Sarah Dingle reported this story on Friday, March 22, 2013 08:15:00

ELIZABETH JACKSON: Opposition spokesman Malcolm Turnbull has accused the company building the national broadband network (NBN) of becoming a political organisation.



His comments come after the head of NBN Co, Mike Quigley, chose to announce significant delays to the rollout of the national broadband network during yesterday's turmoil in Federal Parliament.



The industry group representing major internet providers in Australia is worried that any delays to the rollout will give Telstra a significant market advantage and the Communications, Electrical and Plumbing Union says the construction tenders have been mismanaged from the start.



Sarah Dingle reports.



SARAH DINGLE: While Labor politicians were doing the numbers, the company building the National Broadband Network announced some shuffling of its own.



Instead of having fibre rolled out to 341,000 premises by the end of June, at least 100,000 homes will have to wait longer.



The head of NBN Co, Mike Quigley, denied that the timing of the announcement had anything to do with the media frenzy in Canberra.



But the opposition spokesman for communications Malcolm Turnbull says timing is everything.



MALCOLM TURNBULL: They thought they could be so smart and take the garbage out under cover of a Labor leadership spill. That's not how responsible businesses operate. That's how people try to play political games.



SARAH DINGLE: NBN Co says the reason for the delay is one of the construction contractors, Syntheo, has been too slow reaching its targets.



Syntheo is a joint venture between Lend Lease and Service Stream and was contracted to build the NBN in Western Australia, South Australia and the Northern Territory.



Now it's been told to focus on the two states while NBN Co itself will take over in the NT.



PETER TIGHE: I suppose the one thing that we could say is "well, we told you so".



SARAH DINGLE: Peter Tighe is the national secretary of the Communications Electrical and Plumbing Union.



PETER TIGHE: They've looked for a cheaper option and engaged a company that could not provide the quality of construction services that a major contractor would provide.



SARAH DINGLE: In 2011 NBN Co suspended its first tendering process for construction, telling companies their proposals were too expensive. Peter Tighe says that eliminated some of the better candidates.



PETER TIGHE: The second time that they sought for further expressions of interest a lot of major companies said well, you know, once bitten, twice shy. And not being critical of Syntheo but it was a joint venture established specifically in my view for the rollout, didn't play into the hands of NBN's requirements in relation to a very quick rollout that was quality assured.



DAVID FORMAN: I would imagine that there'll be a few people in the telecommunications construction industry who are having a quiet chuckle today.



SARAH DINGLE: David Forman is an adviser to the Competitive Carriers Coalition, a group which includes major internet companies keen to capitalise on the NBN's infrastructure.



Mr Forman says any delays to the rollout prolongs Telstra's current market power.



DAVID FORMAN: As the NBN rolls out, that's the means by which Telstra becomes structurally separated. And that's been the big issue for competitors, to remove that source of market power of Telstra's where they own the phone line into everybody's home, the same line that all competitors have to use.



SARAH DINGLE: Opposition communications spokesman Malcolm Turnbull says if elected the Coalition will re-examine the construction contracts for the NBN, including that of Syntheo.



MALCOLM TURNBULL: Well I'm working on the assumption that we will comply with all the contracts. That's the only responsible attitude to take.



SARAH DINGLE: So Syntheo will continue to construct in Western Australia and South Australia?



MALCOLM TURNBULL: I'm not saying that. I'm just saying as a general principle, contracts will be complied with. I mean it may be that Syntheo for example is in breach of its contract. It may be its contract can be terminated lawfully.



SARAH DINGLE: In a statement the Communications Minister Stephen Conroy said the NBN Co delays were a short term challenge in a 10 year infrastructure project which will be overcome.



ELIZABETH JACKSON: Sarah Dingle with that report.