House of Representatives Committees

| Joint Standing Committee on the National Broadband Network

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Preliminary Pages

Chair’s Foreword

This Second Report of the 57-member strong oversight committee of the National Broadband Network (NBN) is the first report that examines detailed performance measures provided by the NBN Co and Government, and allows for a direct comparison of the foundation documents of the NBN Co Corporate Plan 2011-2013 with the Shareholder Ministers’ letter to NBN Co dated 17 December 2010.

While there are several differences between these foundation documents and the recently provided performance update, it is evident that 2012 will see NBN Co transition from a company working through the frustrating and tangled regulatory stages, and the testing of first release sites, to provide the NBN rollout a broader engagement with retail providers and communities.

Compared to the NBN Co Corporate Plan, a lower than expected capital expenditure (capex) and higher than expected operating expenditure (opex) result, will be watched closely by the committee. This could be an early warning that it is costing more to do less, when compared to the expected results in the NBN Co Corporate Plan, even though the committee has at this stage accepted the argument from NBN Co that other reasons are behind this. The committee will watch this capex/opex combination closely, as value for money to taxpayers is the critical key performance indicator in turning this good concept into an even better reality for all.

Compared to the NBN Co Corporate Plan, timeframe slippage has also occurred, largely due to the number of unresolved issues between the Australian Competition and Consumer Commission (ACCC) and various stakeholders. The competition and consumer “rules of the game” remain unresolved at the time of writing. Certainty for markets, investors and consumers demands greater attention from Government to resolve outstanding regulatory matters, so there are no further schedule slippages.

It is understood by most that Australian telecommunications is currently not a level playing field. It is also understood this historic imbalance means decisions are being made on the front-end of this infrastructure project to eventually achieve a more competitive environment and better consumer result for the future, even if decisions may look anti-competitive in the short term. It is also understood and acknowledged that this is initially challenging-challenging for regulators like the ACCC, challenging for some existing business models like those wanting to both wholesale and retail in Greenfield sites, and challenging for those looking for investment opportunities in the new markets that are coming with the NBN rollout. Even with this all being understood, however, it should also be understood by the relevant stakeholders involved in these regulatory decisions that challenging does not equate to delay, and should not be an excuse for delay.

If these matters can be addressed quickly and thoroughly, 2012 has great potential to be the Year of the NBN. The move from test sites to broader rollout will engage more people, and will see more retail engagement, and more innovative strategies and products introduced into Australia as a consequence. Regional and rural Australia will now, finally, have the opportunity through the next steps of interim satellite, wireless and FTTP to be better engaged in the Australian economy and services. And to add to this, the committee has made recommendations for better low socioeconomic engagement, and better remote indigenous engagement, so that these opportunities actually turn into real, ongoing and sustainable change for the better in regional, rural and remote information communication technology. I would hope key decision-makers consider these recommendations in detail and in good faith.

The committee will continue its work in the next six months on several key areas, including workforce related matters, and private sector engagement. Both are touched on in this report, however, the committee believes even more work needs to be done in detail on both. Personally, the options for privatisation of the NBN’s national wholesale platform remain unclear. If the current model is a public sector “build-own-operate” project, then questions still remain as to where, when and how a “transfer” to the private sector is going to occur, if it is going to occur at all. The reason this is important to consider earlier than currently legislated, is because a sale, if tightly contracted, could occur in several sections, and considerations therefore need to begin on what terms and conditions on behalf of consumers such a model could take place.

Of course, if the majority parliamentary view is not to sell it, and indeed to keep it as a public asset returning an annual dividend to the taxpayer, then this change in the final policy position also needs to be made explicit for legislative reasons, and a debate about this deserves to occur soon. This public debate about the sale of the NBN, and the new process that is established as a consequence of such a debate, could be bought forward for the next NBN Co Corporate Plan. For this reason, work on exactly what the final product that is being built-whether a private or public one, whether sold in parts, as a whole or not at all-will be undertaken by the oversight committee throughout 2012.

Once again, the committee thanks all those who have taken the time to give evidence over the past six months. This all helps with the committee’s independent considerations. Likewise, on behalf of the committee, I thank the secretariat for their ongoing diligence. This a large committee overseeing one of Australia’s largest ever infrastructure projects, and the secretariat is showing great skill in managing it all. Well done and thanks once again.

