Malcolm Turnbull says the NBN was a mistake and may never make money
Prime Minister Malcolm Turnbull says that, in hindsight, the National Broadband Network project was a mistake and blamed the former Labor government for setting up a new government company to deliver the mammoth infrastructure project.
And Mr Turnbull, who was previously the Communications Minister in the Abbott government, admitted the giant project might never make back the money invested by taxpayers.
Despite this, the Prime Minister said his government had no plans to impose a levy or penalty on people who connect to the internet using mobile data connections, rather than the fixed line network.
Customers who connect to the internet via a fixed-line connection that is a competitor to the NBN network will soon have to pay a levy of $7.09 a month to help subsidise the NBN, which is required to offer connections to hard-to-reach customers.
NBN Co chief executive Bill Morrow says a similar levy may need to be applied to mobile connections for the NBN to make a profit – or the government may need to consider new regulation to protect the approximately $49 billion network, so that it can receive a return on its investment.
Complaints about the NBN increased by 160 per cent in the last year, according to the Telecommunications Industry Ombudsman, with more and more users revealing they are not getting the speeds they have paid for and, in some cases, are receiving slower speeds than those they achieved on older ADSL connections, which are being phased out.
NBN Co has blamed retail service providers, who sell connections to the network to the public, for the slower than expected speeds and argued retailers have not purchased enough bandwidth to deliver promised speeds.
On Monday, ahead of a Four Corners report into the delivery of the network, Mr Turnbull was asked at a press conference in Canberra if “in hindsight, the project was a mistake” and a “massive waste of money”.
“Yes,” Mr Turnbull responded.
“Well, it was a mistake to go about it the way they [Labor] did; setting up a new government company to do it was a big mistake. If you want to look at a country that did this exercise better, it’s New Zealand, and what they did there was ensure the incumbent telco, the Telstra equivalent, split network operations from retail operations and that network company became, in effect, the NBN,” he said.
“So the way Labor set it up was hugely expensive. And there are many billions of dollars wasted – and I’ve said this many times, it’s a fact of life – that we can’t recover. So having been left in a bad place by Labor, what we are doing is ensuring we deliver it as quickly and cost-effectively as possible but I have to say to you, again, one complaint is one complaint too many.”
Mr Turnbull said he was aware that a lot of people were not getting what they had paid for and that he was in discussions with NBN Co and the competition regulator, the ACCC, about the issue – with more monitors to be put in place to address the issue.
He said, however, that there were no plans for a levy on mobile connections as the NBN had a competitive advantage over mobile because of its ability to deliver huge amounts of data.
“Well, there is no plan to impose any restriction on, you know, mobile data. Can I just make a little point about mobile data? The latest figures I have show that the average use of data on a mobile plan is around 15 gigs a month. For NBN customers, it’s around 150 [gigabytes]. You can see the advantage of the fixed-line network is that it provides enormous capacity,” he said.
The Prime Minister said there were question marks over whether the network would ever make money, and rubbished claims by former prime minister Kevin Rudd that the project would have attracted private investors.
“At the moment, it is estimated to deliver a return of around 3 per cent, which is not – it is enough to keep it on the government’s balance sheet, as a government asset, but it certainly is not a commercial return that the stock market would expect. It was supposed to be 6 per cent,” he said.
When he became communications minister, Mr Turnbull helped lead the switch away from the faster but more expensive Labor plan to roll out fibre to the home. Instead, the company switched to fibre to node, which leaves users relying on old copper wires for the final connection to their home – which has the effect of slowing the speeds available.
Source : SMH.com.au
