The Senate Select Committee on the National Broadband Network Interim report December 2008 © Commonwealth of Australia ISBN: 978-0-642-71991-1 This document was printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra. Members Of The Committee Members Senator Mary Jo Fisher, Chair, LP, SA Senator Fiona Nash, Deputy Chair, NATS, NSW Senator Simon Birmingham, LP, SA Senator Kate Lundy, ALP, ACT Senator the Hon Ian Macdonald, LP, QLD Senator Glenn Sterle, ALP, WA *Senator Simon Birmingham, LP, SA was Deputy Chair of the Committee from 27 June 2008 to 25 September 2008. Participating Members Senator Mark Bishop, ALP, WA Senator Scott Ludlam, AG, WA Senator the Hon. Nick Minchin, LP, SA Secretariat Ms Alison Kelly Secretary Ms Kyriaki Mechanicos Senior Research Officer Ms Meredith Bond Executive Assistant Ms Cassimah Mackay Executive Assistant Suite S1. 61 Telephone: (02) 6277 3635 Parliament House Fax: (02) 6277 5794 CANBERRA ACT 2600 Email: [email protected] iii TABLE OF CONTENTS Members Of The Committee ........................................................................... iii Abbreviations ................................................................................................... vii Glossary...............................................................................................................xi List of Committee Comments and Conclusions............................................xix Chapter 2..............................................................................................................xix Chapter 3...............................................................................................................xx Chapter 4...............................................................................................................xx Chapter 1 .............................................................................................................1 Introduction ..............................................................................................................1 Referral of the inquiry ............................................................................................1 Conduct of the inquiry to date................................................................................1 Background to the inquiry......................................................................................2 Structure of this report............................................................................................8 Chapter 2 ...........................................................................................................11 Framework for the Request for Proposals...........................................................11 Introduction ..........................................................................................................11 What is broadband? ..............................................................................................11 Specified coverage of the NBN............................................................................14 Definition of open access .....................................................................................20 Funding estimates and allocation .........................................................................27 The RFP process itself..........................................................................................34 Chapter 3 ...........................................................................................................39 Regulatory Revolution Required? ........................................................................39 Introduction ..........................................................................................................39 v Seizing the unique opportunity to make regulatory change.................................40 Chapter 4 ...........................................................................................................67 Deployment..............................................................................................................67 Introduction ..........................................................................................................67 Dissenting Report by Government Senators..................................................85 The Importance of Broadband..............................................................................85 Howard Government’s Broadband Legacy..........................................................87 The National Broadband Network Process ..........................................................95 Contradictions in Recommendations of Majority Report ..................................102 Dissenting Report by Australian Greens Senators......................................111 APPENDIX 1 ...................................................................................................115 Terms of Reference...............................................................................................115 APPENDIX 2 ...................................................................................................119 Commonwealth’s Objectives for the National Broadband Network...............119 National Broadband Network Evaluation Criteria...........................................121 APPENDIX 3 ...................................................................................................123 Submissions Received...........................................................................................123 APPENDIX 4 ...................................................................................................125 Witnesses Who Appeared Before the Committee .............................................125 vi Abbreviations ABG Australian Broadband Guarantee ACCC Australian Competition and Consumer Commission ACMA Australian Communications and Media Authority ADSL Asymmetrical Digital Subscriber Line ADSL2 Asymmetrical Digital Subscriber Line version 2 ADSL2+ Extended Bandwidth ADSL2 AMPS Advanced Mobile Phone System BAF Building Australia Fund BCA Business Council of Australia BSL Broadband Service Locator CAN Customer Access Network CCC Competitive Carriers Coalition CCF Cross Connect Facility CEG Communications Expert Group COAG Council of Australian Governments CSG: Customer Service Guarantee DBCDE Department of Broadband, Communications and the Digital Economy DCITA Department of Communications, Information Technology and the Arts DOCSIS Data Over Cable Service Interface Specification DSL Digital Subscriber Line DSLAM Digital Subscriber Line Access Multiplexer EFA Electronic Frontiers Australia EOI Expression of Interest ESA Exchange Serving Area vii FTTH Fibre-to-the-Home FTTN Fibre-to-the-Node FTTP Fibre-to-the-Premise HiBIS Higher Bandwidth Incentive Scheme HFC Hybrid Fibre Coaxial HSPA High Speed Packet Access ICAAN Internet Corporation for assigned Names and Numbers ICT Information and communications technology Integrated Services Digital Network or Isolated Subscriber Digital ISDN Network IP Internet Protocol IPA Infrastructure Partnerships Australia IPTV Internet Protocol Television IRCA Indigenous Remote Communications Australia ISP Internet Service Provider LTE Long Term Evolution LTIE Long-term interests of end-users Megabyte – a million bytes; one byte is a unit of binary information MB comprising 8 bits. Mbps Megabit per second – a million bits per second MHz Megahertz NBN National Broadband Network NGN Next Generation Network OAN Open Access Network OECD Organisation for Economic Co-operation and Development OPEL Optus and Elders Communication viii POP Point of Presence POTS Plain Old telephone Service P2P Point to Point or Peer to Peer PSTN Public Switched Telephone Network RFP Request for Proposal RIM Remote Integrated Multiplexer RSP Retail Service Provider RTIRC Regional Telecommunications Independent Review Committee SA South Australia SAU Special Access Undertaking SMEs Small and medium sized enterprises STD Subscriber Trunk Dialling STS Standard Telephone Service The department The Department of Broadband, Communications and the Digital Economy The Panel The Panel of Experts TIO Telecommunications Industry Ombudsman TPA Trade Practices Act 1974 ULLS Unconditioned/Unbundled Local Loop Service USO Universal Service Obligation VDSL Very High Speed Digital Subscriber Line VoIP Voice-over-Internet Protocol WA Western Australia WA CCI Western Australian Chamber of Commerce and Industry WA DOIR Western Australia Department of Industry and Resources WiMAX Worldwide Interoperability for Microwave Access ix Glossary Access Network That part of a communications network which connects subscribers to their immediate service provider. It is contrasted with the core network. Active Optical Network A network in which the passive splitting point is replaced with an Optical Line Distribution unit which is a powered unit making it possible to have a higher bit rate on individual routes over longer distances than on a passive optical network. Backhaul The backhaul portion of the network comprises the intermediate links between the core, or backbone, of the network and the small sub networks at the "edge" of the entire hierarchical network. For example, while cell phones communicating with a single cell tower constitute a local sub network, the connection between the cell tower and the rest of the world begins with a backhaul link to the core of the telephone company's network (via a point of presence). Bandwidth The capacity for a given system