Telco CEOs back Turnbull's call for NBN cost-benefit analysis

Stuart Corner
Monday, 15 November 2010 18:05

IT Policy - Regulation

The Alliance for Affordable Broadband - an informal grouping of telco CEOs - is calling on MPs to support a bill that would see the NBN referred to the Productivity Commission for a cost benefit analysis.

The AAB comprises David Waldie, CEO - Allegro Networks; Bevan Slattery, founder - Pipe Networks; Jason Ashton, CEO - BigAir; James Spenceley, CEO - Vocus Communications; Paul Broad, CEO - AAPT; Paul Wallace, CEO - Polyfone; John Lane, CEO - EFTel; Tim McCullagh, MD - HaleNET; Chris Deere, CEO - Ipera Communications and Andrew Findlay - managing director of Vertel.

They have written an open letter to the four independent members of the House of Representatives urging them to support legislation that would refer the National Broadband Network to the Productivity Commission for a cost benefit analysis.

The legislation - the National Broadband Network Financial Transparency Bill (2010) - was introduced by shadow communications minister, Malcolm Turnbull, in late October.

The AAB members claim to "fundamentally agree that national broadband capability in the 21st century is what railways and roads were in the 19th century and agree that this is a once-in-a-generation nation-building project."

However they say that "policy of this magnitude which carries with it fundamental changes to the entire fabric of the national telecommunications landscape and re-creates a new government-owned monopoly requires Members of Parliament to ensure such a policy is the best policy for the future development of the country, and in particular the delivery of the most efficient investment by the Australian taxpayer."

They argue that "Past delays cannot justify panic or cut corners now. Mistakes we make in the design and/or policy settings for the proposed NBN, particularly in the areas of structure, affordability and accessibility, will not be easily fixed down the track and could be disastrous for our international competitiveness."

The also claim that the NBN proposal now differs significantly from the proposal that was contemplated in the Implementation Study and are particularly concerned about NBN Co's preference for  a small number of points of interconnect nationally, saying: "This has been met with almost universal opposition from the industry, will strand billions of dollars in private investment and thousands of kilometres of optical fibre, and lead to network inefficiencies."

They say the Productivity Commission's review should cover:
Our view is that the Productivity Commission's review should cover:
- The importance of affordability and accessibility to the overall growth in productivity;
- Whether the current proposed structure of NBN Co and the creation of a new infrastructure monopoly will be in the long terms interests of consumers;
- Guidance and recommendations designed to ensure the future structure, products and services delivered by NBN Co are clearly defined and reduce the risk of mission creep resulting in the removal or reduction of competition in the Australian telecommunications market;
- Detailed research on the demonstrated productivity benefits (or lack thereof) from existing FTTH deployments (for example of Korea and Singapore);
- A comparative analysis of the approach taken in other countries (including the UK and the USA) to the issue of a national broadband network and, where they differ, why;
- The future technology requirements of mass market consumers versus business, health, education and government users, to enable the costs and benefits of each to be weighed separately and compared;
- Placing a value on the cost of losses in innovation and competition as a result of the legislated monopoly and overbuild of the NBN, as well as in the last four years because of the overhang and uncertainty of the NBN proposal.