Robert Oakeshott MP

Chair


Committee Membership

Chair

Mr Robert Oakeshott MP

 

Deputy Chair

Mrs Yvette D’Ath MP

 

Members

Mr Paul Fletcher MP

Senator Simon Birmingham

 

Mr Luke Hartsuyker MP

Senator Carol Brown

 

Mr Ed Husic MP

Senator Doug Cameron

 

Hon Sussan Ley MP

Senator Mary Jo Fisher

 

Ms Amanda Rishworth MP (from     21.11. 2011)

Senator Scott Ludlam

 

Ms Michelle Rowland MP  (until 21.11.2011)

Senator the Hon Ian Macdonald

 

Mr Mike Symon MP

Senator the Hon Ursula Stephens

 

Hon Malcolm Turnbull MP

 

Participating Members

 

Senator the Hon Eric Abetz

Senator Steve Hutchins (from 24.3.2011 until 30.6.2011)

 

Senator Judith Adams

Senator the Hon David Johnston

 

Senator Chris Back

Senator Barnaby Joyce

 

Senator Guy Barnett (until 30.6.2011)

Senator Helen Kroger

 

Senator Cory Bernardi

Senator Gavin Marshall (from 24.3.2011)

 

Senator Catryna Bilyk (from 24.3.2011)

Senator the Hon Brett Mason

 

Senator Mark Bishop (from 24.3.2011)

Senator Anne McEwan (from 24.3.2011)

 

Senator the Hon Ronald Boswell

Senator Julian McGauran (until 30.6.2011)

 

Senator Sue Boyce

Senator the Hon Nick Minchin (until 30.6.2011)

 

Senator the Hon George Brandis SC

Senator Claire Moore (from 24.3.2011)

 

Senator David Bushby

Senator Fiona Nash

 

Senator Michaelia Cash

Mr Paul Neville MP (from 10.5.2011)

 

Senator the Hon Richard Colbeck

Senator Kerry O’Brien (from 24.3.2011 until 30.6.2011)

 

Senator the Hon Helen Coonan (until 22.8.2011)

Senator Stephen Parry

 

Senator Mathias Cormann

Senator Marise Payne

 

Senator Trish Crossin (from 24.3.2011)

Senator Helen Polley (from 24.3.2011)

 

Senator Alan Eggleston

Senator Louise Pratt (from 24.3.2011)

 

Senator the Hon John Faulkner (from 24.3.2011)

Senator the Hon Michael Ronaldson

 

Senator the Hon Alan Ferguson (until 30.6.2011)

Senator Scott Ryan

 

Senator Concetta Fierravanti-Wells

Hon Bruce Scott MP (from 26.5.2011)

 

Senator Mitch Fifield

Senator the Hon Nigel Scullion

 

Senator Michael Forshaw (from 24.3.2011 until 30.6.2011)

Senator Glenn Sterle (from 24.3.2011)

 

Senator Mark Furner (from 24.3.2011)

Senator the Hon Judith Troeth (until 30.6.2011)

 

Senator the Hon Bill Heffernan

Senator Russell Trood (until 30.6.2011)

 

Senator Gary Humphries

Senator John Williams

 

Senator Annette Hurley (from 24.3.2011 until 30.6.2011)

Senator Dana Wortley (from 24.3.2011 until 30.6.2011)

 

 

Senator Nick Xenophon

 

Committee Secretariat

 

Committee Secretary

Mr Peter Stephens

Inquiry Secretary

Ms Stephanie Mikac

Senior Research Officer

Mr Patrick Regan

Research Officer

Ms Lauren Wilson

Administrative Assistant

Miss Kane Moir



Terms of Reference

 

The resolution of appointment establishing the Joint Committee on the National Broadband Network was passed by the House of Representatives on 1 March 2011 and by the Senate on 3 March 2011 and provides:

(1)               That a Joint Committee on the National Broadband Network be appointed to inquire into and report on the rollout of the National Broadband Network (NBN);

(2)               That every six months, commencing 31 August 2011, until the NBN is complete and operational, the committee provide progress reports to both Houses of Parliament and to shareholder Ministers on:

(a)                The rollout of the NBN, including in relation to the Government’s objective for NBN Co Limited (NBN Co) to:

                                             (i)                    connect 93 per cent of Australian homes, schools and businesses with fibre-to-the premises technology providing broadband speeds of up to 100 megabits per second, with a minimum fibre coverage obligation of 90 per cent of Australian premises; and

                                           (ii)                    service all remaining premises by a combination of next-generation fixed wireless and satellite technologies providing peak speeds of at least 12 megabits per second;

(b)                The achievement of take-up targets (including premises passed and covered and services activated) as set out in NBN Co’s Corporate Plan released on 20 December 2010 as revised from time to time;

(c)                Network rollout performance including service levels and faults;

(d)                The effectiveness of NBN Co in meeting its obligations as set out in its Stakeholder Charter;

(e)                NBN Co’s strategy for engaging with consumers and handling complaints;

(f)                 NBN Co’s risk management processes; and

(g)                Any other matter pertaining to the NBN rollout that the committee considers relevant.

