Coalition moves to block NBN with private members bill, demands cost-benefit analysis

The coalition has introduced a private members’ bell into Parliament calling for the National Broadband Network to be scrutinised by the Productivity Commission, which would produce a cost-benefit analysis and a committee to oversee the rollout of the network.

The move comes as the Future Fund confirms it has continued to offload shares in Telstra, with its holding in the company now at 10%, down from 10.9%.

Turnbull announced the bill yesterday, saying the Coalition Joint Party Room had agreed on support for the bill – the National Broadband Network Financial Transparency Bill 2010. Turnbull says the legislation will, “bring the Government to account over its $43 billion NBN project”.

The bill calls for a number of measures, including the creation of a 10-year business plan, which would include “key financial and operational indicators”. A separate comprehensive cost-benefits analysts would be required to be made and published by May 31, 2011.

Another measure calls for a “full and transparent” economic and financial assessment of the NBN. As part of his assessment, a Joint Select Committee created from both houses will be used to oversee the rollout of the network.

Some of the other measures will include:

• “Analysis of the current availability of broadband across Australia, including the identification of suburbs and regions where services are of a lower standard or higher price than in the capital cities.”
• “Consideration of the most cost-effective and speedy options by which fast broadband services can be made available to all Australians, (particularly those in regional and remote areas and underserved metropolitan areas).”
• “Consideration of the economic, productivity and social benefits likely to flow from enhanced broadband around Australia, and the applications likely to be used over such networks.”

Two industry groups largely supportive of the NBN, the Australian Information Industry Association and the Australian Industry Group, had no comment when they were contacted by SmartCompany this morning.

Communications minister Stephen Conroy has released a statement accusing the Coalition of being interested in wanting to delay the network, and “not delivering real reforms for Australians”.

“Australians have already had to wait 12 years for action while the former Howard Government did nothing to improve broadband services across the country,” Conroy said. “They don’t deserve to put up with further delays.”

The Greens are also suspicious, with communications spokesman Scott Ludlam saying in a statement the party will consider, “whether this is a serious bid for relevance and transparency, or another in a long line of Coalition delaying tactics designed to destroy the network”.

The bill comes after months of calls for the Government to release a cost-benefits analysis of the network. While those calls were somewhat fulfilled last week when the NBN Co. said it would deliver an analysis to the Government, the Coalition is still not satisfied.

Meanwhile, the Future Fund has confirmed it has sold off more Telstra shares, dropping its holding to 10%. The announcement was made by Future Fund general manager Paul Costello at a Senate Estimates hearing last night.

“The Board notes the on-market sale was conducted smoothly and in an orderly manner to avoid untoward market impact. The Board’s selling activity has averaged less than 14% of the volume of Telstra shares traded over the period,” the fund said in a statement.

“The Board continually assesses its overall portfolio and took the view that conditions were appropriate for it to reduce its overweight Telstra holding by selling on-market. Relevant considerations included the expiry in February 2010 of the Board’s self-imposed lock-up, equity market conditions and liquidity and the assessment of alternative investment opportunities.”

The sale saw Telstra’s share price down about 4c yesterday to $2.65, just over the record low of $2.62 recorded in late September. The sale was also taken as a troublesome sign, as the Government prepares to introduce legislation today that will clear the way to restructure the company ahead of the NBN.

But Telstra officials said last night at a Parliament House function that the $11 billion deal struck with the Government earlier this year is still underway.

Telsyte analyst Chris Coughlin says the sale isn’t a surprise, and is in no way connected to the current legislative offering before Parliament.

“The Future Fund has been very public in that they were heavy in their overall portfolio of stocks, so it was expected to reduce them. They’ve had a desire to reduce their holdings in Telstra as a matter of course.”

“That stock in Telstra is not providing them with a balanced risk profile. They’re looking for conservative solid gains, not speculative-like holdings.”