Historical context of the inquiry
The Select Committee on the National Broadband Network (the committee)
was established by the Senate on 25 June 2008, to inquire into and report on by
30 March 2009:
the government's proposal to partner with the private sector to upgrade
parts of the existing network to fibre to provide minimum broadband speeds of
12 megabits per second to 98 per cent of Australian's on an open access basis;
the implications of the proposed National Broadband Network (NBN) for
consumers in terms of:
service availability, choice and costs;
competition in the telecommunications and broadband services; and
likely consequences for national productivity, investment, economic
growth, cost of living and social capital; and
other related matters.
The full terms of reference were quite extensive and can be found at appendix 1.
Although the usual advertising procedures were followed inviting written
submissions, the committee was surprised that none had been received by the
initial submission closing date. A large mail out followed, with an extension
to the submission deadline advertised on the website.
The committee held seven public hearings and received 32 written
submissions prior to tabling its first Interim Report in the Senate on 2
December 2008. During this period a number of milestone dates set by the
government were extended, resulting in the bids for the Request for Proposal
(RFP) process closing on 26 November 2008, much later than originally
The qualifying bids on the RFP were evaluated by the Panel of Experts
established by the government. The evaluation was supported by a written
assessment of the proposals by the Australian Competition and Consumer
Commission (ACCC). The Panel's final report was provided to the government on
21 January 2009.
No government preference for any submitted proposals was provided during
the following ten weeks, which fuelled industry uncertainty and speculation as
to the fate of the proposed NBN. Eventually, instead of choosing a winning bid,
the government terminated the RFP process and announced a new NBN proposal in
The new proposal
On 7 April 2009, the Prime Minster, the Hon Kevin Rudd, the Treasurer,
the Hon Wayne Swan, the Minister for Finance, the Hon Lindsay Tanner and the
Minster for Broadband, Communications and the Digital Economy, the Hon Stephen
Conroy, jointly announced 'the establishment of a new company to build and
operate a new super fast National Broadband Network.'
The media release also announced the Rudd Government's decision to
'terminate' the National Broadband Network (NBN) Request for Proposals (RFP)
process, stating that their decision was made:
... on the basis of advice from the independent Panel of
Experts that none of the national proposals offered value for money. The Panel
noted the rapid deterioration of the global economy had a significant impact on
The government refused to make public the Panel's report, on which this
decision was made. Consequently, on 13 May 2009, the Senate passed an order
that no legislation relating to the NBN proposal be considered by the Senate
until the final report of the Expert Panel and that of the Australian
Competition and Consumer Commission (ACCC) are tabled in the Senate.
This committee published a second interim report, tabled in the Senate
on 12 May 2009, which provided a summary of the inquiry process and
outcomes to that date. The report provided evidence of the need to revise the
terms of reference for the inquiry in order to ensure that the new proposal
would be subject to the full scrutiny of the Senate inquiry process. A draft of
proposed terms of reference was included in the interim report.
Revised terms of appointment for
On 13 May 2009, the Senate approved a revised terms of reference for the
committee, extending the committee and requesting that a final report be tabled
in the Senate by 23 November 2009.
The revised terms of reference reflected the new broadband proposal of
the Rudd Government; however the remainder of the terms were similarly broad in
scope and largely unchanged.
The revised terms included inquiry into:
the government's decision to establish a company to build and operate a
National Broadband Network (NBN) to:
connect 90 per cent of all Australian homes, schools and workplaces with
optical fibre-to-the-premise (FTTP) to enable broadband services with speeds of
100 megabits per second;
connect all other premises in Australia with next generation wireless
and satellite technologies to deliver broadband speeds of 12 megabits per
second or more;
directly support up to 25,000 local jobs every year, on average, over
the eight year life of the project.
the implications of the NBN for consumers and taxpayers in terms of:
service availability, choice and costs,
competition in telecommunications and broadband services, and
likely consequences for national productivity, investment, economic
growth, cost of living and social capital.
The full set of the revised terms of reference can be found at appendix 2;
however, notable inclusions were that the committee's investigation examine:
any economic and cost/benefit analysis underpinning the NBN;
the ownership, governance and operating arrangements of the NBN company
and any NBN related entities;
any use of bonds to fund the NBN; and
any regulations or legislation pertaining to the NBN.
