NBN legislation stalled in Senate as telco chiefs attack costings

Debate is still ongoing in the Senate over the National Broadband Network, with the Coalition and minority parties flagging amendments that will delay proceedings through the rest of the day, despite the Government winning enough votes to pass its legislation.

The delays have put Communications Minister Stephen Conroy on the offensive, attacking a statement put out by a group of tech veterans claiming the 36-page amended business plan doesn’t provide enough detail.

Those criticisms have also been exacerbated by a claim from the Opposition that the NBN project has a $900 million black hole. Quoting figures from the NBN business case referencing a 10-year bond rate of 5.4% used to calculate interest payments, Robb says the company will end up paying $900 million more.

“If they’ve made convenient assumptions, what other assumptions have they made to minimise expenses,” Robb told AAP. “If the NBN Co is correct, we have a $900 million black hole.”

That criticism has been bolstered by the Alliance for Affordable Broadband, a group of tech entrepreneurs including former Pipe Networks chief Bevan Slattery and Vocus chief James Spenceley.

In a four-page letter sent to the Government, the alliance claims the 36-page summary “appears to raise more questions than answers”.

The letter itself is concerned with part of the summary that says the total direct network investment made in the NBN appears to be $46.4 billion, but the alliance says that another $4 billion will be needed to cover interest repayments.

It also claims that migration incentives for Telstra should be factored into the cost of the full network, meaning the actual “total project cash outflow” will be $55 billion.

“This seems to suggest there is some doubt whether payment to Telstra of some $4.8 billion in migration incentives guarantees that Telstra will migrate most if not all its fixed line customers,” the alliance said, according to ITNews.com.au.

“Unless there is absolute certainty regarding Telstra migrating all its clients as part of that incentive, then the entire $4.8 billion payment should be added to the overall project cost.”

The alliance also said it was concerned about one part of the summary that said “based on take up and speed usage growth assumptions, NBN Co anticipates being able to reduce real prices for all products and nominal prices for all products, except the basic service offering.”

It said this was “disturbing”, and wants the Government to clarify its findings.

“By this statement, NBN Co expects to decrease the real prices for products able to be afforded in homes with higher incomes, yet households on low incomes who can only afford the most basic service will not see any similar improvement in affordability and in fact, it would appear that it is NBN Co’s intention to make this product less affordable over time,” the alliance said.

But Conroy told the ABC that prices are expected to fall over time, and attacked the alliance as a group of “10 CEOs who represent almost no customers”.

“Does anyone know how many customers they’ve got?” Conroy said at a press briefing. “[AAPT chief] Paul Broad doesn’t have any customers – he’s wholesale only. He doesn’t have any retail customers at all.”

“They want me to build a rival wireless network to compete with the 3G networks which we are distinctly not interested in,” Conroy said.

The Government is expected to vote on the NBN legislation today.


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