Federal Politics

Split up and sell off the NBN: Infrastructure Australia

The Turnbull government should split up the National Broadband Network and start preparing to sell it off to private companies, according to a landmark infrastructure plan.

The Infrastructure Australia report, which presents a 15-year vision for the nation's infrastructure needs, says the NBN should be privatised in the "medium term". 

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"In the near term, the Australian government should commission a scoping study to assess the most appropriate approach, structure and timing to deliver a privatised NBN model," the report recommends.

"The scoping study to assess the most appropriate approach and structure for a privatised NBN should include options to efficiently support delivery of NBN services in regional and remote areas that are non-commercial."

Fibre will be closer to 700,000 premises under the new NBN plan.
Fibre will be closer to 700,000 premises under the new NBN plan. Photo: Rob Homer

The report adds: "It may be desirable to defer the privatisation of NBN Co until the rollout is complete, both to avoid disrupting a complicated infrastructure project and in recognition that private investors are likely to have less appetite for risk during the rollout phase."

The Turnbull government has instructed NBN to complete the national roll-out by 2020, four years later than it anticipated at the 2013 election. 

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The report also backs calls for the NBN to be broken up into separate units ahead of any sale.

"NBN Co should be split into distinct business units to encourage infrastructure competition, promote private investment, and allow for specialisation in managing different networks," the report says.

One option would be to separate the company based on technology, with one company selling services over former pay television cables (the Hybrid Fibre Coaxial network), another selling fibre-to-the-node and fibre-to-the-premise while a third would sell the satellite and wireless services.

Another option would be to split up the company according to geographic lines.

The Australian Competition and Consumer Commission (ACCC) and an expert review commissioned by the government have previously called for the NBN to be carved up.

"Relying on NBN Co as an integrated entity to be the principal means of delivering [broadband] services is deeply problematic," the 2014 review, led by businessman and former senior Treasury official Michael Vertigan, found.

The government rejected the recommendation at the time, arguing: "While the [break up] of NBN Co's business units (as the panel recommends) after the network is complete cannot be ruled out, now is not the time.

"Breaking up NBN Co would distract its management and delay the provision of high-speed broadband to all Australians."

A spokeswoman for Communications Minister Mitch Fifield said: "As stated last year, the government has no plans to sell nbn.

"The Coalition is committed to rolling out the nbn and expects the network to be completed by 2020."

The government would be required by legislation to commission a Productivity Commission review before selling off the network, the spokeswoman said. 

Labor communications spokesman Jason Clare said: "Malcolm Turnbull should focus on building the NBN, getting it to work and actually keeping the promises he made on the NBN before he starts thinking about a fire sale."

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