Labor Senators' Dissenting Report
1.1
The intent of the National Broadband Network Companies Amendment
(Tasmania) Bill 2014 is to legislate for the fulfilment of the promise
Tasmanians believed was made to them prior to the 2013 election. Nothing in the
Chair's Report addresses this fundamental issue.
1.2
Australians generally may already be immune to the ongoing saga of the
Coalition’s broken promises. Not least of these was the promise made by the
Minister for Communications and the Prime Minister in April 2013 that all
premises would have access to download speeds of 25 Mbps by 2016[1].
1.3
So confident was the Prime Minister in this promise that on the night of
the election in his “letter to the people of Australia” he wrote:
We will deliver a new business plan for the NBN so that we
can deliver faster broadband sooner and at less cost. I want our NBN rolled out
within three years and Malcolm Turnbull is the right person to make this
happen.[2]
1.4
The promise that all premises would have access to download speeds of
25 Mbps by 2016 was unashamedly broken by Minister Turnbull only three
months after the election.[3]
1.5
The specifics of the promise made to Tasmanians were outlined in Senator
Urquhart’s second reading speech. Key issues raised in the second reading
speech are as follows.
1.6
The statement by TasICT Executive Officer Dean Winter on 27 May 2013
saying he was confident that the that the rollout would occur as planned
because Mr Turnbull had written to assure him that the Coalition intended
to honour existing fibre to the premises (FTTP) contracts.[4]
1.7
The issue came to the fore again on 15 August 2013 when the now Prime
Minister released the ‘Economic Growth Plan for Tasmania’ that announced that
the Coalition would only honour contracts “underway.” Mr Turnbull, aided by
Senator Bushby, again reassured Tasmanians that the NBN would be completed
under the original contract to roll out FTTP across Tasmania.[5]
1.8
The farce continued into March 2014 following statements by NBN Co
Executive Chairman Ziggy Switkowski that the contracts had been amended to
deploy the so-called multi-technology mix (MTM). Mr Turnbull met the renewed
political storm by offering then Tasmanian Liberal Opposition Leader Will
Hodgman the promise of a new aerial deployment trial with the hope this could see
the original all fibre vision fulfilled.[6]
1.9
Tasmanians have expressed their frustration by disengaging from the
policy, as reflected in the low levels of submissions to the inquiry. This does
not represent a lack of community concern, but it does reflect the concerns as
expressed by TasICT in its submission that the NBN issue has become overly
politicised:
While TASICT remains supportive of the full FTTP NBN rollout
to around 190,000 premises originally earmarked for the technology, but only
once the current rollout issues are resolved. The Bill in question appears to
be politically motivated and will not provide any solution to the ongoing
issues being felt in Tasmania.[7]
The NBN project has been used as a political tool by all
major political parties at a state and federal level. It has been frustrating
to see the real issues skimmed over or ignored, as evidenced by the Bill being
assessed by this Senate Committee.[8]
1.10
These comments by TasICT reflect all that is wrong with modern politics,
where an Opposition will say virtually anything to get elected, and the
repudiate it once elected.
1.11
The Bill is unashamedly politically motivated, it is motivated by the
desire to have Minister Turnbull fulfil the commitments he made to the people
of Tasmania.
The Stalled Roll-out
1.12
TasICT also noted in its submission the fact that the NBN roll-out in
Tasmania was stalled before the election. TasICT's claim that the rollout
issues in Tasmania were “never dealt with by the Government of the day”[9]
are incorrect; to a degree they were caused by the Government.
1.13
As TasICT notes a major contribution to this was the suspension of
remediation activity by Telstra as they revised and improved their management
of the handling of potential asbestos related material. The Labor Party was not
prepared to put the safety of Australian workers and households at risk merely
for the sake of achieving roll-out metrics.
1.14
The fact that the workflow to Visionstream was no longer consistent
meant that Visionstream and its sub-contractors had not reached a standard
roll-out schedule that was sufficient to achieve the economies expected from
roll-out experience at the point envisioned in contracts.
1.15
All these issues would have been able to be dealt with by NBN Co
immediately following the election, as Telstra remediation work recommenced.
Instead, the turmoil created at NBN Co by management changes and the conduct of
a Strategic Review to “prove in” the Coalition Policy meant that recommencing
the roll-out in Tasmania did not receive the priority it required.
Tasmanian Roll-out since the
Federal Election and the Aerial Trial Sham
1.16
In February 2014, Minister Turnbull said “work on the NBN rollout in
Tasmania is back on track.”[10]
1.17
However, since the Federal Election, the Coalition Government has
overseen a dramatic slow-down in the rollout with only 5,500 premises passed in
six months, no design contract instructions issued and only 3 build contract
instructions issued;[11]
potential connection delays for consumers of 140 days;[12]
and legal action being brought against NBN Co's principal delivery partner, and
potentially NBN Co, from its contractors.[13]
1.18
The decision to abandon FTTP NBN in Tasmania not only impacts consumers
but the contractors who had scaled up their business on the basis of the
supposed bipartisan commitment to the full rollout.[14]
Labor Senators are deeply concerned that Minister Turnbull's broken promise has
negatively impacted on Tasmanian small business owners.
