27 August 2014



SUBJECT/S: NBN Cost-Benefit Analysis

GRAEME DAY: G’day Michelle, how are you going?


DAY: Good, now Malcolm Turnbull has come out with this this morning, I’d imagine that you guys aren’t too happy with some of it.

ROWLAND: Well there’s a $2 million cost-benefit analysis that’s been handed down today, commissioned by Malcolm Turnbull which he asserts is independent, but has actually been written by former staff and former advisors to him which – surprise, surprise – concludes that Malcolm Turnbull is correct.

DAY: Is that the major thrust of what you’re trying to get at today as far as the media is concerned, that basically it was done by “the boys”?

ROWLAND: It’s an important point to make, but there are two other very important things that I think all residents in the Shoalhaven should be concerned about. The first is that the broadband network rollout is actually proceeding slower under Malcolm Turnbull than it was at this time last year. Now he’s commissioned a number of reports, the latest one costing $2 million, he spent some $12 million in consultancy fees in less than 12 months, so people should rightly be asking “when are we going to get our NBN?”

The second issue that I think everyone should be concerned about in the Shoalhaven and the surrounds is that this is not a good sign for rural and regional areas. In fact, this report concludes that the optimum result would be for the government to do nothing, to essentially leave broadband and leave people who would like to have accessible and affordable broadband – which is most people – leave that to the mercy of the market.

Now, we know that in the 12 years that preceded Labor coming to power in 2007, the market had clearly failed. We weren’t getting accessible and affordable broadband in these areas and that’s what the NBN was designed to fix.

DAY: Essentially what you’re saying is that with this report that’s come out that they’re looking at those multi-populated areas and the rest can basically wait until they’ve got the money or they decide to do something about it. But I suppose looking at it realistically, there were a lot of hiccups with your Government in regard to costings, in regard to planning and in regard to rolling it out. You’ve got to take that on board otherwise the Australia public will go “hang on, you can’t really have a shot here when you guys made a few errors yourself.”

ROWLAND: Graeme the first thing to point out was that when we were in government and we proceeded with this scheme, we undertook a very close and a very independent analysis by KPMG, a truly independent report. Now I think you need to remember too, Graeme, the scale of the problem: we had issues where we had people not only in rural and regional areas living on dial-up, being forced to essentially have the worst form of internet access. You wouldn’t even call it broadband access.

But we had 12 years of absolute stagnation under John Howard and close to 20 failed broadband plans. That is what we needed to fix. We asked the private sector: “will you participate?” Telstra refused to come to the table and so the only option was for the government to step in.

I think your listeners need to realise and to remember the magnitude of the problem that this was absolutely designed to fix.

DAY: It’s come out this morning saying that Australia’s going to be $16 billion better off. Politicians tend to talk about the money, but as you’ve illustrated they don’t talk about the service so much. Can you see that if these savings are implemented through this report that has been done, can you see areas like Bowral, Moss Vale, the Southern Highlands, Goulburn, those areas having to wait decades for any kind of improvement in communications?

ROWLAND: I think that could absolutely be the case actually, Graeme, and the one thing also that I’ll point out under this multi-technology mix that Malcolm Turnbull calls it – so essentially relying on the outdated copper network and a mishmash of different technologies – we have no indication in this report of how the issue of wholesale pricing equivalence is going to work. Now that’s important for this reason: it means that it doesn’t matter where you live in Australia, the wholesale price of the NBN services are the same.

So this was absolutely designed to get rid of that digital divide, it meant that service providers could go into regions such as Bowral, such as the Shoalhaven, and offer value for money for customers. Now we have no indication in this report what it is going to mean for consumers in those areas, and yet again I think this points to a government which sees the cost of everything and the value of nothing.

DAY: Okay, thanks for your comments. It’s going to be interesting to work out just where the public aligns on this, but all I know is that there is a much needed improvement as far as communications are concerned here in the Southern Highlands, particularly in the outlying areas and even more in regional and country areas. I’m sure that your mob will be onto it like that.

ROWLAND: Too right Graeme.

DAY: Alright thank you.

ROWLAND: Cheers.