SKY NEWS AM AGENDA
MONDAY, 13 JUNE 2016
SUBJECT/S: Labor’s plan to build the National Broadband Network that Australia needs to create the jobs of the future
JASON CLARE, SHADOW MINISTER FOR COMMUNICATIONS: Kieran what Bill Shorten and I will be announcing in more detail later today is that we can rollout fibre-to-the-premises to up to two million more Australian homes and businesses. A key part of this that we will make very clear today is that we can do this at the same taxpayer contribution as the Government’s model which is $29.5 billion dollars and roll it out over the same timeframe. We expect that under our model, as well as under the Government’s model that it will take until the middle of 2022 to complete the NBN.
KIERAN GILBERT: Can you talk us through some of the detail of this? If the Government is going fibre-to-the-node, which is essentially fibre to the end of the street and you are saying fibre-to-the-premises to every home now. How is that going to be the same cost?
CLARE: Just be clear on this Kieran, we are not saying every home. We will be able to roll it out to an extra two million homes. That will almost double the number of homes in Australia that will get fibre to the home. It means the capital cost of doing that is higher but the operating cost of that infrastructure is lower because you don’t have the cost of fixing and maintaining that old Telstra copper that Malcolm Turnbull is using for his copper version of the NBN. And you don’t have the electricity bills that come with running those 30,000 nodes that Malcolm Turnbull wants to build around the country as well. By doing this you also increase the amount of revenue that NBN makes so the internal rate of return on this project goes up because of the investment in more fibre as well.
GILBERT: The Government says it is going to be finished by 2020. Are you committing today that your plan will be done, finalised, complete by 2020 if you win Government?
CLARE: No Kieran. What I have just said, a moment ago, is that this would be complete by June of 2022.
GILBERT: So it is going to be slower then?
CLARE: What we believe is that the Government’s project won’t be complete until June of 2022 either. That’s not because of fibre or because of copper it is because of the delays with the rollout of the HFC. This is the Foxtel network that runs down the street in Sydney, Melbourne and Brisbane to around about three million homes that the Government is using to build the NBN. We will keep and use that as well. But it is the long pole in the tent here.
The Government promised that 2.6 million homes would have access to the NBN through this HFC network by the end of this year. The fact is, as we speak today not one home has been switched on to this HFC network yet. The first gets switched on in a couple of weeks time. That’s where the real delay is. That’s why under the Government’s model, as well as under our model we believe it won’t be completed until the middle of 2022.
When you look at the Government’s forward projections for rolling out the NBN you can see that after this election suddenly they ramp up exponentially. A ramp that Evel Knievel couldn’t jump. What we are saying very clearly today is that the Government won’t meet their projections to complete the NBN by December 2020.
GILBERT: What is the internal rate of return then? Because obviously that is pivotal to how much this is going to cost.
CLARE: The internal rate of return will go up from a minimum under the Government of 2.7 to a base case or as low as 3.9 but potentially higher. So that means more revenue coming back into the NBN company, and more revenue for the Australian taxpayers.
GILBERT: So can you give us a bit of detail as to how you will have that better internal rate of return from this proposal with fibre-to-the-premises for more than two million homes?
CLARE: Kieran think about it like this, if more Australian businesses have got fibre connected to their business, or more Australian homes have got fibre connected to their homes than the slower copper network that can only guarantee 25 megabits per second then more Australian businesses and more Australian homes will purchase faster speeds. That will mean in turn more revenue coming back in to the NBN.
GILBERT: Do you charge them more as well?
CLARE: Prices are based on the speed that you purchase so it varies depending on the type of product that you purchase. What’s very, very clear though is that prices don’t change under this model. Wholesale price for access to the NBN is the same under our model as it is under the Turnbull second rate copper model and that’s because all of these prices are set independently by the ACCC.
GILBERT: Mr Clare we are out of time. Thank you for your time this morning, appreciate it.
CLARE: Thanks Kieran.