A Bill for an Act to require the preparation and publication of a business case and a cost benefit analysis of the proposed National Broadband Network, and for related purposes
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the National Broadband Network Financial Transparency Act 2010.
2 Commencement
This Act commences on the day after it receives the Royal Assent.
3 Definitions
In this Act:
NBN means the National Broadband Network to be implemented by NBN Co.
NBN Co means the company known by that name.
4 NBN Co to prepare and publish a business case
(1) NBN Co must prepare a business case for the NBN and publish it by 19 November 2010.
(2) The business case must include detailed 10 year forecasts or projections of the NBN’s key financial and operational indicators, including the following:
(a) annual costs, revenues, cash flows, capital expenditures, EBITDA, depreciation, taxes, and net profit/loss;
(b) year‑end balance sheets;
(c) all financing events and dividends or returns of capital;
(d) the numbers of:
(i) premises passed by the NBN; and
(ii) residential and business subscribers for services delivered over the NBN;
(e) average retail and wholesale revenues per user;
(f) internal rates of return on invested capital.
5 Productivity Commission to prepare and publish a cost‑benefit analysis
(1) The Productivity Commission must prepare a cost‑benefit analysis of the NBN proposal and publish it by 31 May 2011.
(2) The cost‑benefit analysis must include the following matters:
(a) an analysis of the availability of broadband services across Australia, identifying those suburbs and regions where current service is of a lesser standard or higher price than the best services available in the capital cities;
(b) a consideration of the different options by which broadband services of particular speeds could be made available to all Australians (particularly those in regional and remote areas and those in underserved metropolitan areas) with an estimate of the likely timeframe and cost of each option;
(c) a consideration of the economy‑wide benefits likely to flow from enhanced broadband services around Australia, the applications likely to be used on such services, and in particular a consideration of the different scale of such benefits depending on the broadband speed available;
(d) a full and transparent costing of the proposed NBN project, including any financial and economic projections, models, assumption and sensitivity calculations underpinning the estimates;
(e) an examination of reasonable commercial rates of return and cash flows for NBN Co, taking into account NBN Co’s costs of equity and debt and the risk profile of both NBN Co and the market in which it operates;
(f) a consideration of what the likely realisable value of NBN Co would be if it were to be privatised after five years, as currently contemplated in the legislation;
(g) an examination of the design, construction and operating arrangements of the proposed NBN project, so that direct and indirect outcomes from its construction and operation can be identified and evaluated;
(h) an analysis of the effects of the proposed NBN on competition in the Australian fixed‑line broadband market, including its effects on the scope for competition among different technologies for fixed‑line broadband provision.
(3) The Productivity Commission Act 1998 applies in relation to the requirement in subsection (1) as if:
(a) the requirement were a matter referred to the Productivity Commission for an inquiry by the Minister administering that Act; and
(b) the Minister had required the Commission to hold hearings for the purposes of the inquiry under paragraph 11(1)(a) of that Act; and
(c) subsections 11(2), (3) and (4) and section 12 of that Act were omitted.