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Turnbull says NBN 'most reckless commitment of Commonwealth funds in our history'

Scales report lands with damning assessment of NBN policy and genesis

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The Scales Review of NBN Mark II Australia's National Broadband Network (NBN) has found the second version of the network's early planning process was chaotic and that NBN Co, the company created to build the network, was not built on foundations suitable to enable the project's success.

Communications Minister Malcolm Turnbull commissioned Bill Scales, a former Telstra and Productivity Commission executive, to assess the NBN's genesis. That report (PDF) emerged overnight and is not kind to the previous government.

The report discusses both “NBN Mark I”, the fibre-to-the-node plan taken to the 2007 election, and the subsequent fibre-to-the-premises “NBN Mark II”.

The report finds “the public policy process for developing NBN Mark II was rushed, chaotic and inadequate, with only perfunctory consideration by the Cabinet.”

“NBN Co was not fit for purpose,” the report adds. “It was start‐up company given a job that only a well‐functioning, large, and established telecommunications company would have been able to undertake in the allotted timeframe. The governance arrangements that operated in the very early stages of NBN Co’s life had a long lasting and detrimental effect on its operations, and a profound effect on the roll out of Australia’s NBN.”

The report goes on to criticise the genesis of NBN Mark II, observing “There is no evidence that a full range of options was seriously considered. There was no business case or any cost benefit analysis, or independent studies of the policy undertaken, with no clear operating instructions provided to this completely new Government Business Enterprise, within a legislative and regulatory framework still undefined, and without any consultation with the wider community.”

NBN Mark I also comes in for some criticism, especially the Australian Competition and Consumer Commission's (ACCC's) suggestion that it would not represent a stepping stone to a fibre-to-the-premises network. That advice “became influential in relation to the decision by the Government to proceed with NBN Mark II.”

But Scales says “It is my view that the ACCC over-reached its authority in providing this advice.”

The report doesn't lay all the blame at the feet of the ACCC and the Labor Government, also querying whether Australia's public service was able to offer timely and quality advice, and if not why not.

“The most senior levels of the Australian Public Service should consider whether the inability of the public service to have its views seriously considered during the NBN public policy development process was circumstantial, or whether it signals a more serious malaise within the Australian Public Service that needs to be addressed,” Scales suggests.

The ABC's story on the report includes a quote from Turnbull to the effect that NBN Mark II “ … was an extraordinary leap into the unknown - the most reckless commitment of Commonwealth funds in our history."

That's a predictable message from Turnbull, as his government seldom misses a chance to paint its predecessor as incompetent. While tempting to recall the Yes Minister aphorism that governments never call inquiries without knowing the result, even a quick read of the Scales Report suggests it contains plenty of mud that is likely to stick. ®

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