Quigley refutes “incorrect, misleading” AFR report


news The chief executive of the National Broadband Network Company this afternoon strongly criticised the Australian Financial Review newspaper for what he said was a “disappointing”, “incorrect and misleading” report that had “wrongly” claimed NBN Co would not recover its costs by its projected date.

The story, published on the AFR’s website last night, was entitled “NBN Co won’t recover costs by 2040, defends pricing”. The article was based on a letter sent by the government broadband company to the Australian Competition and Consumer Commission this week (PDF), in response to the regulator’s request for greater transparency with respect to NBN Co’s price controls and planned revenues.

However, although NBN Co’s letter contained four scenarios under which NBN Co would variously recoup or fail to recoup the cost of its network construction and operation by 2040, the AFR’s report mentioned only one scenario. Under two of the scenarios not mentioned, NBN Co would recoup its costs by 2040, or even earlier. NBN Co is currently projecting that it will require about $30 billion worth of government investment over its life, with another $14 billion to be funded through debt arrangements.

In a statement issued this afternoon, NBN Co chief executive Mike Quigley said that the AFR, Australia’s national daily business newspaper, had “misconstrued the National Broadband Network’s financial forecasts and wrongly reported that NBN Co would not recover its costs by 2040”.

“NBN Co continues to expect that it will pay back to Government the amount spent on the network within the timeframe laid down in the updated Corporate Plan issued in 2012. To suggest otherwise is incorrect and misleading,” said Quigley. “In the Corporate Plan, NBN Co forecast that it would pay back by FY2033 the cash paid out and this forecast has not changed.”
“The Australian Financial Review, in quoting from a letter sent to the Australian Competition and Consumer Commission by NBN Co, had instead referred to the Initial Cost Recovery Account or ICRA, which takes the amount spent by NBN Co and capitalises that amount at a regulated rate agreed with the ACCC.  Under this calculation, revenue received by NBN Co is counted against the ICRA until it is extinguished. However, this does not affect the revenue assumptions that have been made by NBN Co, nor the returns forecast in the Corporate Plan.”
In its letter to the ACCC, NBN Co’s statement pointed out, it had noted a number of scenarios in which the ICRA would be extinguished before FY2039-40. Other scenarios point out earlier timelines to repay ICRA over the long-term timeframe. “The Australian Financial Review however appears to have resorted to an oversimplification by focusing on one scenario only,” NBN Co’s statement said.
“NBN Co appreciates that the regulatory concepts used in its negotiation with the ACCC are complex but it is disappointing that Australia’s daily business newspaper has misrepresented the project’s underlying financial position,” Quigley said. “The project’s financial underpinnings remain robust. NBN Co is on track to deliver a financial return to the Government over the life of the project while providing all Australians access to high-speed broadband services.”

Delimiter has invited the AFR to respond to the issue and will publish any response the AFR issues to Delimiter as a right of reply. So far, the newspaper has not issued a statement about the issue and has not issued a correction to its story.

History of inaccuracy
The news comes as Communications Minister Stephen Conroy — the minister responsible for the NBN project — has repeatedly criticised the AFR over the past year for what he has claimed to be inaccuracies in the newspaper’s reporting of the project. And in a doorstop press conference last week, the Senator continued his attack on the AFR, referring to an article the newspaper had written regarding delays in NBN Co’s fibre rollout caused by contractor Syntheo. “We are on track to meet the corporate plan, no matter how much heavy breathing you or the Financial Review wants to do,” Conroy told an AFR reporter at the event.

In late June last year, in another example, the newspaper published an article stating that there was “a real risk” that the NBN’s fibre infrastructure might be overtaken by technical breakthroughs in areas such as “wireless technology”. “One such breakthrough on the technological horizon is Data In Data Out wireless technology, which promises wireless speeds up to 1000 times faster than those offered today,” the newspaper claimed. However, the notion that wireless could serve as a replacement for fibre or other fixed network technologies is heavily disputed by the global technology community and is a view outside current mainstream thinking on the issue.

The AFR also reported that take-up of the NBN in the areas where it is available so far has been “minuscule”. Unfortunately, this claim is also heavily disputed. In general, Australia-wide, NBN take-up rates have been strong. In fact, in communities such as Willunga in South Australia and Kiama in New South Wales, the take-up rate in the short time the NBN has been active in those areas has been north of 30 percent. This rate is expected to accelerate as Telstra’s competing copper cable is shut down in areas where the NBN has been rolled out, forcing Australians to migrate onto the NBN fibre.

