Turnbull questions NBN Co annual report

Communications Minister Malcolm Turnbull has questioned the legitimacy of NBN Co’s 2013 annual report, which was produced by NBN Co under the previous government and released to the public just last week.

The report is dated 30 June 2013 and lists the previous government’s Anthony Albanese and Penny Wong as Shareholder Ministers. It represents the organisation’s take on its progress over the prior 12 months.

In the report, then-chairman Siobhan McKenna - who has since resigned from NBN Co - said: “In areas where the NBN Fibre Access network has been operational (ready for service) for more than six months, an average of more than 35 per cent of the premises passed has taken up an NBN service. In some areas take-up is already in excess of 60 per cent.

“By contrast, after six years of ADSL, the Australian Bureau of Statistics found that 28 per cent of households possessed broadband,” she said.

Then-CEO Mike Quigley - who is also no longer with NBN Co - said: “As a result of the actions taken by NBN Co, the company achieved its revised end-of-year forecasts for the rollout of Fibre and experienced the anticipated acceleration in the ramp-up of construction.

“At the end of fiscal 2013, 1,115,000 premises had reached construction commenced or completed and the number of Fibre premises passed in the period was 207,500,” he said.

But in a letter tabled alongside the annual report, Turnbull and Finance Minister Mathias Cormann questioned several aspects of the document.

In the letter, which was addressed to NBN Co Chairman Ziggy Switkowski, the pair said the report “necessarily reflects NBN Co’s implementation of the broadband policies of the previous Government” and that “we believe it important also to place some matters on the public record to provide context for readers”.

The pair said that some information in the report “is expressed in a form, or measures a concept, specific to the previous Government’s policies” and that “in the view of the current Government, this does not necessarily provide a meaningful indicator of progress”.

For one, they called into question NBN Co’s definition of “construction [that] has commenced or been completed” for premises in the brownfields fibre footprint.

“A casual observer might assume this … just includes premises able to connect to the NBN plus those where physical construction is underway. In fact ‘construction commenced’ also includes premises where high-level design work has been performed but actual physical build work with those designs has yet to commence,” Turnbull and Cormann said in the letter.

They also questioned the annual report’s use of the terminology of premises “passed” by NBN Co.

“This is a common term in the communications sector that refers to premises able to obtain a service if they want one,” the pair wrote.

“But the Annual Report does not include any adjustment for premises classified as ‘service class zero’ - an internal NBN Co term for premises passed but unable to obtain service (typically because they are located in a ‘multi-dwelling unit’ such as an apartment building or shopping mall).

“Plainly there is substantial room to improve the quality and transparency of NBN Co’s reporting,” Turnbull and Cormann said.