NBN Co business case: A big fat load of nothing


opinion I just wasted twenty minutes of my life poring through one of the most boring and vacuous documents which I have had the privilege to read in my career as a journalist. And I want that time back.

The document in question was the summary of the National Broadband Network Company’s business case which Senator Nick Xenophon and the Greens went to such extraordinary lengths to pry from Labor’s lockdown total control zone this week.

They needn’t have bothered … if this was all they were going to get.

In its first paragraph, the document states that NBN Co’s business case is based on “detailed engineering, financial and business analysis” which the company has undertaken over the past 12 months. Analysis which will guide where billions of dollars of public money will be spent in the next decade. Analysis compiled by some of Australia’s foremost telecommunications experts, working in a company which is filled with prodigious engineering and financial talent.

Sadly, absolutely none of that analysis has actually made it into the summary document which Labor released this afternoon. Instead, we get 36 pages (not 50, as Prime Minister Julia Gillard suggested) of motherhood statements and the most tedious waffle that taxpayer money can buy.

Much of the document appears to have been plagiarised from Stephen Conroy’s dictionary of stock standard NBN phrases, used to regular boring effect in his almost daily press releases and public speeches on the NBN:

The NBN will deliver a significant, once in a generation restructuring of the industry, resolving the current infrastructure and investment bottlenecks that have seen Australia fall behind its international peers.

While other sections tell us things that we already know, such as the product composition which NBN Co plans to take to retail internet service providers. And of course there are plenty of nice statistics about how important broadband speeds are, and about how they are increasing everywhere all the time, in an ubergeek bandwidth brain explosion:

Current forecasts anticipate that there will be more than 50 million end users connected by fibre to the premise (FTTP) technologies worldwide by the end of 2010 compared to 43 million at the end of 2009, mostly in Asia.

Where the NBN Co business case summary does go into detail, it does so sparingly and doesn’t disclose much that wasn’t already suspected.

For example, it puts the total capital expenditure required to build the network at $35.7 billion, a smaller figure than the $43 billion originally anticipated, because of its deal with Telstra. And it discloses that NBN Co expects its internal rate of financial return to exceed the Government’s long-term bond rate. There are also specific timing details included about the network rollout.

Of course, all of these are things that were publicly known already, or had at least been extrapolated. And none of it is surprising.

The fact that the business case summary released by the Government this afternoon is a pile of vacuous self-evident truths that we already knew should pose Nick Xenophon a serious quandary. If the Senator is serious about trying to bring some transparency to the debate about the future of Australia’s telecommunications sector, and we believe that he is, then he should throw this ridiculous document in the Government’s face.

If he doesn’t, he will, by implication, be guilty of the same crime that so many have accused Labor of this week: Needlessly hiding relevant facts behind closed doors.

Go back to your drawing board, Senator Xenophon. This is not the NBN Co business case you’re looking for. The fact that Labor is attempting to placate you with this pile of vacuous nonsense is an insult to your intelligence and that of every thinking Australian.

Image credit: Zsuzsanna Kilian, royalty free


  1. Summary of the Summary: Can we build it? Yes we can!

    It also seems to go to great lengths to say that NBN Co really, REALLY wants all the surrounding legislation to pass quickly and without delay, otherwise maybe it can’t deliver everything it was promising… self-fulfilling prophecy I would say.

      • Well Renai, it is difficult to tell if your vituperating diatribe is politically motivated or you have simply run out of ideas.
        If it is the former you should write for The Australian and if it is the latter you shouldn’t be writing for this publication. It seems that the only thing that is vacuous is your thought process.
        If you had or have any valid technical objections against the NBN, you may well have been better to outline them.
        Instead you chose to be Andrew Bolt–light.

        The difference is that at least he has conviction, whereas you are a cane toad.

        • That seems unfair. As a journalist, it is his duty to report the whole story. And whilst I think none of us disagree with the potential of the NBN, there is a chance the Gov could royally screw it up. By forcing them to be as transparent and possible we can ensure to the best of our ability that it succeeds .

        • I don’t have any technical objections against the NBN; I do have economic objections though. But in this case my objections are not to the NBN; but to Conroy’s lack of transparency — a problem I have been fighting against for several years ;)

        • You know calling someone a “cane toad” doesn’t help your argument either Nigel. If Conroy had released a better document instead of the vacuous nonsense he did release then Renai might have had something more substantial to report.

          Suffice to say Conroy has a long track record of excelling at the art of smoke and mirrors especially with his internet censorship policy and some aspects of the NBN. Until Conroy proves otherwise it is our duty to grill him at every opportunity.

    • Summary of the summary of the summary = Trust Us

      But why should we without numbers? Especially the POI number.

  2. What you fail to mention in your opinion piece is the fact that Nick Xenophon also succeeded in getting a briefing from Mike Quigley, which he is free to comment on as he sees fit.

    Until he actually has that briefing and comments on it you might want to hold off on questioning his intelligence.

    • I fail to see how Quigley will be able to lay out complicated NBN Co costings in a briefing in a digestible form — without handing over further documents. But I take your point.

  3. While i agree it didn’t have much information in it, what it did have was informative for those who had not gone through it before.

    It was more a marketing document that laid out the basics.

    I could have told you it wasn’t going to in depth!

    Prices/other terms will follow in the next month.

    At least we now have a timeline.

  4. For me, the decision on Points of Interconnect (POI) are completely the sticking point.

    Given that the final number of POIs will have a huge effect on costings and timelines, not to mention potential tender deals with suppliers – (given the amount of equipment would change) – I don’t see a problem with the position that the plan is still commercially sensitive until it is able to be finalised.

