Both Sides Fail On Broadband

August 20, 2010

I’ve purposely kept out of politics here on my personal blog during the election campaign (ok, so I have Twitter and Facebook for that) but with one day left before the election I wanted to reflect on the great disappointment that is both major parties in Australia on broadband.

On one hand, we have a big spending Labor Government who wants to spend $5000 per person rolling out fibre to the home for 93% of Australia, while creating a new uber-Government controlled monopoly.

In the Liberal Party we have….um….how does one describe their NBN policy: words like bizarre, arcane, and wacky come to mind. Spokesman Tony Smith is possibly the only politician in Australia with the ability to make Stephen Conroy look good, and the weird obsession with wireless beggars belief.

On the balance, the ALP policy is the better of the two evils, but it is an evil.

The reality of high speed internet in Australia today is over 1 million homes in Melbourne alone have had access to high speed fibre for over ONE YEAR, and yet it was never switched on. That’s fibre rolled out by private enterprise (in this case Telstra.) It was never switched on because of uncertainty caused by the NBN.

Both Telstra, and Optus are/ were rolling out high speed internet along the east coast, but now the NBN has either stopped that, or slowed it greatly.

Yep: the Government’s push for the NBN has actually SLOWED access to high speed internet. Go figure.

Big Brother

The primary problem with the Government’s NBN proposal comes down to two things: their exclusive involvement, and the cost of the network.

This is a Government with a history of mismanaging projects.

History shows us that Government monopolies rarely offer the best service. I’m old enough to remember Telecom Australia….and if you can remember them as well, I don’t need to explain the point.

Sure, the counter argument is that private enterprise won’t provide universal (or near universal access) but it can and would provide it to many homes in the Capital cities. Better still, in many cases private enterprise would compete against itself, driving efficiencies a Government monopoly can not provide.

But the Liberal Party has gone extreme the other way. If a social objective is to provide near universal access with superior technology (that is, fibre) you can’t completely leave private enterprise to do it themselves. I’d also argue that you shouldn’t be subsidizing private enterprise in metro areas either, which the Liberal Party proposes to do: there’s a case for Government subsidy in regional and remote areas, or even NBN like Government provision of services to those areas as a social aim of high speed access, while leaving private enterprise to compete in the cities.

But problem remains that neither party seems to be able to embrace the middle ground.


One key aspect to any broadband policy must be the structural separation of Telstra, but again both sides fail. The Labor Party supports it (and rightly so) but what point is there of splitting Telstra up only to replace the Telstra copper network with a Government owned fibre monopoly? Doesn’t that defeat the purpose?

The Liberal Party opposes the split, and I’ve never understood why other than this weird argument that well…they sold Telstra as one package, and it should stay that way. Of note, it never stopped the New Zealand Government, who a year or two ago split the privately owned Telecom NZ…and the world didn’t come to an end in NZ.

The only way to truly encourage proper competition in broadband is to open up access to Telstra’s exchanges and pipes via splitting Telstra so the wholesale arm treats all comers equally, and a Liberal Party that doesn’t see this doesn’t really support proper competition at all.

So now what?

As much as the ALP’s NBN policy is flawed, it’s the outcome of the two policies that would offer (hopefully) a better result for Australia. It’s just ashame that it will cause epic Government debt, cost 2-3x more than they think it will cost, and probably won’t be finished until 2020 or later.

8 responses to Both Sides Fail On Broadband

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