NBN pricing has more to do with politics than economics

Sam Varghese
Friday, 23 September 2011 14:07

IT Policy - Government Tech Policy

Australia's proposed national broadband network has probably been written about much more than any other tech topic since it was announced. This probably indicates that the existing infrastructure is not really up to providing the kind of speeds that people need in this day and age.

COMMENT But most of the writing is political. And that's because the NBN itself is a political initiative, not one that takes pragmatism into account.

Let me make it clear right at the outset that I would love to have faster broadband - I live in a suburb 21 km from Melbourne city but due to the fact that the exchange is about 2-1/2 km from my house, the speeds I get are so low that often audio and video do not sync.

But that doesn't cloud my thinking about what is looking more and more like a pie-in-the-sky project. The latest moves in the NBN saga are no less political than all those that have occurred before. Given that the NBN will take at least another eight years to be built, how can any company offer prices for connections right now?

In Melbourne, only one suburb, Brunswick, is being wired at the moment. Very little has been done in other parts of the country too. Yet we have at least two broadband providers standing up with price lists that indicate it will cost the average Joe less to connect than what it does now.

I have yet to see - and here I stand to be corrected - a wildly enthusiastic comment from someone who has switched to the NBN where it is available. Yet, every other week, we hear that great evangelist, Reverend Stephen Conroy, preaching about how the network will revolutionise our lives.

The NBN has a grand budget of $43 billion. Around $27 billion of that comes from taxpayer funds - that's $27,000,000,000. Not a figure to be sneezed at but then most people cannot comprehend such a number.

What about cost overruns? The current government has shown itself to be only competent at one thing, shooting itself in the foot, and repeatedly at that. Let's not forget the pink batts, the rollout of computers in schools (no-one factored in the cost of servicing the hardware or electricity - sounds like something straight out of Fawlty Towers) and the repeated bungling of asylum-seeker policy.

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