news Communications Minister Mitch Fifield has refused to answer a direct question from a journalist about why the cost of remediating Telstra’s copper network has blown out by a factor of ten times to $641 million, saying that leaked internal NBN documents showing the figures had been “inappropriately obtained”.
On Sky News yesterday, Sky host David Lipson pointed out to Senator Fifield that in December 2013, then-Communications Minister Malcolm Turnbull had said the cost to repair Telstra’s copper network so it could be used for the National Broadband Network would be around $55 million.
“A document has been leaked in the past week or so from the NBN that reveals it’s now blown out to some $640 million. Why is that and is that document correct?” asked Lipson. The full transcript of the interview is available online on Fifield’s ministerial website.
In his answer, Fifield did not directly answer Lipson’s question about why the blowout had occurred, and whether the document was correct.
The Minister acknowledged that several documents had recently leaked from the NBN company, stating that the documents had been “inappropriately obtained” and “cited selectively”.
“David the important point here is the NBN corporate plan which was released in August, updates NBN costs. It provides a range for peak funding of the NBN from $46 to $56 billion with a base case, or likely scenario, of $49 billion,” Fifield said. “Now those numbers take into account every bit of information, every bit of analysis that NBN has.”
“So the documents which have been leaked, there’s nothing in any of those documents that has not been taken into account by the corporate plan in August.”
Fifield also attempted to address the leak of a similar document several weeks ago which had appeared to show that the HFC cable network the NBN company bought from Optus for $800 million was not suitable for use as part of the NBN.
“I’ve also just got to quickly nail a few other falsehoods which have been put forward by Jason Clare,” said Fifield, referring to the Shadow Communications Minister.
“And they are that this Government paid $800 million to Optus for an HFC network that was not up to scratch. That is not the case, it’s actually the previous government that paid $800 million to Optus to shut down the HFC network. What Malcolm Turnbull said to Optus was ‘How about this, I don’t give you a single extra dollar but you let NBN access the HFC network’.”
“So it’s a complete and absolute falsehood that has been perpetrated and put forward by Jason Clare.”
However, Fifield’s statement appears to lack relevant context.
It is true that the previous Labor Government was to pay $800 million to Optus to shut down its HFC cable network. However, this move was taken to ensure the NBN company could quickly move Optus customers onto the new, technically superior Fibre to the Premises network the company was building to replace Optus’ infrastructure. This would help boost the NBN company’s early revenues.
Many industry commentators have historically viewed — and still view — HFC cable infrastructure as legacy and not worth upgrading, although others disagree. It is for this reason that the previous Labor Government was planning to replace the HFC cable and copper networks owned by Telstra and Optus. This would also have the net effect of structurally separating Telstra from its infrastructure and creating a level playing field for the rest of the industry.
Fifield also ignored a further question from Lipson. The Sky News host asked: “Is, though the cost of fibre to the premises coming down and will it continue to come down over time?”
“Well the NBN have a mandate to choose whatever technology will see the NBN rolled out fastest and at lowest cost,” Fifield responded. “It’s called the Multi-Technology-Mix approach. It’s a technology agnostic approach. That is what the NBN is doing. But there’s no doubt, there is no doubt, that the approach that the NBN is taking is significantly less expensive than a full fibre alternative. I’ll say again $30 billion extra cost. 6-8 years sooner. That’s $30 billion extra cost to go full fibre. And we’re going to be doing it 6-8 years sooner.”
Normally we see more sophisticated performances from Senator Fifield with regard to the NBN — I feel he has gotten a little lazy here. It’s not good form to completely ignore legitimate questions on national television about the National Broadband Network. Fifield really did not answer the questions that Lipson was asking.
Image credit: Parliamentary Broadcasting