Many eyes make NBN heavy work
The Age
Wednesday March 23, 2011
NBN Co boss Mike Quigley yesterday produced some statistics that certainly underline that the broadband network he is building for the government is a political football.The company charged with deploying debt and $27 billion of taxpayer money on the design, construction and operation of the national broadband network fronts the Senate estimates committee three times a year, along with other government business enterprises. And it's getting much more parliamentary scrutiny than other enterprises that are under Communications Minister Stephen Conroy's wing.At the most recent estimates hearings in late February, the Australian Communications and Media Authority was left with five follow-on questions to answer before the next hearing. The SBS television network fielded two, Australia Post received 27 follow-on questions and the ABC a bit of a football itself received 43. Quigley was given 202 separate pieces of homework.Speaking in Melbourne yesterday, Quigley cited that to buttress his argument that NBN Co is the most scrutinised government business enterprise (GBE) in history, and arguably in danger of being overburdened.But he's going to have to get used to it. He's running the biggest and one of the riskiest capital works programs undertaken in this country. Disclosure has to be maximised, however inconvenient it is for NBN Co and its partners, including Telstra.The GBEs are audited by the Auditor-General, and provide business plans to the government. And unlike other GBEs, NBN Co's business plan is broadly in the public domain, after the government's release in December of 160 pages of the original 400-page plan submitted by NBN Co. Opposition communications spokesman Malcolm Turnbull has called for the entire report to be released, but the fact remains that after the December release, NBN Co has set a new benchmark on that front.The broadband company is also reporting into four parliamentary forums: the Senate environment and communications legislation committee, which is overseeing the legislation that enables the NBN; the House standing committee on infrastructure and communications, which has a brief from Infrastructure Minister Anthony Albanese to examine the broad economic and social impact of the project; estimates; and the joint standing committee on the national broadband network, a special-purpose committee that the government agreed to establish to win Senator Nick Xenophon's support for the project. Those final two committees will have a continuing oversight role once NBN Co is clear of the legislative process, and as Quigley observes, the politics of the project ensures that the level of scrutiny will be intense.Freedom of information inquiries will be another burden, but some critical disclosure points are looming as NBN Co and Telstra close in on their $11 billion deal for Telstra to co-operate with the construction of the network by selling and renting copper-network infrastructure to progressively transferring its copper-wire customers across to the NBN.Quigley is adamant that NBN Co is not going to be a cost-plus builder. The government will get detailed information about budgets and outcomes, and in the event of cost overruns will be making the call about whether the project proceeds, he told the estimates hearing last month.There is no specific requirement for the government to release the budget information it gets from NBN Co. Its decision to release an edited version of NBN Co's first business plan was an exception to the rule that GBE business plans are confidential. But in NBN Co's case, the government needs to continually demonstrate that it is not overlooking cost overruns in its desire to get the NBN built.The recent Australian Competition and Consumer Commission decision to lower the prices telcos pay for access to Telstra's copper-wire network will, for example, probably see Telstra book less revenue from the copper network until its copper-wire traffic has totally migrated across to the NBN.Telstra believes it extracted an agreement from the government during its negotiations over the NBN that it would have stable copper-network pricing until NBN Co took over, and in the wake of the ACCC decision is odds-on to seek compensation.The government can provide it by tweaking the terms of the NBN deal but if it does, the change should be detailed, along with the other aspects of the Telstra co-operation pact. Any claims on either side that aspects of the co-operation pact are "commercial in confidence" are overwhelmed by the public's need to know that this project will not blow its gargantuan budget.mmaiden@theage.com.au
© 2011 The Age