Google CEO: NBN will help Australians waste more time

Stan Beer
Friday, 18 March 2011 13:54

Opinion and Analysis

As Google boss Eric Schmidt knows, whenever he goes on the record about something as politically sensitive as Australia's $36 billion publicly funded National Broadband Network, it will get reported. Therefore, one has to wonder why he so willingly blurted out in an interview that the NBN will enable Australians to waste more time on YouTube.

One of the key charges from NBN opponents, primarily from the Federal Coalition, is that the main beneficiaries of the NBN will not be businesses, health service providers, or even consumers, but entertainment providers.

Mr Schmidt appeared to confirm this in an interview with the Sydney Morning Herald yesterday, even if the comment was buried and relegated to the very bottom of the article.

What Mr Schmidt said in response to a suggestion that the NBN is in Google's interests because it would mean more advertising revenue for the company was:

"'We're completely guilty of that charge. As a result of this broadband infrastructure, Australian citizens will be able to get information faster, and they will be able to watch even more YouTube movies and waste their time."

Over the past month, Mr Schmidt has been widely reported for being a strong supporter the NBN - and why wouldn't he be.

Google is a money making machine and virtually all of its $30 billion plus annual revenues are generated by advertising - search ads and Google ads on the millions of web sites of publishers and entertainment providers around the world.

Returning to the key charge from NBN opponents that the main beneficiaries of the NBN will be entertainment providers, such as YouTube, who will be able to provide richer and more readily accessible content to their viewers paid for by advertising, if you were the boss of the company selling the ads would you be a supporter of super fast broadband networks like the NBN?

According to Mr Schmidt, the Australian Government is showing leadership, unlike other governments around the world, by committing $36 billion of taxpayer funds to building the NBN. Mr Schmidt says it's better for our Government to do it rather than waiting for the private sector because then we'll have it quicker.

Well of course Mr Schmidt feels that way because the quicker the world gets super fast broadband funded by governments, the quicker Google makes more money without having to invest any of its own.

The fact of the matter is that Mr Schmidt has as much as admitted that the private sector is not interested in building these massive super fast broadband networks outside of geographically congested places like Japan and South Korea because it's hard to make it pay.

Therefore, governments should step in, according to Mr Schmidt, and build these massive super fast broadband networks over vast geographic expanses so that content providers - the entertainment industry - and the companies that sell ad platforms - Google et al - can line their pockets at taxpayers' expense.

Mr Schmidt is right though about one thing. Australia is taking a sort of global leadership role with the deployment of the NBN. No doubt countries around the world are watching us very closely to see if they can learn from our mistakes.

If we do manage to pull it off and make the NBN a resounding success, then other countries will follow suit and a global online entertainment revolution will ensue, making companies like Google even more fabulously wealthy and powerful than they already are. On the other hand, if the NBN turns out to be a taxpayer funded white elephant, then Google will just have to be content to continue making the handsome profits it does today.