to reach 98 per cent of the population, as promised by Labor, would cost in the order of $15-25 billion.

The Rudd Labor Government has repeatedly stated that it will contribute up to $4.7 billion towards the network. If Labor has grossly under-costed its promise, will it look

to an even more substantial taxpayer contribution considering the Prime Minister Kevin Rudd's stated aim of a ''50 per cent public equity'' model?

Media analysts have said Labor's election broadband pledge is already ''in tatters''. Senator Stephen Conroy will have dismally failed in his ambition ''to complete the [tender] process by the end of June'' (media release 7/12/07).

And as recently as February Senator Conroy said ''construction will commence before the end of the year'' (The Age 2/3/08). There are now reports that bidders have been told proposals will not be due until November, with a tender not likely to be awarded until mid 2009.

Mr Rudd is clearly frustrated by the inability of Senator Conroy to deliver on Labor's biggest infrastructure election promise and it would come as no surprise if he is moved aside because of this mishandling.

The Select Committee will report back to the Parliament in March 2009.