Not for sale: Labor moves to keep NBN in public hands

The national broadband network will be kept in public ownership under a new federal law to be put to parliament this week, in a surprise move by the government to assure 8.5 million customers their service will not be privatised.

The law will force a debate in parliament on the fate of the NBN and challenge the Coalition to say whether it would try to sell the network after taxpayers funded the $51 billion project over more than a decade.

Not for sale: the government plans to introduce laws to keep the NBN in public hands.Credit: James Alcock

Prime Minister Anthony Albanese took the plan to the Labor caucus meeting on Tuesday morning to clear the way for the bill to be put to parliament on Wednesday, according to sources who spoke anonymously to discuss party deliberations.

The move will heighten a dispute over the future of the NBN and the impact on broadband prices after years of concern that selling the network would reshape competition, especially if Telstra emerged as the leading bidder.

Coalition communications spokesman David Coleman has blamed the government for letting the NBN increase its prices this year, setting up an election fight over broadband as part of the wider political dispute over the cost of living.

In putting the bill to parliament, Labor will lay the ground for a political attack on Opposition Leader Peter Dutton if he leaves any room for the privatisation of the NBN in the future.

NBN Co, the government-owned company that runs the network, increased its revenue by 4.4 per cent to $5.5 billion last financial year and is counting on customers upgrading to higher speeds to keep revenue growing over the next decade.

But it posted a net loss of $1.4 billion, compared to $1.1 billion the previous year, because of the high cost of investing in the network.

NBN Co had $42.5 billion in liabilities on its balance sheet at the end of June, including $26.9 billion in debt it took on to build the network. The company separately received equity investments from the federal government to cover the construction costs.

Albanese went to the last election with a promise to keep the network in public hands but the policy was never put into law.

Communications Minister Michelle Rowland wrote to NBN Co chair Kate McKenzie in July 2022 to set out the incoming government’s expectations for the network.

“The government has stated that it will retain NBN Co in public ownership for the foreseeable future, expand full-fibre access to more homes and businesses and to ensure the NBN delivers for consumers and facilitates productivity,” she wrote.

Industry analyst Paul Budde, an expert on the broadband market over several decades, has criticised political decisions about the NBN but cautiously backed the idea of privatisation if it could be done with strict controls to protect consumers. He also said the sale would depend on a decision by the government to write off the cost of the network.

“However, the market has changed,” he said on Tuesday. “What has become clear is that we are reaching some sort of maximum growth in telecoms. We see all telcos worldwide under financial pressure – their profits and revenues are declining and cost-cutting is the only way to stay profitable.

“All of this will have a major impact on a potential sale of the NBN. It will be nearly impossible for the government to recoup all of its money under such market circumstances, so delay is the only political way forward. A financial failure with privatisation would damage their position.”

Customers pay about $90 per month to major telcos for a “Standard Plus” service from NBN that promises download speeds of 50 megabits per second, with a speed of 17 megabits per second from 7-11pm.

The Coalition warned in July that families were paying too much because the government would not prevent NBN Co from increasing its prices, setting up a political dispute about pricing and the financial performance of the company.

“What the government, I think, wants to do is push people up on the higher cost plans or higher speed plans, so they can say they’ve increased the speed of the NBN, but the people who are actually paying for it are the majority of families,” Coleman said in July.

“Some people are switching away from the NBN because of the price increases.” Coleman was approached for comment on Tuesday.

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