    The Telstra deal cannot be finalised until the legislation passes, that’s a given. The POI model can’t be finalised until the ACCC comes back on November 30th.

    While the report released today is certainly “thin” on financial details, the government has clearly drawn a line in the sand in both houses of parliament this week as to when this stuff can be finalised and released, so they are going to want to stick to that plan.

  5. Did I miss something?

    $35.7 billion build cost + $13.8 billion to Telstra = total build cost of $49.5 billion

  6. Outraged because a summary doesn’t contain every detail? Sounds like someone doesn’t quite grasp the idea of a “summary”. Summaries, by definition, do not contain every detail. Otherwise they are no longer summaries. Is that really all that hard to understand? If you want all the detail, right now, then your complaint should be about only getting a summary when you want every detail, right now. Such a request has it’s own problems, but is much more reasonable than being angry because a summary turned out to be, in fact, a summary.

    • A summary doesn’t contain EVERY detail, sure. But you’d think there’d at least be SOMETHING. This document is 36 pages of absolutely nothing… at least, nothing that we didn’t already know.

      Personally, I’ve been a big supporter of the NBN, and I really want it to succeed, but the way the government – and Conroy in particular – has been approaching it recently has me a little worried.

  7. @Nigel

    Grats on learning how to attack the man. Perhaps one day you will finally learn the art of attacking the topic instead.


    The ‘summary’ is a collection of sales pitch phrases jammed together to make it look like the government is doing something. There is little information and almost nothing that would add anything meaningful to the Telstra separation debate. I’m surprised Xeno went for it tbh…


    Probably something that should have been clarified in the ‘summary’, don’t ya think.. =)

  8. Given the length of the economic life of the project and that it relates to the fast moving would of technology, clearly assumptions were needed. And whose assumptions are any better than anyone else’s?

    Why would anyone have been expecting this document, in it whole or summary form, would contain an answer Malcolm would find “persuasive”.

    • Absolutely correct.

      Any business “plan” – and note the definition of what a “plan” is – requires a certain degree of vision, expectation, and oddly enough, assumption. A plan is a framework, not a iron clad set of instructions.

      There is no way anyone can predict exactly how the world will be turning in 5 or 10 years time. Not you, not me, not the ALP, and most certainly not the Coalition. Nobody.

      Every business venture is a risk. Without risk, there is no return. There is a whole section in this document describing risk management procedures.

      While the document in and of itself is somewhat “thin”, as someone who works in the sector, and creates any number of tender responses and business “plans” – (as well as technical solutions) – in any given period, I took more from the fact that NBN Co have what appears on the surface at least to be a significant and well thought out risk management plan than anything else.

      The NBN is a gamble, absolutely. The Coalition plan would have been a gamble. Doing nothing at all would be a gamble.

      At least now the process has some of its boundaries defined, and a logical and achievable – (in my mind) – timeline.

      Hopefully the full plan is only a matter of weeks away, as promised.

      • The NBN rollout is going full steam ahead, it’s not sitting on the sidelines waiting for the financial case to support its existence to be published.

        You waffle on about any project has a risk , yes you are right but the business plan or CBA is usually done BEFORE the project goes ahead, this project is trying to justify itself after the event (that’s assuming we get to actually read something!).

        This is a political project, it was a Labor political decision made in haste when the original Rudd/Conroy FTTN/FTTH tender fell in a heap, all this business case crap and negotiating with the Greens and Xenophon is just smoke and mirrors to give the illusion that a proper process is taking place.

        In the meantime in the real commercial world out of the fairy land that is called the Senate the NBN Co is signing contracts with suppliers as fast as it can, “hey the contracts have been signed we cannot back out now it will cost us penalty millions”.

        Nice strategy, it has worked before it will work again, even if there is another early election it will be hard for the Coalition to backtrack on this one, but then Conroy and the NBN Co know that.

  9. Ill sum it up for you.

    There is two types of people that are interested in the NBN for whatever reason. The people that read news.com.au and the morning papers, and the people that read actual IT news and opinions from people in the IT industry.

    The difference is that for people that read IT news, such as all of us. THERE ISNT ANYTHING NEW. We know all of this, we have read the articles, the nbn documents, even the whirlpool posts.

    For everyone else – the majority; the mums and dads that read the morning paper, the people only caring about their tax dollars, and the people that live life dedicated to one political party – THIS IS NEW! They didn’t know this information. Unfortunately, most politicians also fall into this category. Xenophon included.

    Think about it.. Who are labour and the NBN really trying to win over here? The Majority or the minority?

    • Well, technically, Labor are ONLY trying to win over Senator Xenophon… nobody else matters at this point. And to that end, it looks like they’ve succeeded. As much as the Libs & Turnbull bluster and act all petulant, they really don’t matter any more.

      If the government can hold itself together until the next election, the NBN will simply be too far along for the Libs to dismantle it, even if they do win. I guess that’s one thing we learnt from the summary…

  10. The NBN summary was always going to be a ‘big fat load of nothing’ ,Conroy is playing the Independents and the Greens the latter with their so called gain about privatisation of the NBN Co as suckers.

    Labor cannot believe their luck, they got into power courtesy of the Greens and the Independents and they are having a easier time in the Senate than they did under the previous Government under Rudd.

    Reminds me of the Democrats all over again, and we all know what happened to them, people elect non-Labor or non-Coalition Senators for a reason, not just just to side with the Governing Party after some pathetically weak token efforts at so called ‘gains’ for themselves.

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