Costello budget rhetoric ignores broadband reality

By Adam Turner
Wednesday, 09 May 2007 10:14

Opinion and Analysis

Treasurer Peter Costello is living in a fantasy land if he thinks the private sector alone can be trusted to look after Australia's best interests in building the next generation of broadband infrastructure.

It's clear that if Telstra gets to build a Fibre to the Node network under its own terms, it will monopolise the infrastructure to the determent of business and consumers - just as it already does with the current infrastructure. Without some form of government intervention, Australia is doomed to be left at Telstra's mercy and become (even more of) an internet backwater.

The only way to stop Telstra holding Australia's broadband future to ransom is to break its vice-like grip on the country's communications infrastructure. This is what the opposition's plan would do, through creating a joint government/private sector venture to build the infrastructure. It's not a perfect plan, but at least it's a step in the right direction.

Never the less both Peter Costello and John Howard insist responsibility for creating any such new network falls completely on the private sector - which is looking more and more like being Telstra - rather than coming from the public coffers.

"There is no need for any little bear to get his paws on the Future Fund and put taxpayers' money into this," said Costello on radio today.

"Why should we use $2.7 billion that's been locked up for future generations, why should we use that to fund the provision of something that the private sector ought to provide in a normal market situation," said Howard in parliament recently.

The answer is to clear to anyone who isn't a politician - this needs to be done because the private sector continually botch up broadband because they're more concerned about what's best for shareholders than what's best for the country. Look at the cable TV/internet roll disaster of the 1990s. Look at Australia's current pitiful broadband speeds and plans compared to the rest of the world. The private sector clearly can't be trusted to look after the national interest.

Of course that's to be expected from private companies, by definition they need to put shareholders first. But Australia's broadband future is too important to be left to people who more concerned about making a dollar than doing what's right. The fact the Howard government refuses to acknowledge this doesn't bode well for any decision they're likely to make between now and the election. It's clear Howard intends to pull a broadband rabbit out of his hat during the election campaign, but if it involves handing Telstra control over a national Fibre to the Node network then it's very bad news for Australia.