Mainstream broadband lifts Labor fortunes

James Riley
Thursday, 12 August 2010 17:55

Opinion and Analysis

After a difficult start to the re-election campaign, Julia Gillard and Federal Labor are back on the front foot, and they can thank the stark policy choice being offered by the major parties on broadband for the leg-up.

Whatever you might think of its cost, the Government has a far better broadband story to tell. And it's a more believable story too.

Since the launch of its ill-conceived alternative broadband policy on Tuesday, the Coalition has been back-pedaling. They simply do not want this issue to get the oxygen it has consumed in the past three days.

There is a credibility issue. For a start, Coalition leader Tony Abbott did not launch the opposition's alternative plan, preferring to leave it to his Finance spokesman Andrew Robb and Communications spokesman Tony Smith (A $6 billion policy and the leader is absent?).

By contrast, the Prime Minister Julia Gillard is now talking up Labor's National Broadband Network at every opportunity.

And when the PM talks about broadband, she talks about it as a central component of Labor's economic policy.

It is about job creation (during the construction phase) and it is about job creation (for information industries in future.) It is about productivity improvements. It is about education and it about healthcare.

It is hard not to notice the gaping hole in the Coalition communications policy, regarding structural separation. And it is largely for this reason that policy has been almost universally panned by the ICT sector.

Mr Smith says the Coalition remains opposed to the structural separation of Telstra. And while it says it will spend billions building an open access fibre backbone network to sit alongside Telstra's, it does nothing to address the last mile bottleneck.

While it says it will empower the ACCC to set prices for the open access network, unless it wrests the last-mile choke-hold Telstra has on the sector, Australians will continue to pay more for inferior services.

Without this structural change, Telstra will continue to dominate the sector to the detriment of the consumers.

If Labor gets over the line on August 21, it will be the policy differentiation that the NBN has delivered that will have played a major part.

For the technology sector, the NBN is just the first part of a two part question. There remain questions of industry development, and how the Australian ICT sector can best leverage the investment in a national optical fibre network.

Surely, with an investment of this size, Government should be setting up schemes that leverage the NBN - whether that is through targeted tax breaks or a dedicated project fund through Infrastructure Australia for software developers building innovative new services that will run on the NBN.

While Government's generally have shied from trying to pick winners in terms of innovation policy, surely a $43 billion investment creates special circumstances?

Australia's talented IT sector should be given every encouragement to develop the high-bandwidth applications in business, health and education - applications that leverage our broadband investment.