Senate committee decides: Scrap the NBN

71-page report could be used by Opposition to fight NBN, Greens say

A Liberal-dominated Senate select committee on the National Broadband Network (NBN) has echoed existing calls from the Opposition to scrap the Federal Government's $43 billion project in its final report.

At any one time, the committee consisted of four Coalition senators, as well as Greens senator, Scott Ludlam, and Labor senators, Kate Lundy and Glenn Sterle.

At 71 pages, the committee's final report is significantly shorter than the four interim reports that preceded it, does not present any new information or arguments, and largely reinforces the main recommendation of its fourth interim report that the government "abandon its NBN proposal in its current form".

However, the final report also focuses on recommendations stated by economists Henry Ergas and Mark Harrison that the government release the underlying assumptions behind the NBN Implementation Study.

Additionally it recommends the government conduct a cost-benefit analysis of the NBN which, according to the economists, would take just three days.

Greens senator, Scott Ludlam, told Computerworld Australia that he was supportive of both recommendations regarding the financial assumptions, but said a cost-benefit analysis would be highly speculative.

"I think if it's as easy to do as Professor Henry Ergas says, then they should go ahead and do it, but I don't think it will tell us as much as the Opposition thinks it will," Ludlam said. "You have to include a lot of assumptions and a lot of guesses and you have to make up a lot."

At the committee's last hearing, Ergas told senators that a cost-benefit analysis could be done in the short time-frame by using the detailed cost modelling performed by the authors of the implementation study. However, that modelling and the underlying assumptions had not been made public by the authors or the Federal Government, which left some of the report's recommendations and a proper analysis of the project's costs up in the air.

Additional comments in the final report from Labor senators present at the hearing rejected claims that the Federal Government had not been transparent in the Implementation Study and underlying assumptions.

While a hearing held between the Senate select committee and the authors of the NBN Implementation Study was kept private, the final report reveals that the study's lead advisor, Daryl Quinlivan, was advised not to undertake a cost-benefit analysis as part of the report.

"Undertaking a cost-benefit analysis would have enabled the public to properly assess for themselves whether the government's NBN project represents value for their money and is the best policy for delivering adequate and affordable broadband services to Australian premises," the committee's final report reads.

Ludlam warned that a cost-benefit analysis and the final report could be used by the Opposition to fight the NBN at the forthcoming federal election.

"It shouldn't be treated as gospel, and it shouldn't be used as a weapon and that's how the Opposition intend to use it," Ludlam said.

"They decided months ago, well before the Implementation Study was released, that they were going to oppose it," Ludlam added about the Opposition's stance.

Opposition leader, Tony Abbott, and shadow communications minister, Tony Smith, have publicly announced they would scrap the NBN if the Coalition gained power, but are yet to offer an alternative broadband plan.

Computerworld Australia contacted Tony Smith's office for comment, but did not receive a response at time of writing.

"The Rudd Government is getting on with delivering affordable, high speed broadband to all Australians," a spokesperson for the communications minister, Stephen Conroy, told Computerworld Australia in an email. "The Opposition has had three shadow communications ministers and still no alternative broadband plan for Australia’s future."

The committee's final report came two years after the it was first created, with submissions from 141 stakeholders, 18 public hearings with those stakeholders and a total of four interim reports. The committee grilled telcos, analysts, the communications department, NBN Co and, in a private hearing, the authors of the NBN Implementation Study.

“Every Australian would support the idea of better, faster, more reliable broadband service, but the Rudd Government’s NBN plan is a huge financial risk to tax payers and a risk to competition,” committee chairman, Liberal Senator Ian McDonald, said in a statement. Despite the delayed release of the committee's final report, the possibility of passing NBN legislation through Parliament is unlikely before the next federal election, largely as a result of blocks by the Opposition.

"They've blocked and opposed anything and haven't put anything up as an alternative," Ludlam said. "Even to the point they fully intend to block the Telstra bill.

"It costs more than a million dollars a day to run [Australian Parliament House] and they are filibustering the bill."

A spokesperson for Australian Parliament House clarified that it cost $150-175 million per year to run Parliament, excluding MP salaries, or about $500,000 per day.

The Telecommunications Legislation Amendment Bill, which would see the structural or functional separation of Telstra, may nevertheless be pushed through following another delay in May. It currently sits as a fifth priority on the Senate papers, and could possibly be tabled before the Senate adjourns on 24 June.