[LINK] NBN costs & returns
stephen at melbpc.org.au
stephen at melbpc.org.au
Mon Nov 22 00:47:25 EST 2010
Cost of broadband network much less than $43b, says executive Lenore
Taylor NATIONAL AFFAIRS CORRESPONDENT November 20, 2010
THE national broadband network will cost "substantially" less to build
than the $43 billion originally estimated, and the amount it charges for
high-speed internet will reduce over time, the chief executive of NBN Co,
Mike Quigley, has revealed as part of the government's pitch to convince
senators Nick Xenophon and Steven Fielding to pass critical legislation
without seeing the company's business plan.
Senator Xenophon said the government's refusal to release the plan, which
it has already received, was "pissing off" the senators whose votes it
Late yesterday the government released a letter from Mr Quigley
explaining why the business plan could not be provided before Parliament
rises on Thursday, and outlining what the senators will be told in
private briefings with the government next week.
Mr Quigley said a crucial November 30 decision from the Australian
Competition and Consumer Commission about where internet retailers
can "plug in" to the network - and government decisions that would be
based on that finding - would have a big impact on the business plan.
"Highly sensitive and commercial in-confidence" information in the plan
would be of "commercial significance" to large purchases that NBN Co was
negotiating, he said.
But he has outlined "general points" from the business plan in the letter
to the Communications Minister, Stephen Conroy, and the Finance Minister,
He said the network could be built for an amount "substantially below"
the $43 billion assumed in the implementation study, mainly because the
government had done a deal with Telstra to roll the company's existing
infrastructure into the network.
The business plan "projects that prices will be reduced over time" and
that the price for NBN Co's "basic offering" will be "attractive in the
Australian broadband market place", he said.
But Mr Quigley said that despite the deal with Telstra, the amount
required from government would be about the same as the $26 billion
already predicted, and he suggested NBN Co would provide a rate of return
similar to the 6 or 7 per cent predicted in the implementation study.
If the Senate does not pass legislation in the coming week separating
Telstra's wholesale and retail operations - a big step towards creating
the network - Telstra and the government will not be able to finalise
their $11 billion deal.
The Coalition has accused the government of hiding critical information
about the network and because of the delay in releasing the business
plan, the crossbench senators are reconsidering a Coalition attempt to
refer the whole project to the Productivity Commission.
The Prime Minister, Julia Gillard, said the plan would be released in
December, after the government sees the ACCC decision.
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