Conduct of the revised inquiry
The committee advertised the inquiry under its revised terms of
reference, calling for submissions by 3 July 2009. The details of the
committee's revised terms of reference and reporting date were placed on the
Due to the number of requests for providing late submissions after the
official closing date, the committee agreed that late submissions could
continue to be received, processed and published, as appropriate. Under the
revised terms of reference, the committee has received a total of 61 additional
written submissions at the time of reporting; these are in addition to the 41
submissions the committee published under the original terms of reference. A
list of the 102 submissions can be found at appendix 3.
Under the revised terms of reference, the committee has held five public
hearings in Canberra, Sydney, Melbourne and Hobart. There were ten public
hearings held under the previous terms of reference, producing a combined total
of fifteen public hearings held during the course of this inquiry. Details of
these hearings, including a list of witnesses who gave evidence, can be found
at appendix 6.
On 26 October 2009, the Minister for Broadband, Communications and the
Digital Economy (the minister) tabled out of session the ACCC report, together
with a 12 page extract from the almost 900 page Expert Panel report. His
objective in tabling these documents was to remove the Order of the Senate
which prevented the Senate from considering telecommunications bills, and consequently
allow the Senate to consider all pending NBN-related legislation.
At the time of reporting, this measure was not successful in lifting the
Order of the Senate. However, a subsequent compromise with the crossbench saw
the Telecommunications Legislation Amendment (Competition and Consumer
Safeguards) Bill 2009 exempted from the order. The bill was subsequently scheduled
for consideration by the Senate during the final two sitting weeks of the 2009
At the Supplementary Senate Estimates hearings, the minister announced the
deferral of the next two pieces of telecommunications legislation until early
2010, being: the legislation providing a governance framework for the NBN Co
and its subsidiaries; and laws to mandate the installation of FTTP in
A chronology of events that have occurred relating to the government's
NBN proposals can be found at page ix.
The committee considers that the National Broadband Network is an issue
of such national significance that this report should not signify the end of the
inquiry process. Rather, the committee believes that there is a critical need
for ongoing monitoring and reporting throughout the life of this project.
The committee also notes that, at the time of reporting, the findings of
the government's Implementation Study into the NBN, which is expected to set
out the way in which the NBN will be funded, rolled-out, managed and operated, are
still some months away, leaving many crucial questions unanswered.
Structure of the report
Chapter two of this report will detail the new broadband policy proposal
announced on 7 April 2009, and comment on various aspects of the proposal,
including the differences between the previous fibre-to-the-node (FTTN) proposal
and the current fibre-to-the-premise (FTTP) policy. A brief review of the OPEL
initiative proposed by the previous Coalition Government will be included, as
will a discussion of the footprint of 90 per cent FTTP coverage, versus the
satellite and wireless technologies that are to service the remaining 10 per
Chapter three will examine the progress made since April, noting the
various discussion papers published by the government, and outline the issues
under examination within the government's Implementation Study.
Chapter four will compare the advantages and disadvantages of aerial
cabling with those of underground cabling, for the rollout of new fibre
technology in the NBN.
Chapter five will look at aspects of NBN Co Ltd, established by the government
as a commercially viable Government Business Enterprise for the purpose of
building and operating the NBN in its formative years. Specifically, the
chapter will review what little detail is available relating to the governance
and role and funding of NBN Co and its fully owned subsidiary company, NBN
Chapter six will consider the issue of cost-benefit analysis, looking at
the commercial viability of the NBN and how it might impact on productivity.
A separate chapter (chapter seven) has been allocated to discuss the
importance of ensuring the development of broadband applications continues in
parallel with the implementation of the NBN.
Chapter eight will review the government's intention to reform the
telecommunications regulation regime, and examine those aspects of the
Telecommunications Legislation Amendment (Competition and Consumer Safeguards)
Bill 2009 relevant to the NBN proposal.
Chapter nine provides the committee's concluding remarks and final
1.31 The committee would like to express its appreciation for the cooperation of all organisations and individuals who continue to make their time available to assist the inquiry, whether by personal appearance at a public hearing or by providing the committee with a written submission. Particular thanks are extended to Mr Jonathan Chowns, previously working within the Parliamentary Library, who provided the committee and secretariat with a wealth of contextual information throughout the inquiry process. The committee would also like to record its appreciation to the officers of the secretariat who assisted with the conduct of the inquiry and the drafting of this third report.
Note on references
1.32 References to the committee Hansard are to the proof Hansard – page numbers may vary between the proof and the official Hansard.
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