“NBN Co was not fit for purpose,” according to the Coalition government’s latest report on the National Broadband Network.
The report (PDF), which was requested by Communications Minister Malcolm Turnbull and written by former Telstra official Bill Scales, explores the public policy process that resulted in Labor’s fibre-to-the-premises (FTTP) version of the NBN.
The audit covers the period from April 2008 when the government sought proposals for the NBN to May 2010 when the implementation study was released.
NBN Co “was a start-up company given a job that only a well-functioning, large, and established telecommunications company would have been able to undertake in the allotted time frame,” wrote Scales, who previously worked for Telstra as group managing director for regulatory and corporate affairs.
The Scales report breaks down the Rudd Labor government’s policy process into two marks. Mark I is based on the policy in the 2007 general election and implemented in April 2008, while Mark II was the new policy announced in April 2009.
Scales said there was an appropriate public policy process behind Mark I, but criticised it all the same.
“Even a well conducted process could not disguise or overcome lack of information about, for example, the proposed regulatory framework, the relative importance of the Government’s objectives and evaluation criteria, and how best to define and measure the requirement that the NBN should cover 98 per cent of Australian homes and businesses.”
In addition, Scales wrote that the Australian Competition and Consumer Commission “overstepped its authority” when it advised that fibre to the node (FTTN) could not be “a stepping stone” to FTTP. No one tested the validity of the ACCC’s advice, he added.
Scales had no kind words at all for the Mark II process.
“By contrast with NBN Mark I, the public policy process for developing NBN Mark II was rushed, chaotic and inadequate, with only perfunctory consideration by the Cabinet.”
He slammed the government for spending only 11 weeks to establish the entity that became NBN Co.
“There is no evidence that a full range of options was seriously considered. There was no business case or any cost benefit analysis, or independent studies of the policy undertaken, with no clear operating instructions provided to this completely new Government Business Enterprise, within a legislative and regulatory framework still undefined, and without any consultation with the wider community.”
The Scales report follows the first report by Michael Vertigan, who has been tasked with conducting a cost-benefit analysis of the NBN.
Mark Gregory, a senior lecturer at RMIT, said "the Scales report does little to add to the NBN debate other than make a shallow politically motivated attempt to paint a negative picture of the organisations and individuals involved with the NBN Mark II."
"Scales positively argues for major projects to be publicly analysed prior to commencement but has focused on cost-benefit analysis, which does not adequately include technical requirements and performance outcomes," said Gregory.
"A life cycle cost and performance analysis should be carried out in concert with cost-benefit analysis, but a life cycle cost and performance analysis is not likely to support the government's short term NBN Mark III vision."
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