The publication of that article came a day after the AFR published another article on the NBN stating that two key NBN contractors weren’t bidding for the next round of NBN construction deals due to rollout delays in the network. However, after the publication of the article, NBN Co and the contractors publicly denied the AFR’s allegations as “patently untrue”.

Over the past several years, there have been a number of misleading articles published by various other local newspapers about the NBN. In December 2011, the Australian Press Council expressed concern about the Daily Telegraph’s coverage of the Federal Government’s National Broadband Network project, backing a local critic’s complaint that three articles in a short period of time had contained “inaccurate or misleading assertions” about the NBN. Similarly, in March last year, another News Ltd publication, The Australian, published a correction to a story after it inaccurately alleged that a school in South Australia would have to pay $200,000 to connect to the NBN; in fact, the school will receive NBN access as part of the normal rollout.

The National Press Council — which AFR publisher Fairfax is a core member of — includes the following on its list of ‘core principles’ to be followed by journalists working for its members:

“General Principle 1: Accurate, fair and balanced reporting: Publications should take reasonable steps to ensure reports are accurate, fair and balanced. They should not deliberately mislead or misinform readers either by omission or commission.

General Principle 2: Correction of inaccuracy: Where it is established that a serious inaccuracy has been published, a publication should promptly correct the error, giving the correction due prominence.”

It is clear at this point that the AFR has breached both of these general principles with this article, and must publish a correction to its article. It has made a serious allegation — that one of Australia’s largest infrastructure projects will not recoup its costs in the time frame which it has pledged to — and it has done so without sufficient supporting evidence. That seems to me to be the very definition of an occasion on which a correction is required. At the very least, the AFR should print Quigley’s statement this afternoon and give it a degree of prominence.

I don’t have a grudge against the AFR — it’s still the only Australian newspaper which I currently respect, and after all I used to work there as a technology reporter. I retain a great fondness for the masthead and still closely follow some of the journalists there — such as investigative reporter Neil Chenoweth. But in this case it needs to do the right thing. And I would advise it to pull up its socks when it comes to its NBN reporting in general.


  1. One such breakthrough on the technological horizon is Data In Data Out wireless technology, which promises wireless speeds up to 1000 times faster than those offered today

    Is that a direct quote? Because if so the AFR are incapable of a simple Google. It’s distributed, not data.

  2. That code of practice needs to be legislated along with heavy financial penalties as Aussie democracy is currently being errors by a right wing media (news ltd & fairfax) he’ll bent on regime change!

    If for one am very very concerned if this is put a stop too!

    • What they need to legislate is fact from opinion. Most issues with today’s MSM is their “news articles” are actually opinion pieces…

    • The only way you will stop this type of media is to vote Labor at the next election and the NBN will be the final nail in their coffin.

      • The other way is to stop buying their papers when you catch them out more than once.

  3. I feel sorry for Quigley and NBN Co being forced to deal with an ongoing torrent of incorrect articles from Australia’s mainstream media. Its infuriating enough for me just reading about this stuff, so I can’t imagination the frustration of having to allocate media time to set the facts straight once again.

    AFR’s blatantly misleading coverage is bad enough to be featured on Media Watch, but whether its deemed important enough for them cover is another thing (probably not).

    I magine if the AFR even bother writing a retraction, it will be 3 sentences long and buried on page 17.

  4. “it is disappointing that Australia’s daily business newspaper has misrepresented the project’s underlying financial position”

    Is this limited to the NBN only or is it indicative of a shall we say sloppiness rather than intentionally deceptive reporting and opinion in general.

    Potentially disturbing for a National Business and Investment publication

  5. Unfortunately I don’t think Labor have the balls to implement the changes required for the NPC to actually have any real bite (especially in the current environment), and the Libs would just repeal it and “Save Australian Media” by just giving them Australian tax payer money.

    Main Stream Media just don’t get why they are going down the tubes….it’s because their content isn’t worth paying for…now days they’re all just echo chambers for opinion, sprinkled with a few facts that support those opinions, but with any facts that don’t support their view excised.

