NATIONAL BROADBAND NETWORK FINANCIAL TRANSPARENCY BILL 2010 (NO. 2)

i National Broadband Network Financial Transparency Bill 2010 No. , 2010

Contents

Part 1--Preliminary

1 Short

title

...........................................................................................

2 Commencement

.................................................................................

3 Definitions

.........................................................................................

NBN Co to prepare and publish a business case ................................ 2

Productivity Commission to prepare and publish a

cost-benefit analysis ........................................................................... 2

National Broadband Network Financial Transparency Bill 2010 No. , 2010 1

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:

Part 1--Preliminary

1 Short title

This Act may be cited as the National Broadband Network

Financial Transparency Act 2010.

Section 2

2 National Broadband Network Financial Transparency Bill 2010 No. , 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;

(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:

Section 5

National Broadband Network Financial Transparency Bill 2010 No. , 2010 3

(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;

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 the likely pricing structure of NBN

services;

(f) 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;

(g) 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;

(h) 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;

(i) an examination of the likely environmental and health

impacts of the construction of the NBN;

(j) 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 and wireless broadband

provision;

Section 5

4 National Broadband Network Financial Transparency Bill 2010 No. , 2010

(k) an analysis of the impact of any impact of any exemption

from the Trade Practices Act 1974 / Competition and

Consumer Act 2010 in connection to the NBN;

(l) benchmarking of the NBN against comparable broadband

services available in overseas markets;

(m) consideration of potential technological advances and the

likely impact on the NBN, including whether future

technologies may be superior;

(n) consideration of the likely take-up rate for NBN services,

having particular regard to international experience;

(o) consideration of the national building social and community-

specific benefits flowing from the NBN, having particular

regard to rural and regional communities.

(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

omitted.

Commonwealth of Australia Bills

NATIONAL BROADBAND NETWORK FINANCIAL TRANSPARENCY BILL 2010 (NO. 2)