Senate seeks greater transparency for NBN finances, rollout forecasts

Senate moves to force release of National Broadband Network data

The Senate has amended and passed a government bill adding provisions that will, if the bill becomes law, compel NBN to make public a range of financial and rollout data.

The amendment says that NBN’s board must publicly release a report covering the period 1 July 2015 to 30 June 2022 that includes annual forecast and actual number of premises ready for service and activated for each access technology employed by the network, total revenue, total operating expenditure, government funding, debt funding and a range of other financial data.

The amendment to the, Communications Legislation Amendment (Deregulation and Other Measures) Bill 2015 (which didn't directly concern the National Broadband Network) was moved by Labor Senator Stephen Conroy.

The Coalition government “has put the Kremlin to shame” when it comes to releasing rollout-related information, Conroy said.

“This is a government that treats the Senate with contempt,” the senator said.

Conroy slammed the testimony of NBN executives at the recent round of Senate Estimates, citing the number of questions taken on notice and the use of ‘commercial in confidence’ as a justification for declining to answer some queries.

“This farce has now reached the level where [communications minister Mitch Fifield] is now complicit from hiding from the Australian public every single piece of key information on the National Broadband Network,” Conroy said.

“There is no other Government Business Enterprise in this country that gets away with refusing to reveal information like what is the value of a contract you have entered into with another company,” the senator said.

“They are afraid that the truth of the debacle that is unfolding behind the scenes will come to light. The fact that the HFC network is way behind schedule and they have no idea how they are going to meet their promised targets. So they hide the truth. They won’t come and discuss it with the parliament of Australia, with the people of Australia.”

The amendment was backed by the Australian Greens.

“This is some unfinished business and some unfinished housekeeping that we shouldn’t be needing to be deal with today,” Greens Senator Scott Ludlam said.

“Why is this information not already in the public domain?” the Greens senator asked.

“Why do these forecasts have to be extracted by the Senate in this fashion? Why does this material not already exist?

“Senator Conroy and I and those who have been participating in this debate since 2008 and onwards, we had plenty of run-ins about the strategy, the performance of NBN Co, some of the technology choices, some of the market choices. But the debates where always carried out against the backdrop of information that was being handed over by [former NBN CEO Mike Quigley] and his team.

“And what it meant was we were able to compare the forecasts that were being generated by the government or by NBN Co when it only had a handful of staff against the actuals.

“When the volume rollout finally began and we finally got a sense of who was taking up the technology, what speed tiers they were taking up, how the network was performing, how long it was taking to roll out, what it was costing per premise — we were able to go back and we were able to say ‘these forecasts were wrong and these ones were reasonably accurate’. But at least we were acting on the basis of publicly accessible information.”

Ludlam noted that the Greens and the Coalition had during the previous Labor government worked to make then communications minister Conroy release NBN information.

Read more: NBN completes HFC pilot

“By the time the volume rollout started, everybody, whether you supported the model of the project or not, [you] could base your arguments on the performance of the network on data and on information.”

Ludlam also took aim at the government-backed ‘multi-technology mix’ blueprint for the National Broadband Network.

“Australians are getting a telecommunications network that will be slower, more expensive and delivered later than an all-fibre build. What act of genius put this together [and] dismantled something that was going to work?” Ludlam said.

The amendment was opposed by the government.

“The essence ... of the amendment moved by Senator Conroy is that there isn’t adequate transparency in relation to the NBN and that by implication there was great transparency under Labor, that sunlight reached where it did,” Fifield said.

Under Conroy’s tenure as communications minister, transparency was “an illusion,” the Coalition senator said.

“Sure there were plenty of pins on rollout maps and there were lots of pretty maps on websites with really nice colours. The only problem was they bore absolutely no resemblance to reality.”

Under the Labor government there was a culture at NBN of telling the government what the government wanted to hear, Fifield said.

There is currently an “unprecedented” amount of information about the rollout available today, the senator said, including weekly rollout reports, quarterly financial updates and a rollout plan that extends out to 2018.

The amendment was completely unrelated to the bill and a “legislative stunt”, Fifield said.

“What technology based company would propose forecasts that go out to that period of time [2022],” the minister said. Another concern was that the amendment could be to the “commercial disadvantage of NBN”.

The amendment was passed 33 votes to 28.The bill will now be returned to the House of Represenatives.

Full text of the amendment:

Schedule 1A — NBN Co Reporting
National Broadband Network Companies Act 2011
1 After section 98A
98AA Financial and deployment forecasts report
(1) The Board must prepare a report setting out NBN Co’s financial and deployment forecasts for the period beginning on 1 July 2015 and ending on 30 June 2022.
(2) The report must include:
(a) forecasts for each financial year during the period of the following:
(i) number of premises ready for service for each access technology;
(ii) number of premises activated for each access technology;
(iii) total revenue;
(iv) total operating expenditure;
(v) earnings before interest, taxes, depreciation and amortisation;
(vi) earnings before interest, taxes, depreciation and amortisation margin;
(vii) operating profit before deduction of interest and income taxes;
(viii) net cash interest (funding costs);
(ix) earnings before taxes;
(x) total capital expenditure;
(xi) movement in working capital;
(xii) cash tax;
(xiii) levered free cash flow;
(xiv) government funding;
(xv) debt funding;
(xvi) total funding; and
(b) totals for the whole of the period for each forecast mentioned in paragraph (a).
(3) The Board must, within 60 days of the day on which this item commences:
(a) give the Minister the report; and
(b) publish the report on NBN Co’s website.
(4) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 5 sitting days of receiving it.

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