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Wednesday, 09 February 2011 17:42

Economist Intelligence Unit takes a dim view of Australia's NBN

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The Economist Intelligence Unit's ranking of Australia's National Broadband Network as being among the laggards has been seized on by the Opposition and by commentators as a damning indictment of the project, but all it really reflects is the EIU's view that public money should not be spent on such projects.

The EIU has published the first of what it says will be a quarterly Government Broadband Index assessing the role of governments in various nations' broadband activity.

It's hard to get too much detail on the EIU's thinking without shelling out a cool three grand for the full report. There's an eight page executive summary that is pretty light on and a five minute video interview with the leader of the EIU's telecomms team, Ian Morris.


The executive summary is less than reassuring about the quality of the EIU's research. It says of Australia "Australian authorities have taken control of the national incumbent's existing fixed network and plan to fund, develop and operate a national fibre-to-the-home (FTTH) network, providing wholesale services on an open-access basis."

Australia is singled out for reprimand as "the country with the highest-profile and most controversial public-sector scheme [and which] falls in the bottom half of the index, mainly because it is spending a colossal 7.58 percent of annual government budget revenues on its National Broadband Network."

And to rub it in the EIU notes: "In South Korea, by comparison, the government is spending less than one percent of annual budget revenues to realise its broadband goals, achieving targets by encouraging the private sector to invest in the country's broadband future'¦Overall, the developed South-east Asian countries (Japan, South Korea and Singapore) are at the forefront of the move towards near-ubiquitous high-speed broadband. All three countries have official targets of providing 1Gbps services to more than 90 percent of households within the next two to five years."

Regardless of who is spending the money, it is far less costly to bring high speed broadband to a densely populated Korea than to Australia, but there is no indication that this hurdle has been factored into the EIU's rankings.

CONTINUED

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But what does influence the rankings is the extent of government involvement. As the executive summary says "Countries topping our index are the ones deemed to have the most ambitious speed, coverage and rollout targets, the most appropriate regulations for realising targets and fostering a competitive broadband market, and where public-funding commitments are putting the least amount of pressure on public-sector finances." (my italics).

(The executive summary does not say whether Australia has been marked down for not fostering competition at the infrastructure level).

In the interview the leader of the EIU's telecomms team, Ian Morris says: "We felt that plans that are spending so much taxpayers money should be marked down'¦It is much better to make these things work by regulation and by encouraging the private sector to make these investments. Hurling taxpayers money at this as Australia has done is not something we take a positive view of."

You can agree or disagree with this view but applying it to determine rankings that, on the face of it, are grounded in objective criteria is very misleading

Thus one report of the EIU study said the EIU's view of Australia's NBN was that it was the "ninth best on the planet" saying the EIU had made a "damaging assessment".

Certainly the Index will be used by the Federal Opposition and all those who oppose the NBN to inflict as much damage as possible. But on the basis of what little information is public about the Index, the EIU has done nothing more than throw its lot in with one side of what is now a very polarised and long-running debate around Australian Government broadband policy.

You can read more stories on telecommunications in our newsletter ExchangeDaily, click here to sign up for a free trial...


Economist Intelligence Unit takes a dim view of Australia's NBN
The Economist Intelligence Unit's ranking of Australia's National Broadband Network as being among the laggards has been seized on by the Opposition and by commentators as a damning indictment of the project, but all it really reflects is the EIU's view that public money should not be spent on such projects.

The EIU has published the first of what it says will be a quarterly Government Broadband Index assessing the role of governments in various nations' broadband activity.

It's hard to get too much detail on the EIU's thinking without shelling out a cool three grand for the full report. There's an eight page executive summary that is pretty light on and a five minute video interview with the leader of the EIU's telecomms team, Ian Morris.
http://www.eiu.com/public/topical_report.aspx?campaignid=broadband2011

The executive summary is less than reassuring about the quality of the EIU's research. It says of Australia "Australian authorities have taken control of the national incumbent's existing fixed network and plan to fund, develop and operate a national fibre-to-the-home (FTTH) network, providing wholesale services on an open-access basis."

Australia is singled out for reprimand as "the country with the highest-profile and most controversial public-sector scheme [and which] falls in the bottom half of the index, mainly because it is spending a colossal 7.58 percent of annual government budget revenues on its National Broadband Network."

And to rub it in the EIU notes: "In South Korea, by comparison, the government is spending less than one percent of annual budget revenues to realise its broadband goals, achieving targets by encouraging the private sector to invest in the country's broadband future'¦Overall, the developed South-east Asian countries (Japan, South Korea and Singapore) are at the forefront of the move towards near-ubiquitous high-speed broadband. All three countries have official targets of providing 1Gbps services to more than 90 percent of households within the next two to five years."

Regardless of who is spending the money, it is far less costly to bring high speed broadband to a densely populated Korea than to Australia, but there is no indication that this hurdle has been factored into the EIU's rankings.

CONTINUED

You can read more stories on telecommunications in our newsletter ExchangeDaily, click here to sign up for a free trial...



But what does influence the rankings is the extent of government involvement. As the executive summary says "Countries topping our index are the ones deemed to have the most ambitious speed, coverage and rollout targets, the most appropriate regulations for realising targets and fostering a competitive broadband market, and where public-funding commitments are putting the least amount of pressure on public-sector finances." (my italics).

(The executive summary does not say whether Australia has been marked down for not fostering competition at the infrastructure level).

In the interview the leader of the EIU's telecomms team, Ian Morris says: "We felt that plans that are spending so much taxpayers money should be marked down'¦It is much better to make these things work by regulation and by encouraging the private sector to make these investments. Hurling taxpayers money at this as Australia has done is not something we take a positive view of."

You can agree or disagree with this view but applying it to determine rankings that, on the face of it, are grounded in objective criteria is very misleading

Thus one report of the EIU study said the EIU's view of Australia's NBN was that it was the "ninth best on the planet" saying the EIU had made a "damaging assessment".

Certainly the Index will be used by the Federal Opposition and all those who oppose the NBN to inflict as much damage as possible. But on the basis of what little information is public about the Index, the EIU has done nothing more than throw its lot in with one side of what is now a very polarised and long-running debate around Australian Government broadband policy.

You can read more stories on telecommunications in our newsletter ExchangeDaily, click here to sign up for a free trial...



 

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