[LINK] The NBN, seven years later

[Stephen Loosley]

The policy rationale behind a national broadband network is two-pronged. 

The first is a broadband infrastructure that ensures that Australian homes and businesses have broadband at a level that does not limit the national competitiveness compared to its trading partners. The second is to ensure that this broadband service is universal.

At the end of March 2015, there were 389,000 premises actually connected to the national broadband network. That’s not a lot to show for a process that started seven years earlier.

There are a few approaches that Parliament could take that would actually reflect the rapid changes in technology and the cross-subsidisation issues. The first is that the statement of expectations should not be based on bit rates in election years. Far better to follow the approach pioneered by David Murray in the Financial Systems Inquiry and have a target that moves with either the OECD or, and this is a much tougher ask, in line with our major trading partners.

The second is a rationalisation of universal service. It does not make sense to mandate that NBN Co should be the wholesaler of last resort in remote areas and Telstra is the retailer of last resort and then to require that both use different delivery technologies.

The third is to provide those subsidies that are needed for the rationalised universal service from consolidated revenue, rather than in the form of cross-subsidies from metropolitan areas. Once this is done, the final approach is logically to target government subsidies at the under-served suburban and regional areas where current broadband access is poor. In this environment, it will not matter that TPG has a better fibre-to-the-basement solution than NBN Co; there will be no need for special licence conditions. Instead, just let the market do its job. If this means that we end up with FTTP networks deployed by Telstra and others because people want to watch more than one Netflix ultra-high-definition streaming service, then intervention by government will be fruitless.


http://www.crikey.com.au/2015/06/01/how-can-we-fix-the-nbn/