 


List of abbreviations

  ABS

Australian Bureau of Statistics

  ACCAN

Australian Communications Consumer Action Network

  ACCC

Australian Competition and Consumer Commission

  ACMA

Australian Communications and Media Authority

  ADSL

Asymmetric Digital Subscriber Line

  APCG

Asia Pacific Consulting Group

  AustPost

Australia Post

  AVC

Access Virtual Circuit

  BHC Council

Broken Hill City Council

  BOT

Build-Operate-Transfer

  CCS Act

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2011 (Cth)

  CD Shire

Central Darling Shire

  CEO

Chief Executive Officer

  CP

Conditions Precedent

  CVC

Connectivity Virtual Circuit

  DBCDE

Department of Broadband, Communications and the Digital Economy

  EPOS

Electronic Point of Sale

  FAN

Fibre Access Node

  FHA

Financial Heads of Agreement

  FRA

Fixed Radio Access

  FTTN

Fibre-to-the-Node

  FTTP

Fibre-to-the-Premise

  FWLDHB

Far West Local District Health Board

  GB

Gigabyte

  GBE

Government Business Enterprise

  HFC

Hybrid Fibre Coaxial

  ICT

Information Communication Technology

  IID

Implementation and Interpretation Deed

  IPND

Integrated Public Number Database

  ISS

Interim Satellite Service

  IT

Information Technology

  JCNBN

Joint Committee on the National Broadband Network

  KPI 

Key Performance Indicator

  LPO

Licensed Post Office

  LTSS

Long Term Satellite Service

  Mbps

Megabits per second

  NBN

National Broadband Network

  NBN Co

NBN Co Limited

  NT

Northern Territory

  NSW

New South Wales

  PC

Productivity Commission

  PIM

Public Information on Migration

  POAAL

Post Office Agents Association Limited

  POI

Point of Interconnect

  PSTN

Public Switched Telephone Network

  RFD

Retraining Funding Deed

  RDAFW

Regional Development Australia Far West

  RFDS

Royal Flying Doctor Service

  RoA

Resolution of Appointment

  RSP

Retail Service Provider

  SAU

Special Access Undertaking

  SFAA

Standard Form of Access Agreement

  SoE

Statement of Expectations

  SOTA

School of the Air

  SSU

Structural Separation Undertaking

  TLA Act

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2010 (Cth)

  TLA Bill

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill

  TUSMA

Telecommunication Universal Service Management Authority

  TUSMA Bill

Telecommunications Universal Service Management Agency Bill 2011

  UDRH

University of Sydney Department of Rural Health

  UNESCO

United Nations Educational, Scientific and Cultural Organisation

 

 

  Universal Service Reform Bill

Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011

  USO

Universal Service Obligations

  USP

Universal Service Provider

  VoIP

Voice over Internet Protocol

  WBA

Wholesale Broadband Agreement


 

Recommendations

2       Review of National Broadband Network Rollout Progress

Recommendation 1

The committee recommends that where possible tables and graphs be used in the Government’s Six Monthly National Broadband Rollout Performance Report to enable information to be compared across years.

Recommendation 2

The committee recommends that the Department of Broadband, Communications and the Digital Economy review its existing clearance processes for providing answers to questions on notice with the aim of providing answers to questions taken on notice where possible on the notified due date or within a reasonable timeframe thereafter.

4       Access to Broadband Services in Regional and Remote Areas

Recommendation 3

The committee recommends that, as a matter of urgency, the NBN Co formalise and publicise its policy for the provision of costing extensions to its planned National Broadband Network fibre footprint, especially for regional and remote Australia.

Recommendation 4

The committee recommends that NBN Co:

  • finalise and publicise its plans for community consultation with regional and remote Australia;

  • in its report to the committee include:

    Þ     details of the progress of its consultation plans;

    Þ     issues raised; and

    Þ     numbers of participants.

    Recommendation 5

    The committee recommends that the Department of Broadband, Communications and the Digital Economy and the NBN Co:

  • undertake a study of methods to improve access for low income households and other disadvantaged groups to the National Broadband Network and report its findings to the committee;

  • in conducting the study, include examination of community proposals for measures which would support a basic broadband account and a broadband low income measure scheme.

     

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