Jeff Lawrence: An NBN that serves the national interest

The creation of a National Broadband Network is an important investment in Australia’s future and will drive productivity and the economy.

Our members will benefit from this initiative as workers and as users of the network.

But given the importance of the project, it is well worth it to take the time to get the framework right so that the NBN serves the national interest, creates good jobs for the future, and takes into account the needs of all Australians.

The project should not be allowed to replicate the sub-standard service, over-charging and poor take-up that characterises Australia’s current broadband market.

After a decade of neglect by the Howard Government, Australia is not getting the broadband service it deserves and consequently broadband penetration is 16th out of 30 OECD countries, at less than 25 subscribers per 100 habitants.

Infrastructure has decayed because of under-investment by Telstra in its copper network, and internet speeds are well below acceptable.

Broadband prices are the eighth most expensive in the OECD. The average monthly cost of a broadband connection is $70, while the basic cost is $57.

Honouring an election commitment, the Rudd Government is preparing to invest $4.7 billion in the new National Broadband Network.

Despite assertions to the contrary, the NBN will be a functional re-monopolisation of the telecommunications sector in Australia at the infrastructure level, whoever wins the bid.

So for that amount of investment, the government is entitled to demand that a core set of principles are met.

Firstly, the NBN must be operated by a company that will drive innovation, maximise competition and amplify take-up.

It should not be a licence to inflate prices and discourage competition in the industry.

And crucially, the successful bidder must have a co-operative relationship with its workforce within the framework of the Federal Government’s Forward with Fairness industrial relations policy.

This means recognising the right of employees to collectively bargain – conducting those negotiations in good faith - and have union representation, and providing quality jobs with decent pay and conditions.

No government could seriously consider allowing a multi-billion tender to go to a company that does not have the appropriate industrial relations arrangements in place.

The ACTU and its three telecommunications affiliates – the Communications, Plumbing and Electrical Union (CEPU), the Community and Public Sector Union (CPSU), and the Association of Professionals, Engineers, Scientists and Managers, Australia (APESMA) – strongly endorse the Federal Government’s policy to provide Australia with a high-speed NBN.

Given what is at stake, we have drawn up a statement of principles for the network (Fibre to the Future: Principles for Australia’s National Broadband Network)  that must be must be met for business, the community, the workforce and the environment if NBN is to provide the foundation for the future of our society and economy.

For business, the principles are incentives to drive future infrastructure development; genuine open access and equivalence, enforced by the ACCC; and maximising take-up so that monopoly power cannot be used to inflate prices.

For the workforce, the successful bidder must commit to rebuilding the national skills base; must provide quality jobs, with decent pay and conditions and secure employment, recognizing the rights of employees to collectively bargain and to have union representation.

For the community, there must be equal access for all end users.

For the environment, the NBN must promote tele-commuting, to reduce carbon emissions; the environment must be protected during construction.

We believe that all bidders should be required to commit to this statement of principles as a pre-condition of their bid being successful, and have told the government so.

It is likely that there will be at least two bidders when tenders close on November 26: Telstra and the Terria consortium.

Unions have been in constructive discussions with Terria about endorsing these principles, including the development of a memorandum of understanding for a co-operative workplace relationship. Telstra, by contrast, has refused to continue discussions with unions.

We are concerned about the bullying and uncompromising approach Telstra has adopted throughout the tendering process.

The ACTU’s Corporate Research Unit recently produced an analysis of shareholder risks for Telstra associated with the National Broadband Network.

This analysis looked at Telstra’s threats to “walk away” from the process if certain conditions were not met, along with the possibility of increased regulation to protect the national interest in the event that Telstra was successful.

It concluded that Telstra’s approach had exacerbated the risk that up to $11.9 billion in market value could be wiped from the company.

We will not take sides and have no preference for one party or the other winning the contract.

All we want is to ensure that Australia gets the broadband network it deserves.

Courtesy of AustralianIT (18.11.08)