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November 6, 2010
Jennifer Hewitt in her Fibre to the bootstraps: how Labor shackled its future to broadband in The Australian is at it again. Hewitt has long been an opponent of the national broadband, as has News Ltd. The latter's opposition is defence of its Foxtel pay TV interests from competition, as more and more TV and other rich interactive services come online.
I know that the debate on the NBN has become boring and tedious, but we need to be clear about the implications of the position Hewitt is defending in the guise of a big picture article that puts recent history into perspective. She says:
The $43bn promise also would prove to voters -- and to Telstra -- that the government really was serious. And just to make sure of that, Canberra threatened Telstra with all sorts of punishments such as forcing it out of Foxtel and cutting off access to wireless spectrum if it didn't co-operate.The political strategy worked brilliantly. The voters were dazzled by the digital future and the magic pudding promise it wouldn't really cost them because there would be a commercial return to government.
We have a "magic pudding" and voters being dazzled rather than an enabling technology in which informed consumers can see diverse opportunities in an information economy.
Hewitt's position is this: many people in cities already have "high-speed broadband" that is adequate for their needs, even if others in outer urban and rural areas are frustrated; that public policy should try to overcome problem areas and leaving the market and competition to sort out the rest; that there will be breakthroughs in alternative technologies such as wireless and cable to overcome the current spectrum limits.
Hewitt's implied judgement is that the national broadband network is not commercially viable as most households will initially take the lower cost package of 20Mbps (wholesale price of about $30 to $35 a month plus retail margins) rather than the more expensive of 100Mbps (wholesale price of about $80 a month plus retail margins).That claim ignores that the NBN is a utility - analogous to baseload electricity infrastructure with pricing based on regulated rates.
Hewitt is basically arguing on behalf of the Coalition's position in its attempts to "kill off" the national broadband network. The Coalition's position, as stated by Malcolm Turnbull, is that nobody needs more than 12Mbps. Turnbull says:
You tell me, what are the great productivity enhancing applications that cannot be accessed by 12Mbps broadband? The only thing that will drive high speeds for residential usage... is going to be bigger and bigger files. And that can really only be higher and higher-definition video. You've then got to ask yourself, should the taxpayer be spending $43 billion when we know there are so many infrastructure demands where there is a screaming need now.
The Coalition's position basically the status quo refined. David Braue response is this:
From one perspective, Turnbull is correct: no one user currently really requires over 12Mbps downstream. But what he is not talking about is the upstream speed, or the massive logjam that would occur if two people in a house with a 12Mbps connection tried to use 12Mbps services at the same time. Or if someone in that house is watching HDTV over their new FetchTV service. Or if, heaven forbid, two people are watching different channels at the same time. Or if — as is the case in one third of all Australian households — the home is hosting a small business with real business requirements and expectations.
Turnbull, in arguing for the status quo, would leave us with woeful upload speeds that limit home and business users' participation in emerging online information economies. The Coalition is quite happy with this state of affairs.
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to be fair Shadow Communications Minister Malcolm Turnbull has said that a split of Telstra is long overdue and his personal preference is for a structural separation.
That's a sharp difference from noises in the Opposition in the last term of government, when Nick Minchin said such a split would be unfair on Telstra shareholders.