The Government has announced it will release the National Broadband Network implementation study before the Federal Budget in May, following weeks of criticism from the Opposition which repeatedly called for the report to be released to Parliament.
The decision comes as Communications Minister Stephen Conroy also announced Commonwealth Bank director Harrison Young would take on a role as co-chairperson of the NBN Company.
Conroy previously said he had no timeline for releasing the report, which has been compiled by McKinsey and KPMG and cost several million dollars.
The 500-page report is expected to reveal the details of constructing and funding the NBN, but Conroy also claims it will lay out a plan for building the project without Telstra’s assistance.
However, several industry analysts and groups have said the project will demonstrate enormous challenges without Telstra’s assistance.
This has been the main point of debate between Conroy and Opposition senators, who have said they will not pass legislation dictating the split of Telstra’s retail and wholesale networks unless they can view the report.
While Conroy has responded to this criticism by saying the report is long, detailed and requires significant review, the Opposition, the Greens, independent senator Nick Xenophon and Family First senator Steve Fielding have all called for the report to be tabled before Parliamentary debate can occur.
This has caused the telco reform bill to be pushed into the next Parliamentary session to begin after the May Budget.
The report poses a significant problem for the Government, however. While negotiations with Telstra are still ongoing, many believe a deal will not be made with the company saying there is a “significant gap” over what it and the Government believes its infrastructure is worth.
Telstra executives are also reportedly growing tired of the negotiations, with the company’s share price down about 10% for the previous 12 months.
Additionally, if the implementation study persuades Opposition senators to vote against the telco reform legislation, the Government could find itself building the NBN without Telstra’s assistance.
Telstra’s copper network has been cited as a possible competitive threat to the National Broadband Network.
Last year, an Australian National Audit Office report into the original NBN tender process cited Department of Communications analysis that found “although a (fibre) network could co-exist with copper-based broadband networks, the amount of government assistance on offer meant it was unlikely to be commercially viable for reasons that included its ability to attract enough customers to cover its costs and that it would still require access to Telstra’s customer access network”.
However, Conroy is confident of pushing forward. “No question, and I’ve said this many, many times, that it would be faster to build and cheaper to build if there is an agreement with Telstra,” he told The Australian.
“(But) I think when you see the business case in the lead advisers’ report (in the study) a lot of the commentary which has been wildly inaccurate – and I mean wildly inaccurate – will be put to bed.”
Conroy’s office was contacted for comment, but no reply was received before publication.
Meanwhile, yesterday Conroy named Young as co-chairman of the NBN Company. Young has previously served as chairman of Morgan Stanley Australia, and currently serves as a director for Commonwealth Bank.
He is also chairman of Asialink and of the Asia Society AustralAsia Centre, two appointments analysts believe could be handy in the NBN Co.’s mission for funding within the Asia-Pacific region.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
