[LINK] Ziggy on-side ...

Frank O'Connor foconnor at ozemail.com.au
Mon Apr 13 15:48:42 AEST 2009

Not a recommendation I would have looked for, but:

Ziggy backs $43b broadband network
Matthew Clayfield | April 13, 2009

FORMER Telstra boss Ziggy Switkowski has thrown his support behind 
the Government's proposed $43 billion national broadband network, 
describing it as "strategically elegant and appealingly breathtaking 
in its ambition".
Writing in today's edition of The Australian, Dr Switkowski says the 
Government's plan is both necessary and in the national interest.

"It has correctly identified a necessary program of work in critical 
infrastructure to help keep Australian industry competitive, to 
continue improving our standard of living, and to ensure fair 
distribution of benefits to the maximum number of people," he says.

The network, announced by the Government last week, will connect 90 
per cent of all Australian homes, schools and workplaces with 
fibre-optic broadband services with speeds of up to 100 megabits per 
second - 100 times faster than those now used by many households and 

It will be built by a new company specifically established by the 
federal Government to carry out the project, taking an estimated 
eight years to complete. The rollout will begin in Tasmania in June.

Dr Switkowski rejects claims the plan is inherently anti-competitive, 
and applauds the manner in which the network will allow competition 
to continue unabated in the telecommunications market.

"Its magnitude will in fact help establish a new environment for 
competition among re-sellers of fixed-line connectivity," he says, 
adding that because the Government's new network will duplicate the 
existing Telstra network, every home will now have a choice of at 
least two suppliers.

Dr Switkowski, who was chief executive of Telstra between 1999 and 
2004, writes that the proposal highlights the failure of the telco's 
outgoing management to engage with the Government, while presenting 
incoming management with an opportunity to start the relationship 

He says most negative responses to the plan stem from scepticism 
caused by more than 20 years of "allegedly poor decision-making by 
successive governments about telecoms policy".

Many of these concerns - be they about project management or the 
network's actual construction - are misguided and in many cases based 
on knee-jerk ideological positions.

"Some people remain philosophically opposed to any government 
involvement in commercial activities," he says. "Yet only government 
has the resources to undertake the rebalancing of a strategic 
industry to create a more open market, and probably only a Labor 
government would have the ideological conviction to go down this 

He nevertheless admits legitimate concerns exist in relation to the 
returns that the Government and taxpayers can expect from their 
investment. Normal commercial returns, he writes, are unlikely and 
"nation building", while a valid justification, is hard to quantify.

"But the juxtaposition of a $42billion package of near-term 
stimulation of our economy with a $43 billion investment in critical 
future infrastructure seems a good plan," he says.

Dr Switkowski's comments come admid warnings from consumer experts 
that people may have to pay at least $200 a month to use the network, 
while the Opposition is demanding proof that the national broadband 
network expert panel actually advised the Government to spend such a 
large sum of money on the project.
My comments:

a) Looking at the NBN as an stimulus package, an infrastructure deal 
and setting this country up for the future makes more sense than 
looking at it as a simple commercial communications project.

b) Applying commercial considerations in such a case raises questions 
as to why you don't do the same for roads, hospitals, schools and 
other infrastructure.

c) The NBN as planned now makes sense. The old version ... FTTN ... 
left us condemned to Telstra's expensive rented copper, with a last 
few yards that would probably never be completed, and with a 
broadband bandwidth target that would have been highly unsatisfactory 
when the NBN was completed in 5 years time.

d) In theory the new NBN will establish a level playing field for all 
providers ... which is way better than the original NBN and the 
situation that pertains now. Maybe we will finally see real 
competition (that for some strange reason the right wing idealogues 
obviously don't wish to see) in communications in this country.

e) My guess is that the charging models posited by the more 
ideological pundits will never eventuate. You can build it, but they 
may not necessary come if it doesn't provide value ... in other 
words, the market will set the prices, not the government.

f) Government can afford to set and accept non-commercial returns on 
infrastructure - hey they don't pay tax, they don't have to return 
dividends to investors etc ... and still make a profit. Hell, if the 
government charged 5% of the cost for 50 years they'd be laughing.


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