    It’s all gone downhill since this really: http://www.newyorker.com/reporting/2012/09/24/120924fa_fact_lepore

  6. If their writing is this inaccurate and misleading overall, they should be shut down for gross incompetence. If their writing is only this bad when it comes to detracting the NBN and the Australian Labor Party, they should be investigated and shut down for corruption and deliberately trying to affect the course of democracy through manipulation of the public.

  7. From twitter by the journalist before he realised he put his foot in his mouth

    yep but the 2 scenarios where it does recover ICRA depends on nominal prices rising, or staying flat, with no impact on demand John McDuling

    NBN expects prices to fall in both real and nominal terms John McDuling (@jmcduling)

  8. A factor worthy of consideration.
    The AFR and The Australian have a major influence on business and personal investment decisions due to their past reputations, the current bias, misinformation and deception considering their influence on investors security regardless of reason is a serious issue, how much of what they write can be trusted .
    Alan Kohler wrote an article against MT’s ramblings
    MT’s response
    Which Alan responded to and once again M.T’s response

    Subsequently Business Spectator was bought out and Alan has been silenced.
    Note the major financial publication in the US is in the same hands.

    Dangerous times for the trusting investor

    Remember NBN will be going to the market with NBN Bonds, if these publications set out to falsely destroy the investors confidence in the security of those bonds that is a major issue.
    It may be prudent for the SEC to start having a closer look at the antics of these cowboys.

    It is about perceptions and confidence

    • Actually I agree with you Abel. I think ASIC should get involved. Organisations that intentionally mislead the Australian public for the purpose of market manipulation should be investigated.

  9. Y-a-w-n.

    The is Schroedinger’s Cat stuff.

    You can’t say a business forecast is is right or wrong or good or bad or true or false until the box is opened.

    The business plan NBNCo wrote that is what it and the ALP want to happen, and it cost us taxpayers $12M to get an accounting form to sign off on, is based on a huge number of assumptions. Its just a forecast. Anyone saying that that’s what will happen, and getting upset and say they’re lying when someone else says something else might happen instead, really needs to get a life.

    Look at the way the fanboys of the NBN, whenever someone points to how poor the overall takeup rate is at about 14% – about 1/5th of what it will take to pay for itself – they loudly point at the couple of areas where is half decent, repeat half decent, and say, no no no, don’t look at where its bad, look at where’s its unusually good. Gees, talk about refusing to accept reality when its staring them in the face. And I mean reality as in real measureable facts, not just forecasts.

    • “Anyone saying that that’s what will happen, and getting upset and say they’re lying when someone else says something else might happen instead, really needs to get a life.”

      Actually it is the NBN who presented multiple possibilities, and the AFR who took only one version and stated it as fact.

      “Look at the way the fanboys of the NBN, whenever someone points to how poor the overall takeup rate is at about 14% – about 1/5th of what it will take to pay for itself”

      You do understand that everyone is being cut over, right?

      It is strange that you can have things so backwards yet be so condescending.

    • “Look at the way the fanboys of the NBN, whenever someone points to how poor the overall takeup rate is at about 14% – about 1/5th of what it will take to pay for itself…”

      Your ability to comprehend is disturbingly low.

    • “Y-a-w-n.
      The is Schroedinger’s Cat stuff.
      You can’t say a business forecast is is right or wrong or good or bad or true or false until the box is opened.”

      The AFR’s problem is that they declared the Cat was dead without opening the box.

    • “Gees, talk about refusing to accept reality when its staring them in the face. ”


      “And I mean reality as in real measureable facts, not just forecasts.”

      but I doubt you understand anything about reality considering you believe “the majority of people who are quite well served by 8 or 6 or even the 2-3 Mb/s”. Sad thing is that is just one among many of laughable statements in your ill-informed diatribes… time to hibernate again gordon!

    • Hmm hard to tell inflection from print. 17 hours to respond to ‘request for comment’. I ask two things; Was that request before or after the original story? and is that intended to be a positive negative or neutral comment? 17 hours is acceptable to me tho what finrev thinks acceptable I don’t know. In any case I’ve certainly heard of worse – no response whatsoever is more common than one would like.

      It does bring on board the rest of the info but there is no admission they already knew the other options and left them out, just a bald restatement of the situation. Looks like they went with the absolute minimum necessary and left it at that. Given its couched as a he said piece with virtually no comment I certainly don’t feel the finrev are making any different conclusion than in the first piece… They would have said otherwise? Comment by omission in other words. Am I the only one feeling the response piece like that?

