NBN Co enters caretaker mode

NBN Co will not sign any significant contracts or get its new CEO before the September 7 Australian election.

As the incumbent Labor government and the Coalition opposition prepare for a showdown over their differing broadband policies, NBN Co's hunt to replace outgoing CEO Mike Quigley will not be completed until after the September 7 federal election, with the Australian government entering caretaker mode later today.

After Prime Minister Kevin Rudd yesterday called the election for the first Saturday in September, the House of Representatives is expected to be dissolved later today, commencing the caretaker government period (PDF) where departments and government agencies are able to continue doing work, but do not take on major tasks that would bind any future government from being able to change that action.

This includes making significant appointments and major contracts, and would capture the government-owned company rolling out Australia's AU$37.4 billion fibre-to-the-premises National Broadband Network (NBN).

On what appointments would be considered "significant", the Department of Prime Minister and Cabinet's guide states that the "agency should consider not only the importance of the position, but also whether the proposed appointment would be likely to be controversial".

Major contracts are determined based on the dollar value (although that itself is not specified in the guide), and whether the contract "implements or entrenches a policy, program, or administrative structure which is politically contentious".

After Quigley last month announced his intention to resign, NBN Co's board has been on the hunt for a new CEO, and the government previously indicated that Quigley could be replaced before the election. NBN Co today, however, confirmed that it would follow caretaker conventions. Given that Shadow Communications Minister Malcolm Turnbull has ideas for who he would like to see appointed to the role of CEO of NBN Co, and the controversial history he has had with its outgoing CEO , the board would not be able to appoint his successor until the next government has been elected.

Although the company had also undertaken renegotiations for construction of the network, with several contracts due for renewal soon, NBN Co will also be unlikely to sign off on any new construction contracts, given the Coalition would seek to change the NBN rollout from a majority of premises covered by a fibre-to-the-premises network to being covered by a fibre-to-the-node network. Any major construction contracts signed now could potentially limit a Coalition government from being able to alter the rollout in the immediate future.

The construction of the network itself will continue during the election campaign.

ZDNet understands that the Coalition has not yet made any formal requests to NBN Co around its activity prior to the election.

Quigley came under fire prior to the 2010 election for using the Charles Todd Oration to denounce opposition claims about the NBN and criticise the opposition's policy at the time.

"Far from being a 'white elephant', the NBN can provide an acceptable return for the government," he said at the time. "Taxpayers will get their AU$27 billion investment back with interest, and they will get a network they can use for decades. This is, I believe, a much better option for the Australian public than giving billions of dollars of taxpayer funding to subsidise commercial companies to marginally improve today's broadband networks."

Liberal MP Paul Fletcher said at the time that the speech was "unquestionably partisan" and in clear breach of caretaker provisions. NBN Co defended the speech, stating that the address had been arranged prior to the election being called, and Quigley was explaining the rationale behind the objectives of the NBN.