Leaked document details Rudd govt strategy for Telstra NBN negotiations

Cabinet documents outline principles for negotiating any potential investment in NBN Co

A document outlining the key points for the Rudd government’s 2009 announcement that it would fund the rollout of a national fibre network and a second document outlining a strategy for negotiating with Telstra and other potential investors in NBN Co are among those released by the ABC.

The ABC today published ‘The Cabinet Files’ — a trove of cabinet-in-confidence documents obtained from locked filing cabinets sold at a Canberra second-hand store — as well as a number of accompanying articles based on the files.

Among the leaked documents is one titled ‘NBN financing options and borrowing and budget impacts’ (PDF). The un-dated document details the Rudd government’s proposed financial commitment to the National Broadband Network including related measures to be included in the 2009-10 budget.

Then-prime minister Kevin Rudd in April 2009 announced that the government would establish a publicly owned company to build the NBN. The announcement came after months of negotiations with the private sector over a rollout.

Details of key points of the announcement are included in the document, as well as a list of matters to be settled in the upcoming budget and matters to be clarified during an implementation study, including consulting with the Australian Bureau of Statistics on the classification of NBN Co as a government investment (a move that has kept it off-budget).

Initial advice to government indicated that the NBN, which under Labor’s plan would have a fixed-line footprint comprising solely fibre to the premises (FTTP), would cost $38 billion to $43 billion. NBN Co, which is now using a ‘mixed-technology’ approach to the rollout, is currently working to a peak funding base case of $49 billion, although it has said the rollout could cost up to $51 billion.

A second cabinet-in-confidence paper released by the ABC states that it builds on three other documents prepared by the government’s Broadband Working Group, none of which have been made public: “The Negotiating Strategy”, “NBN Co Privatisation Strategy” and “Telstra — Engagement Strategy”.

The paper outlines a proposed approach for dealing with Telstra, telcos and other companies that may seek to invest in (the not-yet-established) NBN Co.

(Telstra had ahead of Rudd’s announcement submitted a non-compliant bid for the NBN tender, when the government had originally envisaged a private sector-led rollout of the new network.)

The leaked document entertains the prospect of private sector investment in NBN Co well ahead of its eventual planned privatisation though it argues the government should not rush into negotiations in response to early offers but “keep interested parties engaged through consultation rather than negotiation”.

“The overarching goal is to build the NBN Co network in the most efficient way with a secondary aim to attract private sector investment into NBN Co to reduce the overall cost to the Commonwealth while preserving the structural reform and competition benefits of the Government’s package,” the document states.

“A key element of the reform is that NBN Co will be a wholesale only firm and it will treat all retail customers equally.”

“In the longer term, the approach to privatisation is also dependent on the extent of private sector investment in NBN Co in the immediate lead up to divestment,” it adds.

“If the company is successful in attracting private equity investment to any significant extent, the scale of the Government stake to be divested will be reduced. However, this gives rise to risks that the private investors may seek to constrain the manner and timing of the Government’s eventual divestment, unless conditions for participation are established from the outset that protect the Government’s flexibility appropriately.”

An annex detailing principles for negotiation include that the government retains 51 per cent ownership of NBN Co until it is privatised. NBN Co’s role as a wholesale business is non-negotiable, but Telstra could potentially invest cash or fold in assets (such as ducts) subject to a strict (and at that stage not-yet-determined) ownership cap.

Telstra would be banned for decision making about most of NBN Co’s operations, including access, pricing and rollout timing; however the document said that where the rollout took place and the phasing of the rollout could be potentially negotiated.

Telstra could potentially have a say in the design of the new network and the use of existing infrastructure, the document indicates.

The use of fibre to the premises technology would not be up for negotiation, the document says.

The full documents are available from the ABC website.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags broadbandNetworkingnbn conational broadband networkNational Broadband Network (NBN)

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Rohan Pearce

Rohan Pearce

Show Comments



Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?