Thursday, October 21, 2010

Australia - Debate continues over the possiblility of a cost benefit analysis of the NBN

[the australian] Julia Gillard could be forced to subject her $43 billion National Broadband Network to a cost-benefit analysis.

The Coalition is seeking cross-bench support for a Productivity Commission examination of the plan.

But while the Greens have refused to rule out backing the move, the government has dismissed it as a political stunt designed to delay the rollout of benefits for all Australians.

Labor first promised the NBN in 2007 and made its potential use in health and education central to its campaign for the August 21 election.

However, while the economics of the proposal were examined in a $25million implementation study, it has never been the subject of a formal cost-benefit analysis.

Opposition communications spokesman Malcolm Turnbull yesterday produced a private member's bill that would require the Productivity Commission to examine the project and for the government's NBN Co to publish a 10-year business plan.

"What (Communications Minister Stephen) Conroy has been doing is selling the idea of the NBN and he doesn't want any scrutiny of the financials or any of the details because it would spoil the vision thing, the grandeur of it," Mr Turnbull told The Australian last night. "But the wastefulness of its conception is quite extraordinary."

Mr Turnbull said existing Telstra and Optus cables already passed 30 per cent of the nation's households and they could be upgraded for the cost of several hundred million dollars to deliver speeds in line with the NBN.

"Why would you overbuild a piece of infrastructure that can deliver those speeds now," he said.

"If you are genuinely committed to competition, why would you contractually compel Telstra and, he plans, Optus, not to use that HFC cable to compete with the NBN?"

Under Mr Turnbull's bill, likely to be introduced in the house next week, the Productivity Commission would report by the end of May next year. Mr Turnbull will require cross-bench support for his bill.

Key independents were keeping their intentions quiet last night, but Greens communications spokesman Scott Ludlam said "The Greens will consider whether this is a serious bid for transparency or another in a long line of Coalition delaying tactics designed to destroy the network".

Senator Conroy said a $25m NBN implementation study conducted by McKinsey and KPMG had included a detailed financial analysis, which found the project could cost less than $43bn and revenue produced would mean commonwealth investment would peak at $26bn, of which $18.3bn would be required over the next four years. The NBN Co would produce a business plan soon.

"If the (Coalition) were serious about world-class telecommunications infrastructure, they would support the rollout," Senator Conroy said.

Secretary of the Finance Department David Tune defended the decision to proceed with the NBN without a cost-benefit analysis.

Malcolm Turnbull wants Productivity Commission analysis of NBN

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