1.19
The Turnbull/Hodgman aerial NBN FTTP trial is a short term cost savings
measure and is unlikely to lead to a full FTTP rollout across the state. NBN Co
officials confirmed at the May 2014 Senate Estimates that the trial is
"business as usual" and not a significant factor in the NBN rollout
in Tasmania.[15]
On the contrary, the State Liberal Government has continued to pretend in
public statements that the Tasmanian FTTP rollout will be completed.[16]
The Significance of the Access Technology
1.20
The submission from TASICT identifies the importance to the Tasmanian
economy of broadband, saying:
TASICT has historically been very supportive of the National
Broadband Network (NBN) rollout in Tasmania. It supported the original NBN plan
and believed wholeheartedly in its ability to reduce Tasmania’s primary
historical economic disadvantage: its remote location.
By upgrading Tasmania’s existing communications
infrastructure, the NBN can change the way Tasmanians interact with each other,
mainland Australia and the rest of the world. For the few already using the
technology, it is fundamentally changing the way they do business.[17]
1.21
While TASICT has expressed a degree of resignation about broadband and
would like to see anything happen rather than the best thing happen, real users
like Advanced Computer Fix show the real significance of the technology choice.
The submission noted:
Fibre is faster than copper, today and will meet the
infrastructure requirements of Australia for the next century. The likelihood
is copper will need to be replaced in the next ten years with fibre as the
demand for internet services increases.
Not everyone requires fibre today. Most people are quite
satisfied with the speed of their internet currently. Not everyone has to
update their computer, or wants to share files or use tele-health and
education. But just because not everyone wants to use these services shouldn’t
mean everyone should have no access to these services.[18]
1.22
These comments have recently been echoed in the UK which is well
advanced in implementing the “Fibre to the Node” elements of the MTM[19].
The Federation of Small Businesses says that the UK's broadband target is simply
not ambitious enough, and it is calling on the government to commit to
delivering a minimum of 10Mbps (megabits per second) for all homes and
businesses by 2018/19, and 100Mbps by 2030.[20]
Costs to Complete a FTTP NBN and User
Prices
1.23
The Chair's Report asserts that the completion of a FTTP network would
cost $29 billion more than the optimised technology mix and that prices would
need to rise.
1.24
As has been detailed in the First Interim Report of the Senate Select
Committee on the National Broadband Network these claims are simply false.
1.25
The Strategic Review modelled two all fibre scenarios under the
pejorative labels “Revised Outlook” and “Radically Redesigned.” As was outlined
in the First Interim Report a number of technical design changes, entirely
consistent with the Statement of Expectations then applied to NBN Co, had been
identified by the previous management of NBN Co. These were, however, excluded
from the Revised Outlook and only included in the Radically Redesigned Scenario.[21]
1.26
The Radically Redesigned Scenario was a more accurate representation of
the cost of the NBN under an all fibre model, and that reduces the peak funding
for an all fibre model by $10 billion.[22]
1.27
The First Interim Report also noted that the Strategic Review assumed
away most of the revenue differential accruing by the availability of higher
speed services over fibre. Correcting for that reduces the cost differential substantially.[23]
1.28
Further, the difference in the two costs stated does not include the
cost of a future upgrade to FTTP despite the Strategic Review acknowledging
that the MTM will need to be upgraded.[24]
1.29
More strikingly, the Chair's Report repeats the fantasy that prices
would need to rise under the fibre model to recover costs, but it does so only
after having already assumed lower prices than already included in the
Corporate Plan.
1.30
The most egregious piece of misrepresentation occurs in NBN Co’s
submission to the Committee. The NBN Co submission states:
It is also important to remember that a significant
proportion of end-users choose lower speed tiers such as those based on NBN
Co’s layer 2 12/1 or 25/5 Mbps services.[25]
1.31
In fact, about 75% of customers are on these two speeds.[26]
But later in the submission NBN Co, in reporting the hypothetical price
increases referred to above, states:
The retail price of internet access would have to increase by
up to 80 percent – a price rise of $43/month for a typical household on
a 50 Mbps plan.[27]
(Emphasis added)
1.32
This is the standard of political “debate” the Abbott Coalition
Government and Minister Turnbull has reduced the country to – to argue that few
users want a service faster than 25/5, but to quote (inflated hypothetical)
price increases for a 50 Mbps service and call it “typical.”
Departmental Concerns with the Bill
1.33
The Labor Senators concur with the Department view that legislating the
technology requirements for a specific geography is not an ideal way of
progressing. However, it is the only means available to the Parliament to make
the Minister fulfil the promise he made to the people of Tasmania.
1.34
Much of the rest of the Department’s concerns are spurious at best. To
suggest that the Parliament exercising its right as the representatives of the
true shareholders of NBN Co are somehow conflicting with the Corporations Act
or the directives provided by NBN co by shareholding Ministers is simply to
confuse the roles and responsibilities of the relevant parties.
1.35
It is also inconsistent to claim that legislating for the prioritisation
of Tasmania is now disadvantaging the rest of Australia is inconsistent with
the fact that this was the position as announced in March 2012 when the initial
three year rollout plan was released.
1.36
If there is an implication for the cost of the rollout for the rest of
Australia that is an issue the Minister needs to deal with. It was the Minister
who was at pains to convince Tasmanians that they were not part of the plans to
change the technology mix for the NBN.
Conclusion
1.37
The Chair's Report has resorted to a continuation of the distortion of
facts that was presented in the NBN Co Strategic Review.
1.38
Nothing in the submissions by NBN Co or the Department of Communications
provides a reason why Minister Turnbull’s commitment to the people of Tasmania
to rollout the FTTP NBN as contracted cannot be fulfilled.
Recommendation 1
Labor Senators recommend that the National Broadband Network
Companies Amendment (Tasmania) Bill 2014 be passed.
Senator Anne
Urquhart
Senator for
Tasmania
Deputy Chair
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