update Communications Minister Senator Stephen Conroy has today slammed a research report released by the Economist Intelligence Unit criticising the roll-out and design of the National Broadband Network (NBN), labelling it as right-wing dogma.
Conroy laughed off the report when asked about it by journalists in Canberra this morning, saying that he hoped not everyone had paid money for the full report.
"It starts off with a serious factual error and then descends into what can only be described as ideological dogma, which is public sector investment is bad and private sector investment is good. That's just right-wing dogma," Conroy said.
The report, released earlier this week, claimed that Australia's broadband plan will cost 24 times more than South Korea's to deliver services at one-tenth the speed.
Conroy proceeded to slam the research methodology behind the report, saying that the Economist Intelligence Unit hadn't read the National Broadband Network Company's (NBN Co) business case released in December, nor had it considered the fact that the NBN is set to be ramped up to gigabit offerings.
"Fortunately, their research failed to notice we're delivering a [gigabit] network, which is exactly the same as the South Korean's, so it's factually wrong in its opening statement and it all goes downhill from there.
"It is a ranking system that says public investment is bad. You get zero marks for public investment and you get 10 out of 10 for private investment, so surprisingly, Australia ranks poorly in that sense, given that this is a public investment," Conroy said.
"It ignores the fact that it gets a commercial return and ignores the fact that we will privatise it down the track," he added.
Conroy also said that the report compares South Korea's population spread with Australia's in an erroneous fashion.
"[Economics Intelligence Unit] also compared … things such as size, population, density. I mean I've been to South Korea, they all live in very tall buildings, trying to compare the roll-out in South Korea with the roll-out in Australia is fraught with challenges and they've failed most of them," the minister said.
The unit has hit back at Conroy's remarks, saying that its business intelligence is wholly impartial and that the study wasn't just a comparison between Australia and South Korea. Instead it reviewed more than 30 countries, and ranked 16 of them on a consistent set of criteria for government broadband planning.
Data was based on officially-released government plans containing targets for speed, roll-out, cost and coverage the unit said, pointing out the NBN Co's own corporate plan stated as an objective that it would provide 100Mbps to homes.
Conroy used the Canberra press conference to welcome Telstra and NBN Co's agreement on commercial terms for the telco's aid in the roll-out of the NBN.
Telstra and the National Broadband Network Company had signed a heads of agreement in June last year, which laid out that Telstra would move its customers onto the network and lease portions of its infrastructure to the government company.
Today Telstra CEO David Thodey said that negotiations with NBN Co over the $9 billion portion of the deal regarding the leasing of its ducts and the decommissioning of its copper network were nearing completion.
"We are making good progress and working towards the finalisation," Thodey said.
Thodey said the telco had reached an in-principle agreement with the Federal Government over its $2 billion portion of the deal to move customers over from the Telstra network onto the NBN but said it would still be months before the details of the deal could be made public.
"This is an enormous amount of negotiation," he said.
Telstra must wait for the passing of NBN legislation currently being debated in parliament and finalise agreements with the Australian Competition and Consumer Commission. Once all this has passed, Thodey said the company would need to get an independent assessment of the deal before it could be presented to shareholders.
Thodey was optimistic of the deal being voted on at 1 July, despite admitting it was "ambitious".
Conroy said that the announcement was a milestone in the NBN's progress to completion.
"Today's announcement represents a big step towards bringing affordable high-speed broadband to every home, school, hospital and business in Australia no matter where they are located," he said.
The government and Telstra have also reached in-principle agreement for a package of measures announced by the government in June.
The measures include a public information campaign about the migration of services from the copper-based network to the NBN.
It also provides $100 million to retrain Telstra's workforce to deploy the NBN.
The government will provide annual initial funding injections of $50 million in 2012/13 and 2013/14, increasing to $100 million thereafter.
"This is a significant contribution given that the costs of delivering the universal service outcomes has until now been solely met by the industry," Conroy said.
"The long-term arrangements provide certainty for customers."
Conroy also pointed out that there were still some steps to take, but the government, Telstra and NBN Co were working constructively together to finalise the detailed commercial documentation.
"I expect this to be completed shortly," he said.
Updated at 1:16pm, 11 February 2011: comment added from the Economics Intelligence Unit.