Recently discovered cabinet-in-confidence Government documents have revealed how the previous Labor government planned to get Telstra involved with the National Broadband Network (NBN).
The documents, made public by the ABC on 31 January, were found locked inside two filing cabinets that were for sale in a second hand store in Canberra that sells ex-government furniture.
The papers show how the Government at the time, under the leadership of then Prime Minister, Kevin Rudd, planned to attract investment from Telstra prior to the start of the NBN in 2009.
The negotiation strategy described in the documents focused directly on Telstra.
“With respect to Telstra, the strategy is to adopt and maintain a strong and credible position from the announcement with the goal of getting Telstra to reconsider its position and ultimately approach Government to invest in or use NBN Co’s network on the Government’s terms,” the document stated.
“The ideal outcome, over time, is the structural separation of Telstra by action of the board.”
According to the documents, the Government wanted to create an environment where Telstra would agree with the Government’s terms.
“[…] Telstra will initially approach the government with a number of proposals which the government will need to politely but firmly resist,” another section of the document revealed.
At the time the documents were put together, in April 2009, the Government was clear in retaining a majority ownership to be able to privatise NBN Co, the company behind the NBN.
However that plan is now at risk due to subsequent budget blow-outs -- the total cost of the project was originally set at an upper range of $43 billion -- and delays in the delivery of the services. This could lead the government to write-down some of the costs into the budget.
In November 2017, the Australian Labor Party’s Shadow Minister for Communications, Michelle Rowland, said the NBN Co’s decision to pause the rollout of its hybrid-fibre coaxial (HFC) network to fix service issues could cost Australians up to $790 million.
“If the whole program was delayed by six months, what [we] have I think is 1.9 million customers still to connect that we expect to connect. So, if all of those 1.9 million customers – and I don’t think that’s necessarily going to be the case – if they were all delayed by six months, you’d be talking about a $500 million delay in revenue,” he said.