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Monday, 02 August 2010 14:33

Could Tony Abbott unscramble the NBN egg?

By

All the momentum in this so far tedious federal election campaign has been Tony Abbott's, delivering opinion polls suggesting for the first time that he is a real chance of becoming Australia's next Prime Minister - and that the Coalition can make good its promise to scrap the national broadband network.


Voters are well aware that campaigns are full of hollow pledges and empty promises. But they also know it's the promises of inaction that ring true, the promises to cancel programs that always seem first to be put into effect.

But could Tony Abbott realistically pull apart a national fibre roll-out that has a considerable momentum of its own through the ambitious efforts of the NBN Company and its energetic NBN Co chief executive Mike Quigley.

Well, yes he can.

This is not the impossible challenge Kim Beazley talked about prior to the 1998 election when he said "you can't unscramble and egg" in relation to the GST once it was imposed.

Tens of millions of dollars has been spent across Australia and across the economy - by small business, local councils, state governments, educations institutions, utility companies and multinational giants alike - to prepare for opportunities that would derive from high speed fibre.

Huge additional sums have been spent by the communications sector, both potential suppliers to the project in preparing to tender, and by those service providers who will use the network.

Construction companies have been tooling up and spooling up for the biggest (geographically and monetarily) job many some will ever see.

And, of course, there is the NBN Company itself, well advanced after just one year, both in building the commercial infrastructure of a large, complex business operation and in building the network itself. From the state of the art network operating centre in Melbourne to the early roll-out in Tasmania to the fibre in the ground around Australia, the project has moved quickly.

But the NBN policy is by no means embedded. The egg is not yet scrambled, the roll-out can be halted with relative ease, the ubiquitous fibre policy dismantled.

No-one knows this better than Communications Minister Stephen Conroy who warned an Australian Information Industry Association luncheon last week that given the threat to halt the NBN, a change of government could 'wreak havoc' on the biggest micro-economic reform of the past decade.

"If we win this one, the NBN will be unstoppable. It is almost unstoppable now, but if we lose the election Tony Abbott could wreak havoc," Senator Conroy said.

"In three more years time, as we have pulled the copper out of homes to connect to fibre, there (would be) no turning back."

This issue is not just about the network.

The larger portion of the havoc Stephen Conroy is referring to is the restructure of the industry, the better consumer protections, the increased competition that comes hand in hand with the construction of a wholesale-only 'level playing field.'

In the absence of a Coalition broadband policy that will replace the NBN/Telstra reforms - which is extraordinary in itself this close to an election on an issue as fundamentally import as this - the very real concern for Australia is that the industry reforms are off the table.

The Coalition has been the best friend Telstra ever had, both in Government and in opposition. It has in the past year used every procedural trick in the book in the Senate to block and delay the regulatory reform legislation.

The legislation still has not been passed. (Incidentally, the Coalition argument that it was standing up for the rights of mum and dad Telstra shareholder rang a little hollow once Telstra had entered an agreement with the NBN Co and Government over the closure of its copper network.)

While Tony Smith has said the Coalition was sympathetic to the need for industry reform, he has offered no detail on what that reform would look like and how it would be implemented.

In the few comments Mr Smith has made on canning the NBN project, he has said simply that the Coalition would offer a better broadband plan for Australia that would cost taxpayers less and would unveil it some time during the campaign.

No detail about the technology, the financing, the footprint, the timetable, and most critically, not detail about how the plan effects the regulatory reform the Coalition says it is sympathetic to.


This is a genuine problem that has everyone in the telco sector - perhaps excluding Telstra - terrified. It would be just plain bad news. For consumers, for businesses, for the economy.

Competition in the telecommunications sector has staggered along for 25 years, since the original industry deregulation that left the incumbent - Telstra - as an integrated wholesale/retail and service/infrastructure goliath.

Governments from both sides of politics have perpetrated this original structural issue with failed attempts at short sighted fixes. For both sides of politics, reform was simply too hard politically and practically.

Once the T3 sale went through in the final term of the Howard Government - when the Australian Government shareholding fell below 50 per cent - any chance at root and branch regulatory reform had passed (and many said was now impossible.)

The Telstra agreement with Government six weeks ago to structurally separate voluntarily put the Australian industry on the cusp of extraordinary and fundamental regulatory change. These changes would have direct and immediate benefits to Australian consumers and to the economy.

When Kevin Rudd, Wayne Swan, Lindsay Tanner and Stephen Conroy announced its $43 billion NBN fibre to the home policy, they also issued a discussion paper on regulatory reform for the sector.

The paper put serious reform on the table for discussion. But it's fair to say the paper was received by much of the industry as a wish-list of pie-in-the-sky changes (including the structural separation of Telstra) that had little or no chance of being achieved.

The telecommunications reforms that have been stifled in the Senate, together with the historic Telstra agreement with government, delivers on all of those industry competition and efficiencies that has eluded policy makers for decades.

It is among the best examples of the unscrambling of a policy egg you will find anywhere in Australian public administration.

It is galling that the Coalition would put itself before the Australian people seeking government without even paying lip service to

It is one thing to punch a hole in the NBN Company and sink it without a trace. But developing and explaining a credible alternative policy that doesn't also sink the chances of historic industry reform is quite another.

Not even addressing the issue three weeks out from a federal election is unbelievable.


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