FED:NBN not a 'cheap-price nirvana': Turnbull

AAP General News (Australia)
12-20-2010
FED:NBN not a 'cheap-price nirvana': Turnbull

By Adam Bennett

SYDNEY, Dec 20 AAP - Federal opposition communications spokesman Malcolm Turnbull says
a National Broadband Network (NBN) business plan released by the government shows there
will be "no nirvana for cheaper broadband".

Restating the coalition's opposition to the $35.9 billion NBN, Mr Turnbull said the
business plan released by the government on Monday was "not really a business plan"

"This has just got summary financials," he said.

Under the NBN, telecommunications wholesalers will pay at least $24 a month for a basic
plan, which will offer download speeds of 12 megabits per second and upload speeds of
one megabit per second.

However, the plan gave no indication of what price retailers will charge for access
to the high-speed, fibre optic network.

Mr Turnbull said the price of the basic plan was comparable with what was currently
available on the market.

"It's supposed to deliver universal and affordable broadband, and yet the broadband
price that they've talked about today ... is comparable, it is certainly no cheaper than
many comparable prices for 12 megabits per second for broadband ADSL2+," he told reporters
in Sydney.

"This is no nirvana for cheaper broadband for Australians."

Along with the base wholesale price, the long-awaited business plan also reveals a
predicted seven per cent internal rate of return for NBN Co Ltd.

The assumption is based on a 70 per cent takeup of the network by businesses and homes.

Further to the expected rate of return is the prediction of a $13.4 billion capital
raising from the markets by 2015.

Prime Minister Julia Gillard said the business plan showed the $35.9 billion network
was financially viable.

Taxpayers' investment "will be returned with interest," Ms Gillard said.

But Mr Turnbull questioned the "monstrous" investment in the network.

He doubted if there was a widespread need for the 100 megabit per second speeds detailed
in the plan, and said many Australians with inadequate broadband services would have to
wait more then a decade for improvements.

"This is massively overcapitalised, it is going to be too slow in terms of rectify
service inadequacies around Australia," he said.

"There is a very real risk that this massive investment will turn out to be a glorious
white elephant, another monument to Labor folly."

Opposition leader Tony Abbott said the details released by the government did nothing
to change the coalition's stance on the NBN - or what he derisively called the "Nationalised
Broadcasting Network".

"It's pretty obvious that the main usage for the NBN is going to be internet-based
television, video entertainment and gaming," Mr Abbott said.

"As far as the coalition is concerned there is nothing wrong with any of this, but
given all of the infrastructure needs facing Australia's roads, railways, ports, health,
education, let alone the problems with voice telephony, it's far from clear that this
really is a sensible investment."

Mr Abbott again called for a cost benefit analysis of the broadband network, which
was lacking in the plan released by the government.

"A massive infrastructure investment of this kind should not be made without a proper
cost benefit analysis," he said.

"We've been calling all along for the national broadband network to be submitted to
full cost benefit analysis by the productivity commission - the government still does
not trust its case for that kind of scrutiny."

AAP ab/klm/it

KEYWORD: NBN COALITION

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