SUBJECT: Malcolm Turnbull’s NBN mess
GREG JENNETT: Michelle Rowland, we know where the NBN is now and it looks like a pretty bleak picture, technically and financially. What's your interpretation of it as an economic entity? Is it in sound shape?
MICHELLE ROWLAND, SHADOW MINISTER FOR COMMUNICATIONS: Well from the comments we've had from Bill Morrow, also from Malcolm Turnbull even today, it seems like the NBN economics are in a bigger state of chaos than everyone thought. But I think coming out of all this Greg, you talk about the economics of it and the technical side, the thing that really should matter the most to this government is the consumer experience and they're simply being left behind.
JENNETT: We might be in a situation where Labor is in government in 2019. If we look at the remedies, and a lot of money is being tipped into this already, what would you do if the technicals weren't fixed then and if you were advised on taking office another $5 or $6 billion is required?
ROWLAND: Greg, these are very difficult decisions that an incoming government would have to make and I can assure your viewers that we will be informed by what is best for the consumer, we will be informed by the notion, which is very sound, that we need to fix the digital divide that still exists in Australia.
JENNETT: So that means more fibre in the network, I think, is Labor's plan?
ROWLAND: We have always favoured fibre over copper because it is a superior technology and it is one that takes us into the 21st century and beyond. And, in fact, we've been calling, since the beginning of this year, for the government, if it wasn't going to take fibre to the premises, to at least look at taking fibre as deep as possible into the network being fibre to the kerb, one that NBNCo seems to have taken up and re-announced a few times now.
JENNETT: And in pushing that, and you're right, they are actually acting on it already, do you have any estimate of what would be required. Is it in the billions of dollars if you were to push this to the kerb in 2019.
ROWLAND: Well Greg, we try and find out what information we can from things like the Senate Estimates processes. We bear in mind always that we need to try and make this the best consumer experience possible, but again these are issues in which Labor would need to be informed by the realities on the ground at the next election, whenever that may be.
JENNETT: Now as you say, it is the customer experience and the technicals that most people seem frustrated about at the moment. There is a Bill before the parliament currently which would make NBNCo responsible in a legislative sense for that bare minimum 25Mbps. Even if that law is passed, what happens? What does it look like for NBN if that becomes law?
ROWLAND: Well, that's a very good point because on one hand it is the retailer that has that contractual relationship and I think you would need to look at what sort of service levels the infrastructure provider, the NBNCo, is actually providing to those retailers. There are issues that I think the government has ignored and they simply try and keep blaming the retailers and hence consumers get caught up getting bounced between their retailer and NBNCo, which leads to dissatisfaction all round.
JENNETT: Do you have any ideas about that nexus, that relationship between NBNCo and the responsibility of the retailers. How might that be tidied up, with or without laws, how can it be done?
ROWLAND: For example, if you take the existing Customer Service Guarantee which applies to voice services, you have a requirement to connect people within a certain period of time, to remedy faults within a certain period of time and there are things that need to be done at the back end to make that happen. And it's certainly not something that's not feasible to be able to have similar being applied to NBNCo. And I'm not the only one suggesting this. I see ACCAN in the last couple of days, the peak consumer body, has come out and said the same in response to those high levels of TIO complaints.
JENNETT: So you would advocate a regime like the universal service guarantee to be overlayed now on broadband services?
ROWLAND: Well, I think something needs to be done to ensure there is a minimum standard of service that retailers receive that they can then back-end onto their customers because whatever we have at the moment Greg, it’s simply not working.
JENNETT: And that responsibility under this proposal, if were calling it a proposal, would rest with the retailers, not with NBNCo?
ROWLAND: Well, the retailers would need to, and be capable of, matching what they are given by NBNCo and this is a suggestion, as I said, that's been around in industry for some time. We haven't seen the government actually come out and articulate what sort of plan they have in that area but it’s certainly one that consumers have been calling for.
JENNETT: And likely to be Labor policy running into the next election?
ROWLAND: We're working through our policies and, as you'll be aware, we had the Joint Standing Committee Report on the NBN recently that had over 20 recommendations which Labor articulated in that case and we are very keen to see those enacted
JENNETT: And just back where we started on the financials, obviously if this was a robust and viable technical operation, a government in the future may seek to sell it or to reap the returns from its investment. Yet we heard the Prime Minister say today that the return on investment will never reach anything like 6 per cent, perhaps struggle to get to 3 per cent. So, what do you do with an asset that just doesn't deliver on itself?
ROWLAND: Well, it won’t deliver on itself because this is a dud model. That is the reason. We actually have in legislation the contemplation for the NBN to be sold at a future point in time but all the modelling on that, Greg, was done on the basis of it being a fibre-based model, one that consumers would want to use, one that people had confidence in and one in which people would demand bigger speeds because they knew that the network would be capable of delivering it. We have a situation where we had that horrible rate of return because of Malcolm Turnbull. This is his own doing.
JENNETT: You also had, according the figures they've released in the last 24 hours, premises being connected at $91,000 per premise. What's the explanation for that?
ROWLAND: Well, I won’t take lectures from Malcolm Turnbull on issues of copper versus fibre. This is a government that is spending $177 million on new copper, over $600 million on remediating copper, that's some $800 million and counting on copper. And we know that over time the costs of fibre deployment around the world have close to halved. And we know also that under Malcolm Turnbull's watch as Communications Minister, NBNCo was doing its own trials to bring down the costs and bring down the time in which fibre could be rolled out. So, I won’t take any lectures from these people on how to build a dud network because they are the masters in it.