'Inadequate' NBN docs a sop: Turnbull
The short summary of the National Broadband Network Company's business case (PDF) has not impressed Shadow Communications Minister Malcolm Turnbull, labelling it "inadequate".
"Beyond a few scraps of information and other warm words this is a thoroughly inadequate document," he said. "It does not include any financial statements at all — no profit and loss statement, no cashflow statements, no balance sheets. There are a few numbers."
He noted that by paying $13.8 billion to Telstra, the capital expenditure will only be reduced from $37.4 billion to $35.7 billion.
"And yet the Telstra deal is stated to be a real positive for the NBN. Presumably it results in much lower net operating losses the savings of which justify the $13.8 billion spent. But how can we know without seeing the financial details?" he said.
He said the document was just a sop thrown to the independent Senators in the hope that those Senators would vote for the telco reform Bill.
"Real accountability, real transparency requires a thorough and complete business case, not 36 pages of reassurance devoid of financial detail."
The worst omission of the document was that it didn't address whether the network was the most cost-effective means of bringing universal affordable broadband to Australians, according to Turnbull.
"The NBN is ... one way of getting there. But there will be others and surely none could be more expensive than this plan."
Turnbull also expressed some skepticism about prices dropping over time for access to the network.
"This document says that the NBN anticipates being able to reduce real prices for all products except the basic service offering of 12Mbps down and 1Mbps up," he said. "Since that is the product which experience suggests the majority of households will take up, it seems the NBN is not going to offer cheaper Internet at all and, at least on the basis of this document, has left itself room to increase the cost of the basic service."
He also drew attention to the fact that the document considered the project to be risky because it required a weighted average cost of capital of 25 per cent until the concept is proved over the next three or four years, with that number reducing to an average of 10 to 11 per cent over 30 years.
"They are determined to avoid any scrutiny for fear that the answer they will get will be that this is yet another ill considered, wasteful white elephant," he concluded.