Shadow Communications Minister Malcolm Turnbull late last week warned the National Broadband Network may end up not being fully constructed, due to what he described as “the crippling costs of the project” and the likelihood that the Australian Labor Party might lose government in a future election.
The Liberal MP’s comments came after Telstra last week revealed it had been forced to delay a vote to be put to shareholders regarding whether it should go ahead with its $11 billion deal to transfer customers onto the NBN as the new fibre monopoly rolls out its infrastructure around the nation, with NBN Co subsequently stating the deal could affect the timing of the next stage of its fibre rollout plans.
Turnbull said in a blog post that it could be assumed that the delay was the consequence of Telstra’s management taking “great care” to ensure that its shareholders were protected in what would be “a very large and very complex transaction”.
“No doubt central to the negotiations is the very high probability that the NBN is never completed,” Turnbull added. “Most people in the industry I talk to are of the view that even if the Labor Party were to stay in Government the crippling costs of the project will cause it to be abandoned, at least in the form it has been announced.”
Turnbull himself has previously confirmed that should the Coalition form government in Canberra at some future data, that it would stop the construction of the NBN, quickly conduct a cost/benefit analysis into the infrastructure rollout and identify those elements in the infrastructure that should be maintained and integrated, “perhaps into the new separated network company”. The Coalition would also examine areas around the nation that had poor broadband coverage and prioritise them.
Last week the Liberal MP added that if partial completion of the NBN was “a real risk”, Telstra would be insisting in the negotiations that the cost of that risk be bourne by the Federal Government. “One suspects that this issue is one of the reasons for the delay,” said Turnbull.
Ultimately the Shadow Communications Minister saw the delay in terms of a contrast with Julia Gillard’s Labor Government.
“Telstra is taking its time to make sure that the deal is properly analysed and documented and in a form which will be of advantage to its shareholders,” he said. “The Government on the other hand paid scant regard to the interests of its shareholders – taxpayers – and rushed headlong into the deal without any proper analysis, let alone any consideration, of whether the objective of universal fast broadband could be achieved at a lower cost.”
Turnbull’s comments come at a critical legislative time for the NBN rollout. This morning, the Senate is slated to start debate on legislation associated with the fibre project, after both bills passed the House of Representatives several weeks ago with only one minor amendment.
Communications Day reported this morning that Greens Communications Spokesperson Scott Ludlam hadn’t yet taken a voting proposition to his party room. The Greens hold the balance of power in the Senate with five senators — and Ludlam is reported to still be concerned about issues such as cherry picking of NBN infrastructure, scope creep and volume discounting for certain telcos.
Image credit: Office of Malcolm Turnbull