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May 21, 2010
The Liberal/National party dominated Senate select committee on the National Broadband Network (NBN) has recommended scrapping the project in its Fourth Interim Report.
Now it is true that this project has been rushed ahead in the absence of adequate planning is well made. Examples of the Government's hasty approach are commencing construction of the network before receiving the implementation study and finalising the broad range of important issues the Implementation Study raises.
The justification for the majority taking this position of scrapping the NBN is simple one:
In the absence of a cost-benefit analysis proving to the contrary, the committee believes the NBN is not justifiable policy. Too much public money is at stake to be thrown away without transparent, accountable, independent assessment of the merit of starting, let alone progressing, the project.... All in all the committee does not accept that the Implementation Study, nor other evidence given to the committee, supports the NBN in its current form.
How then do they square this with those Australians who are crying out for a better telecommunications than the low grade, expensive one that we have now?
The majority report says:
The committee believes that there are better ways to provide fast broadband of a capacity and speed required by most Australians at a cost considerably less than the $26–43 billion suggested by the Implementation Study. The committee believes that by working cooperatively with the industry, a better arrangement could be implemented providing affordable fast broadband at an earlier time than is proposed by the NBN in its current form.
That means working co-operatively with Telstra? Whose kidding who?
How this market based approach will work to build a comprehensive fibre based national broadband network is not spelt out at all. We know enough about markets and telecommunications to understand that the model of fibre networks being rolled out by vertically integrated incumbents results in these incumbents cherry pick the most valuable customers leaving much of the rest of these countries with non-fibre solutions. So we have a digital divide.
What the Coalition's working co-operatively with Telstra refers to is the Telstra story--the future is wireless. So watch out NBN, whose shaky business case is based on rather heroic/wildly optimistic assumptions about penetration rates. Watch out because the iPhone is a game changer with respect to mobile broadband. There is going to an explosion in the amount of digitized data and applications, faster and more affordable mobile data prices, and more powerful devices. Smart phones are the future rather than wireless being only a small and complementary part of the broadband future.
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In their minority Report Labor senators Kate Lundy and Glenn Sterle, summarized the contradictions in the Liberal/National Senators position:
That's a pretty accurate account of the mess they've got themselves in.