Standing Committee on Infrastructure and Communications; Statements by Members

I am pleased to rise to speak briefly about the House Standing Committee on Infrastructure and Communications, following the remarks of the chair.

I would like to speak in a little more detail about the inquiry which is presently underway in relation to the National Broadband Network. The terms of reference for this inquiry essentially ask us to investigate the things that the National Broadband Network might facilitate, under such headings as ‘education’, ‘health’, ‘economic development’ and so on.

There is also a term slipped in at the very end which asks the question: what is the optimal technology for the National Broadband Network? This is clearly an important question.

An equally important question to ask, when you are considering the benefits that might follow from the construction of a network and when you are considering the things that the network is going to be assisting you to deliver, is: what is the cost of the network, and what is the cost of the particular mode of construction that has been chosen? Unfortunately, this has not been included in the terms of reference. In my view that is a missed opportunity as a committee of the parliament is looking at the National Broadband Network. It is a missed opportunity to ask: what is the cost of this network we are building, and how is that cost to be weighed up against the benefits?

The principle of using cost-benefit analysis to determine which areas the Commonwealth ought to invest in, where the finite funds of taxpayers ought to be allocated, is an important principle. It is a principle to which the Rudd-Gillard government is apparently committed. Their stated principle for Infrastructure Australia is that it will use the methodology of cost-benefit analyses. So it is unfortunate indeed that this government has explicitly failed to conduct a cost-benefit analysis for what we are constantly told is the largest infrastructure project in Australia’s history and it is a matter for particular regret that this committee, which would have offered an opportunity to pursue this approach, has not been given a term of reference to conduct a cost-benefit analysis.

Nevertheless, there are important questions this committee can ask. As people from all walks of life and from many different backgrounds come before the committee and talk about broadband and the uses to which they propose to put it, this committee offers an important opportunity to ask: what precisely are the applications which are to be delivered over this network and what precisely is the speed that is required? That is a very important public policy question because when you are thinking about building a telecommunications network you have many choices. You can build a fibre-to-the-home network, as this government proposes, which costs approximately $5,000 per premise. That is how we end up with the overall taxpayer commitment approaching $50 billion, which is now contemplated. There are alternative and less expensive approaches; for example, this government’s previous policy—until it was abruptly changed in April 2009—was to build a fibre-to-the-node network which would have involved public expenditure of vastly less, $4.7 billion.

A fibre-to-the-node network can deliver speeds reliably of 30 to 40 megabits per second depending upon exactly which design configuration you propose. The previous government policy was to achieve a uniform 12-megabits per second with fibre-to-the-node. You might well say that was an appropriate balance. This is a question which ought to properly be tested by weighing up the cost versus the benefits. We have heard very interesting evidence about, for example, distance education and distance learning applications. Those are obviously important and beneficial but the important question is this: do you need 100-megabits per second? Could you achieve very substantial benefits by having ubiquitous but lower speeds of, for example, 12-megabits per second?

Let there be no doubt that we on this side of the House are strongly committed to the notion of upgrading Australia’s broadband infrastructure. We are also strongly committed to the notion of reforming the telecommunications sector to deal with the problem of poor competition in the fixed line sector due to Telstra’s historical vertical integration. But we do think there are exceptionally important questions to be asked, which are: what is the most efficient and cost-effective way to do this and what is the proper role for the private sector as balanced with the public sector? It is unfortunate that those issues can not be fully canvassed through this inquiry.