Business Council slams NBN plans

Stuart Corner
Monday, 26 October 2009 07:48

IT Policy - Government Tech Policy

The Business Council of Australia has raised a number of significant concerns with the Governments' $43b National Broadband Network and says the implementation study is the only way for these to be addressed. It has called for the output of the study to be made public.

The BCA says it has three major concerns with the NBN: "First, the process that has been followed to date in developing the policy; second, the potential conflict of interest in the Government being developer and owner of the NBN as well as establishing the regulatory framework for it; and third, it is not clear what the future competition regime will be for telecommunications."

The BCA's comments are contained in its just-released report , "Groundwork for Growth: Building the Infrastructure that Australia Needs." However the bulk of the 150 page report, and the BCA's views on the NBN are contained in an included study prepared for the BCA by Rod Sims of Port Jackson Partners Limited (PJPL), titled 'Seizing the Opportunity to Reform and Restore Australia’s Economic Infrastructure’.

The PJPL study is highly critical of the Government view that there is no need for a comprehensive cost-benefit analysis of the NBN programme, because the need for it is, largely self-evident. "The problem with this sort of decision making is two-fold," the report says. "First, is the money committed to the NBN being spent on a project where the benefits outweigh the costs? And second, is it being spent on the best program possible? The money committed to the NBN has a high opportunity cost in terms of other priorities it could be spent on."

It cautions the government on the potential for conflict of interest between its role as "the promoter, developer and majority shareholder of the NBN, as well as setting the regulatory framework for it," saying: "In this situation there will be no shortage of ideas on how to benefit NBN Co to the ultimate detriment of consumers, so the Government will need to proceed with care."

The PJPL report sees the NBN implementation study as key to dealing with these concerns and calls for the output to be made public "So that there is increased confidence in the proposal."

Communications minister, Stephen Conroy, has said that no decision has yet been taken on whether to make the study results public.

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