$43 billion FTTH Nation Building Network back to the future

Stan Beer
Tuesday, 07 April 2009 12:19

Opinion and Analysis

Those old enough remember the days when Telstra and Australia Post were one combined Federal Government authority called the PMG (Postmaster General). Under the control of the Government, the PMG built up the core of the extensive national communications infrastructure we have today. The $43 billion FTTH National Broadband Network is a welcome return to those days.

After years of wrangling, it has become apparent that the free market private enterprise approach to building a world class national communications infrastructure will never work. Private enterprise is great for many things but essential services and nation building aren't them.

So finally, in hard economic times which require decisive action, an Australian Government has bitten the bullet and decided to go for it.

The newly revised NBN is an ambitious project. FTTH is state of the art stuff and, at an estimated $43 billion (it may well cost more), it's going to cost us big time.

The Government will have to borrow and probably levy new taxes to raise the money. Some money will come from private sector telecoms industry investment and some will come through Government debt in the form of bonds.

Whatever the costs, however, they will be outweighed by the benefits. New jobs, new industries and new technologies will be created and deployed.

Australia will finally become a leader rather than a follower in ICT and broadband networking, no longer held back by the haggling of a dominant carrier trying to protect its profits. Instead it will have a publicly owned wholesale network provider with equal and open access to all.

The decision may even benefit Telstra in the long run by forcing it to become an innovator rather than a spoiler focussed on protecting its legacy assets.

If there is one worrying aspect of the Government's plan, then it is its conviction that it must sell off its majority ownership in the NBN "once the network is up and running". For that matter, why sell off any of the NBN at all?

We have already seen that private ownership of an essential services monopoly that is answerable to shareholders rather than the public doesn't work.

The NBN is going to be built mostly at the expense of taxpayers so it will need to stay in public hands. Let's not make the same mistake twice.