National Broadband Network

Mr Fletcher asked the Minister representing the Minister for Broadband, Communications and the Digital Economy, in writing, on 9 February 2012:

Further to the answer to question in writing No. 510 (House Hansard, 7 February 2012, page 126), is it a fact that (a) neither the National Broadband Network (NBN) Implementation Study, the NBN Co. Limited Corporate Plan, nor the independent verification by financial advisory firm Greenhill Caliburn were prepared prior to the Government deciding to proceed with the investment in the NBN, and (b) the Government did not conduct a feasibility study prior to the Government deciding to proceed with the investment in the NBN; if so, why.

Mr Albanese: The Minister for Broadband, Communications and the Digital Economy has provided the following answer to the honourable member's question:

(a) No. The National Broadband Network (NBN) Implementation Study, the NBN Co. Limited

Corporate Plan, and the independent verification by financial advisory firm Greenhill Caliburn were

prepared prior to the funding decision in the 2011-12 Budget to proceed with the investment in the

NBN.

The government announced on 7 April 2009 that it would establish a new company to design, build and operate a new enhanced high-speed National Broadband Network (NBN) connecting 90 per cent of all Australian premises with fibre to the premise technology (FTTP) and all other premises with next generation wireless and satellite technology. The decision to adopt FTTP technology was informed by advice from a range of stakeholders including the independent Panel of Experts who advised on the original fibre to the node (FTTN) Request for Proposal (RFP) process. The Australian Competition and Consumer Commission also endorsed the use of FTTP as a superior technology to FTTN.

At the time of the NBN announcement the government commissioned a detailed National

Broadband Network Implementation Study which was undertaken by McKinsey &

Company/KPMG and completed in March 2010. The study, informed by detailed stakeholder consultations, found that FTTP is widely accepted as the optimal future proof technology and can be built on a commercially viable basis with affordable prices for consumers.

Following initial equity investments from June 2009 to establish the Company and initiate detailed

planning, the 2011-12 Budget reflected the Government commitment to proceed with the detailed

NBN Co Plan, and providing $18.2 billion in equity funding to the NBN Co.

The funding decision was informed by the NBN Co Corporate Plan 2011-2013. This confirmed that the NBN will provide all Australians with world class broadband on a financially viable basis with affordable prices for consumers. The Greenhill Caliburn Pty Ltd assessment of NBN Co's Corporate Plan 2011-13 concluded that it provides the level of detail and analytical framework that would be expected from a large listed public entity, and taken as a whole is reasonable for the development of the NBN.

(b) The NBN Co is an investment that is assessed to generate a financial return.

The National Broadband Network (NBN) Implementation Study, the NBN Co. Limited Corporate

Plan, and the independent verification by financial advisory firm Greenhill Calibum collectively

demonstrated the financial viability of the NBN and that the project is feasible.

The Government has not commissioned any reports to evaluate the Government's policy objectives

or to evaluate the full social benefits that will result from the implementation of a high speed

broadband network. The broader economic benefits have, however, been well understood and

accepted for some time. Such benefits have been documented and endorsed by the Organisation of

Economic Cooperation and Development, Access Economics and a range of other studies conducted here and overseas prior to the NBN announcement.

The three studies cited were all concluded prior to the decision to proceed with the investment in the NBN as reflected in the 2011-12 Budget.