The Hon
Malcolm Turnbull MP

Minister for Communications

Panel of Experts to conduct cost-benefit analysis of broadband & review NBN regulation

12 December 2013

The Hon Malcolm Turnbull MP
Minister for Communications

The Australian Government has today appointed a Panel of Experts to conduct an independent cost-benefit analysis of broadband and review of the regulatory arrangements for the National Broadband Network.

The Panel will consist of Dr Michael Vertigan AC as Chair alongside Ms Alison Deans, Professor Henry Ergas and Mr Tony Shaw PSM as Panel members.

The Panel members bring decades of relevant experience in telecommunications, regulation and competition policy, economics, public policy and digital business to this important inquiry (see Appendix A).

Their work will provide the Government with rigorous, robust and independent advice that will help guide decisions on the future of fast broadband and the National Broadband Network (NBN) in Australia.

The Terms of Reference (see Appendix B) task the Panel with analysing all costs and benefits arising from the availability of broadband of differing properties via various technologies.

The Panel will make recommendations on regulation and policy, including the role of government support for fast broadband, industry structure and competition, and a number of other longer-term industry matters.

The Panel will provide a report to Government within six months.

Media contact:
David Bold: 0423 202 369


APPENDIX A: Panel of Experts Backgrounds

Dr Michael Vertigan AC

Dr Michael Vertigan AC has had an extensive career in both the public sector and business, focussing primarily on finance, investment, infrastructure and energy. He is currently Chair of the Australian Maritime College Board and Director of Aurora Energy and Commonwealth Superannuation Corporation. Michael's previous board appointments included Executive Chairman of Basslink Development Board and Chairman of MyState Limited, Tasmanian Perpetual Trustees, Energy Security Council, Solar Flagships Council and AGEST Superannuation Fund. Michael is a former Director of Eraring Energy and former Chancellor of the University of Tasmania. Prior to that, Michael was Secretary, Department of Treasury and Finance, in Victoria and Tasmania, and was Secretary, Department of Premier and Cabinet, Tasmania. Michael holds an honours degree in economics from the University of Tasmania and a PhD from the University of California (Berkeley).

Professor Henry Ergas

Professor Henry Ergasis a Senior Economic Adviser at Deloitte Australia and Foundation Professor of Infrastructure Economics, SMART Infrastructure Facility at the University of Wollongong where his focus is on the economic, regulatory and public policy research program. Previously, Henry was Chairman of Concept Economics, Vice President and Regional Head, Asia Pacific, at CRA International, and Managing Director of the Network Economics Consulting Group. From 1978 to 1993, Henry was an economist at the OECD in Paris, where he undertook the OECD's first review of telecommunications policy and was successively Head of the Secretary-General's Task Force on Structural Adjustment and Counsellor for Structural Policy in the Economics Department. As well as his responsibilities at the OECD, he taught at the Ecole Nationale de la Statistique et de l'Administration Economique, the Centre for European Policy Studies, the RAND Corporation, BellSouth NZ Visiting Professor of Network Economics and Communications at the University of Auckland, and the Kennedy School of Government. Henry served as a consultant to the Department of Communications in its review of telecommunications policy in 1987-91, was a member of the Review of Telecommunications Regulation in 1996 and of the Review of Universal Service Obligations in 1997, chaired the Australian Intellectual Property and Competition Policy Review in 2000-2001, served as a member of Telecom Italia's Economic Advisory Board from 1994 to 2006, and is a Lay Member of the New Zealand High Court.

Alison Deans

Alison Deans is a Director of Insurance Australia Group. Alison was Executive Director and then CEO of Netus, a technology investment company focused on building consumer web businesses in the Australian market from 2006 to 2013. Alison was previously Investment Executive at Consolidated Press Holdings. Alison was the inaugural Managing Director at eBay Australia and New Zealand, CEO of Ecorp (a technology focused investment company with interests in online businesses including ninemsn, eBay, Ticketek, Wizard, Monster, Schwab and Distra) and interim CEO of Hoyts Cinemas. Alison also worked as senior engagement manager and business analyst at McKinsey & Company.

Tony Shaw PSM

Tony Shaw is a consultant on regulatory and competition issues. He was a member of the NBN Panel of Experts established to undertake a competitive assessment of proposals for the rollout of a national broadband network. He was also a member of the Expert Taskforce established as part of the High Speed Broadband Network Infrastructure Proposal process. Tony was a member of the team that undertook the NBN Implementation Study. He was previously Chairman and CEO of the Australian Communications Authority and Associate Commissioner of the Australian Competition and Consumer Commission. Tony led the team that developed the principles for telecommunications policy and regulation for a competitive environment and subsequently managed preparation of the 1997 Australian telecommunications legislation. Tony has wide experience as an applied economist, starting his career working in the Bureau of Transport Economics, the Bureau of Industry Economics and the Bureau of Transport and Communications Economics.

APPENDIX B: Terms of Reference

Independent Cost-Benefit Analysis & Review of Regulation

The purpose of the Independent cost-benefit analysis and review of regulation is to analyse the economic and social costs and benefits (including both direct and indirect effects) arising from the availability of broadband of differing properties via various technologies, and to make recommendations on the role of Government support and a number of other longer-term industry matters.

Information flowing from the NBN Co Strategic Review should be considered as input to this analysis /review.

The review is to report to the Government within six months of these terms of reference being received on the following questions:

What is the direct and indirect value, in economic and social terms, of increased broadband speeds, and to what extent should broadband be supported by the government?

  • This should consider the economic and social benefits of bringing forward improvements in broadband speed and the respective benefits of alternative / potential technologies.
  • It should also consider the extent to which market pricing mechanisms can capture the value of benefits (including benefits to Australian governments).

What are the optimal long-term ownership and regulatory arrangements for NBN Co?

  • This should include coverage of the requirements of the statutory review of the telecommunication industry access arrangements required under the Competition and Consumer Act 2010.

How should the activities of NBN Co be constrained given its mandate to efficiently build, operate and maintain a wholesale-only access network?

  • This should include consideration of the issues associated with infrastructure based competition and the economic benefit of alternatives.
  • Recommendations should be made on the structure of the Australian wholesale broadband market, including regulatory arrangements.

How should NBN Co's capital investment, products and pricing be reviewed and regulated?

  • This should consider advice on how products should be structured to promote efficiency, consumer choice and competition.
  • This should also consider, in the context of NBN Co's proposed pricing structure, the extent to which retail price controls should be continued.
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