Thursday, November 18, 2010

Inconsistency of the Senate

Reports today that the Senate has passed a motion calling for the immediate release of the NBN Co Business Plan while the Prime Minister has noted that the Government at least needs to decide if there is information that shouldn't be released. More on the last point later.

It is the basis of the argument I dispute. The coalition would NEVER support a motion that any business was required to publish its whole business plan, even though that plan spends "shareholder money". The way we "protect" shareholder interests is requiring the management to provide the plan to the Board as representatives of shareholders.

This raises the ultimate question, is the Parliament the representative of the people or is the Government the representative? The short and practical answer is actually that it is the Government. The annual budget and estimates process is only conducted at the level of high level measures, there is no detailed scrutiny.

The current motion also includes a confusion of whether what has been delivered is a business plan or a business case. The former is a document that covers all the activities of a company for a defined period. Usually the period is three years but it may be five.

A business case is a study of the whole returns of a specific (investment) proposal. That would be about the commercial return over the whole project (which is still different to a cost-benefit analysis).

That raises the important question of why the first business plan is particularly of interest. Surely the issue should be about what the level of disclosure should be on all future business plan submissions. As I've written elsewhere this is an issue for the NBN Co legislation.

The only potentially valid criticism of the Government is that the NBN Co legislation hasn't yet been introduced. However, the Minister and Government have the perfect defence in the obstructionism thus far deployed by the Parliament, including the entirely pointless NBN select committee.

If Senator Ludlum wants to make his name as a champion for open and transparent government he needs to learn to do it by addressing substantive change to legislation and not engaging in the kind of stunts that we have seen pulled so far.

Novae Meridianae Demetae Dexter delenda est

1 comment:

ian said...

No one seems to be considering the important issues of the implementation of the NBN.

A decision seems to have been made that NBN Co will only offer Wholesale level 2 services.
The NTU supports 4 Ethernet ports (plus telephony).
There are proposed 66 POI (although there seems to be some debate on this).

NBN Co will not be building a backhaul network, but will be leasing capacity from existing carriers.

The conclusions from this:-

1. NBN Co will only have 4 Wholesale customers per POI.

2. Only large national carriers will be able to build to each POI, although if the number of POI is reduced this will disadvantage regional operators.

Telstra an Optus will undoubtedly have a national presence; it is unclear how many other contenders there will be, or how services will be rationed amongst them. Will we have another auction similar to 3G spectrum ? It seems unlikely there will be any room for regional operators.

3. Whoever has the primary Wholesale access, will need to provide wholesale level 3 services.

4. Operation of a network using leased capacity will be a nightmare, unless NBN Co can obtain access to dark fibre.

There is nothing wrong with the NBN Co access network, and it should be flexible enough to support different service models.
The current operational model seems unlikely to deliver the proposed benefits to the multiplicity of niche providers.