[LINK] PM’s national broadband plan really is no net gain

[David Boxall]

The NBN doesn't impress Chris Berg (of the the Institute of Public 
Affairs <http://www.ipa.org.au/>). As with most things political, I too 
get less impressed as time exposes the details. Still more so than Chris 
(market fundamentalist bias notwithstanding), but less than I was.
<http://www.smh.com.au/technology/pmx2019s-national-broadband-plan-really-is-no-net-gain-20090802-e5re.html?page=-1>
>
> Has there ever been a major Commonwealth program more hastily 
> conceived than the national broadband network?
>
> After it was clear their previous $4.7 billion broadband plan was a 
> dismal failure, it was reported Kevin Rudd and the Communications 
> Minister, Stephen Conroy, dreamt up this $43 billion plan while on two 
> flights between Sydney and Canberra in April.
>
> That’s not just policy on the run. That’s policy desperately sprinting 
> from a horde of angry zombies while trying to pretend that the bite 
> mark on its arm is nothing to worry about.
>
> This latest iteration of the great broadband plan is three months old 
> and already behind schedule. The Tasmanian leg – supposed to be 
> available to consumers from this month – has been pushed back until 
> mid-2010.
>
> The project’s conception is still at an embarrassingly early stage. 
> The Government’s financiers haven’t yet been consulted about exactly 
> how the funds for the project will be raised, as a Senate committee 
> heard last month. It’s veiled in secrecy. The Government has told the 
> Opposition they’ll have to cough up $24,000 to see the documents which 
> were supposed to have recommended the Government build the network.
>
> And, unsurprisingly for a project entirely developed by two career 
> politicians in the brief time while the seatbelt sign was off, the 
> broadband network’s business case is supremely flawed.
>
> The economist Henry Ergas has calculated it would have to cost 
> individual subscribers at least $215 a month for the network to pay 
> off its investment, and only if almost every broadband customer in 
> Australia – 80 per cent – signs up.
>
> Furthermore, the Government is discovering to its surprise that it 
> can’t untangle the telecommunications industry’s dense knot of 
> competitive rivalries and regulatory quagmires just by waving around a 
> giant novelty cheque.
>
> Yet to argue that the great broadband plan is perhaps just a tad 
> undercooked is to invite accusations of Luddism. This seems to be 
> because a lot of people view the broadband network as less an 
> infrastructure project, and more the first tranche of broad social and 
> economic revolution – the opening set-piece for the utopian-sounding 
> "digital economy".
>
> So we’re repeatedly told it is a tragedy that Australia’s broadband 
> take-up rates are somewhat lower than in other developed countries 
> like Korea, because … well … think of all the cool things you can do 
> online!
>
> For these supporters, the technicalities of the national broadband 
> network are just technicalities – what really matters is the 
> internet’s sheer awesomeness.
>
> So, fittingly, the Communications Minister’s pronouncements about 
> broadband are rarely little more than a checklist comprising of a few 
> key terms: "smart infrastructure", "digital education revolution" and 
> the more mundane "mobile banking".
>
> Those are all wonderful, of course. Who isn’t looking forward to 
> "e-Government"? But most e-Gov ideas are usually either stunningly 
> obvious (such as more government information being provided online) or 
> fashionable but pointless (the vapid, machine-written "blogs" of 
> Stephen Conroy and Kevin Rudd).
>
> Another commonly cited benefit from the Government’s broadband plan is 
> its potential to revolutionise Australian hospitals with "telemedicine".
>
> But hospitals have been the recipients of a decade’s worth of special 
> government programs to deliver them the best internet available. It 
> seems silly to have to point this out, but Australia’s hospitals 
> aren’t on the same ADSL plan the rest of us are.
>
> Sure, your internet connection might have frustratingly capped just 
> before you finished downloading that handicam copy of /Transformers/. 
> But that doesn’t mean surgeons at St Vincent’s have to wait for 
> another doctor to finish downloading x-rays before they can start the 
> next heart bypass.
>
> The most common argument for government-sponsored broadband is 
> productivity. But the national broadband network isn’t going to be a 
> magical productivity switch. There just aren’t many potential 
> Australian entrepreneurs having their innovative business plans 
> stymied because their broadband isn’t fast enough. Some businesses 
> might find a faster internet connection useful, but few people 
> seriously think our present internet speeds are what’s holding the 
> economy back.
>
> Anyway, our hunger for ever-greater productivity might be better 
> satisfied by allowing the private sector to build the network. (As 
> much as four years ago Telstra was begging the government for a 
> regulatory reprieve so it could build a new broadband network by itself.)
>
> Hell, if it’s productivity we want, perhaps the Federal Government 
> could just reduce a few taxes. That’d give the economy a bit of a 
> kick-along.
>
> Of course, faster broadband for everybody would be delightful. But so 
> would government subsidies for sunshine, flowers and walks on the beach.
>
> Just because everybody loves the internet doesn’t mean that this $43 
> billion government-owned national broadband project is good public policy.
>
 
-- 
David Boxall                    |  My figures are just as good
                                |  as any other figures.
http://david.boxall.name        |  I make them up myself, and they
                                |  always give me innocent pleasure.
                                |                     --HL Mencken