September 23, 2013
The Coalition's return to power means the end of the National Broadband Network.
The Abbott government has flagged at least three examinations into broadband: an independent audit of NBN Co's books, a review of its commercial progress and a Productivity Commission inquiry into broadband policy.
However, it doesn't mean that Australia's broadband future remains open to interpretation. We know that Labor’s nation-building, wholesale infrastructure model has been dumped in favour of the Coalition’s private sector-friendly, market-driven approach. There are two implications of this.
Firstly, the Coalition's policy is to change the current fibre-to-the-premises to a fibre-to-the-node model. The copper network represents the cornerstone of the Coalition's $30bn policy. So two-thirds of the connections to premises will be copper instead of fibre.
This will make the network cheaper to build the archaic, degraded copper technology will be a lot slower for consumers. The last-mile copper is in a bad state and therefore unsuitable for applications like Telehealth owing to reliability issues.
Secondly, that competition will happen in the provision of the broadband network: Telstra will be allowed to operate its hybrid fibre-coaxial cable in competition with the NBN and TPG Telecom will connect fibre to capital city apartment buildings and office blocks in inner urban areas. The implication is that a cut down NBN Co would take care of the unprofitable regional and remote areas, whilst the telcos would be free to build competing “open access” fibre networks in urban areas.
Admittedly, there will be delays as the current Senate is unlikely to support the government’s plans for change to the current NBN. So the status quo is likely to remain until the new Senate begins sitting in July 2014.
The broader consequence is that the drivers for a broadband-led shift away from an economy reliant on mining and agriculture to one that rests on a mixed commodities market, premised on innovation enabled by technological capabilities have been seriously undermined.
The Coalition does not accept that broadband is a critical utility for the future economic growth and social development of Australia. Their view is that the long-term economic health of the Australian economy is dependent on an unsustainable minerals boom; not on the the transition to a knowledge-based economy based on the nation's ability to become a country of highly-educated knowledge workers.