Chapter 1 Introduction
The Joint Committee on the National Broadband Network
(the committee) was established by a resolution of appointment in March 2011
and appointed to inquire into and report every six months on the rollout of the
National Broadband Network (NBN) and the Government’s
objectives for the NBN Co Limited (NBN Co) in the design, build and operation
of the NBN.
In its First Report, the committee included comment on the following
issues which arose during the course of its initial review:
n The delay in receipt
of the Shareholder Ministers’ NBN rollout performance
report, including a brief discussion about the development of Key Performance
Indicators (KPIs) and measures and reporting intervals and the impact on the
committee’s reporting timeframe.
n The impediments which
may be caused to the committee’s future reviews because of delays in receiving
answers to questions on notice from the Department of Broadband, Communications
and the Digital Economy (DBCDE) and the NBN Co, and withholding information
from the committee on commercial-in-confidence grounds.
n Competition issues
associated with the uniform wholesale national pricing approach, Access Virtual
Circuit pricing and the impact of the Australian Competition and Consumer Commission
(ACCC) decision to increase the Points of Interconnect from 14 to 121.
n Timing of the
completion of the NBN Co’s Binding Definitive Agreements with Telstra Pty Ltd and
Singtel Optus Pty Ltd, including their review by the ACCC.
n Timing and broader competition
impact of Telstra’s Structural Separation Undertaking (SSU).
n Timing for
development of the NBN Co’s Special Access Undertaking (SAU) and Wholesale
Broadband Agreement (WBA).
n Regional and remote
access to broadband to assist in the delivery of education and health services
and support economic development.
As the committee was required to report to the Parliament by
31 August 2011 and did not receive information relevant to its review
within the review period, it has agreed to present a second report to the
Parliament and the NBN Shareholder Ministers before the end of 2011. The
committee’s second report includes additional information on matters reported
on in the first review period, and also introduces a number of new issues which
arose during the second review period.
Pursuant to its Resolution of Appointment (RoA), the committee is to
report to the Parliament and the NBN Shareholder Ministers every six months ‘until
the NBN is complete and operational’. The committee met its first reporting date,
and presented its report to the Parliament on 31 August 2011.
In its First Report, the committee stated that it would present its
second report on the NBN rollout by the end of 2011 and, as a result, proposed
to adjust its reporting timetable from August/February (as provided for in its RoA)
On 18 August 2011, the committee wrote to Shareholder Ministers to
propose amendment to its reporting dates (as outlined above) to enable it to
include information received from the NBN Rollout Performance report, which was
expected to be received by mid September 2011.
Subsequently, on 23 September 2011, in addition to providing the
committee with the Government’s first NBN performance report, the Shareholder
Ministers concurred with the changed reporting timetable as proposed by the
committee from August/February to June/December.
Objectives and Scope of the Review
In this second review period, the committee has aimed to present the
issues it identified in the Government’s NBN rollout performance report in a
timeframe that enables the Government to respond to early in the next reporting
period. Further, the extended timeframe could enable the Government to develop
its performance report in areas where the committee has asked for additional
material or clarification.
The committee also aimed to receive information to allow it to provide
an update on matters in the First Report which relate to:
n the NBN rollout in
regional and remote areas, covering technology type and access to broadband
challenges and benefits, and
n further discussion on
competition concerns continuing to be raised by smaller internet service
providers which are premised on gaining affordable access to and pricing of the
Further, the review includes information about the process undertaken
thus far in finalising the Binding Definitive Agreements between the NBN Co and
Telstra and the NBN Co and Optus, ACCC consideration of Telstra’s SSU and
Customer Migration Plan, issues arising from the development and ACCC
consideration of the NBN Co’s SAU and WBA, and earlier than planned private
sector engagement in funding the NBN.
Finally, the committee endeavoured to include information from Telstra
following its shareholder approval of the Binding Definitive Agreement between the
NBN Co and Telstra in the lead up to ACCC consideration of the Telstra SSU and
Customer Migration Plan.
The committee’s findings and conclusions reached on these matters are
limited to information it received from a number of telecommunications
companies, the NBN Co and the DBCDE. While the committee provided Telstra with
an opportunity to present information to the committee at a public hearing, Telstra
declined to appear.
Areas of Possible Future Review
Since its First Report in August 2011, and taking into consideration the
matters reviewed in this report, the committee has identified various areas
which may be the subject of future review. In addition to the committee’s
ongoing review of the NBN’s rollout performance, further areas of review are
likely to include:
n The impact of the NBN
rollout on competition policy and the ongoing regulatory review of NBN-related
matters by the ACCC
n Telstra’s SSU and Migration
n The NBN Co’s procurement
policy and tender processes
n Regional and remote
access to broadband services and the quality of fixed wireless and satellite
n Impact on competition
for retail service providers
n Government readiness
to use and deliver services via the NBN.
n Regulatory issues
participation and training
n Network security and
n Private sector investment
in the NBN.
Further, as outlined in the Prime Minister’s letter to Senator Xenophon
on 23 November 2010, the committee may also ‘draw on any relevant material from
the [House of Representatives] Standing Committee on Infrastructure and
Communications’ report presented in August 2011, entitled Broadening the
Debate: Inquiry into the role and potential of the National Broadband Network.
Conduct of the Review
On 21 September 2011, a media release invited submissions to the
committee’s ongoing six-monthly review of the rollout of the NBN. The review
was also advertised and submissions called for in the Australian Financial
Review on 24 September 2011 and The Australian on 28 September
2011. The invitation to receive submissions closed on 20 October 2011.
The 38 submissions and 11 exhibits received in relation to the review are
listed at Appendix A.
In addition, the committee held four public hearings on
20 September 2011, 13, 24 and 25 October 2011, each of which were
publicised by media releases.
Witnesses who gave evidence at these public hearings are listed at
Appendix B. Transcripts of the public hearings are available at www.aph.gov.au/jcnbn.
Chapter 2 provides an overview of the progress of the NBN rollout in
comparison to the NBN Co’s targets. The content, format and timeframe for
receiving the Shareholder Ministers’ first NBN rollout Performance Report to
the committee, as well as the type of information that could be provided by
Shareholder Ministers in their future reports is also discussed.
Chapter 3 outlines the main issues associated with: the NBN Co’s agreements
with Telstra and Optus, development of the NBN Co’s SAU and WBA, Universal
Service Obligations, affordability, private equity engagement in funding the
NBN, pricing for RSPs and competition issues raised by small RSPs.
Chapter 4 continues discussion on issues raised in the First Report on
the benefits and challenges of gaining access to the NBN in regional and remote
areas, and Government readiness for receiving the NBN. In addition, social,
economic and geographic factors impacting on access to the NBN is discussed.