    • That is much more than I expected from the media in this country so I would not complain to hard it seems to be balanced.

  10. Data In Data Out refers to quantum entanglement of atoms for secure communications. I think the highest data rate so far for quantum transmission of data has been measured in bits per second.
    Fast enough to transmit a key for an encrytoion sysem but not much else.

    I think you are refering to Distributed In Distrubuted Out which is a beam forming technology championed by Mr Perlman

    In practice it suffers from a few problems.
    The number of bases needs to be of the same order (at least) as the number of connected users because it must send a slightly different signal to each base so that the wave forms add together only for the mobile they were meant for.
    Computational power also seems to go up exponentially with the number of connected users.
    It does not do anything for the uplink, the mobile not having the advantage of dozens of geographically distributed antennas or a supercomputer to generate the waveforms if it did.

    Oh, and it certainly does NOT break Shannon’s Law. By improving the quality of the signal, it improves the data capacity of the channel in accordance with Shannons Law.
    Of course it goes nowhere near the channel quality of a fiber which can already transmit data, right now, at billions of times the data rate “promised” by DIDO, decades from now.

    A quote from the whitepaper “So far, as we’ve increased the number of simultaneous users in the same area to 10”

    Read about it yorself:

  11. Take-up is irrelevant, when the copper is pulled out it will be near 100%. Low latency wireless is near useless for most net users, it’s just an email and browsing format and it’s extremely expensive as is mobile telephony.
    Take-up is dependent on ISP renewal contracts it could take near 12 mounts for contracts to evaporate.
    Pinning ones hopes on speculated technology is a bit like deciding to build no new roads because Jetson cars will be available in 10 years.

  12. NBNCo is claiming inaccuracy based on its own forecasts. Its own forecasts have proven grossly inaccurate to date, so it seems illogical to rely on them as an argument on claims they aren’t going to make their targets.

    • I don’t think they are claiming inaccuracy based on their own forecast. They are rightfully claiming that taking one scenario they have presented out of many is misleading.

      Their forecasts have been astonishingly accurate, given the stages of the project at which they have been made.

      NBN detractors are quick to trot out the line that the NBN was planned on the back of a napkin (as though that is a meaningful criticism) and then also try to hold any projected numbers from that time as though they should be gospel. Why should napkin-numbers be correct? One criticism renders the other redundant.

      Will there be further adjustments to targets? I don’t doubt it. Either a simple look at history, or a simple understanding of logistics, will show how likely this is.

  13. I used to laugh at the US FOX news….

    now i’m just sad, as it seems that we are the same here.

  14. Oh, by the way Renai: excellent and correct use of the word “refute” in the headline!

    Often used simply to mean “reject” or “deny”, you of course mean its correct (and far stronger) meaning of “disprove by argument and facts”. You know, those things.

  15. Seriously, the AFR won’t either correct or clarify its story – and the National Press Council will do its standard thing – nothing. It is funded and controlled by the press, and totally lacks any spine.

    • What is the Press Council supposed to do? The AFR article didn’t lie.

      The AFR article definitely had a “focus”, but it didn’t mislead except through a reader lacking their own critical thinking skills. It actually stated, plain as day, that there were multiple scenarios examined and some showed NBNCo paying its money back by 2040, while others did not. They just dwelled on the latter.

      It seemed like sloppy journalism to me, but not inherently inaccurate. You can only regulate so much. I’m just getting a bit sick of people screaming lies whenever a piece in a newspaper doesn’t conform to their worldview. If the article was “NBN confirmed on track to recover costs by 2033” it would be even more misleading, it would be truly awful journalism in fact. But do you think Delimiter readers would be complaining?

      • “NBN Co won’t recover costs by 2040, defends pricing”. That is a lie in the headline. The rest of the story deliberately conveyed to the reader a falsehood.

        Sorry, what’s your definition of lying?

      • “The AFR article didn’t lie.”

        technically no, but they only showed one quarter of the actual truth – thats commonly referred to as a lie by omission.

        balanced reporting means informing your readers about the other 3 scenarios, not hiding that information from them because they dont help your story.

      • I guess having flexible honesty yourself would be required to agree with the Coalitions and MSM’s flexible honesty in pushing their agenda. It’s a facinating look into the minds of LNP Zealotry.

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