[LINK] Why privatise the NBN?

[David Boxall]

Psychosois is characterised by a loss of contact with reality. Repeating 
behaviour in the expectation of a different outcome is said to indicate 
mental illness. We tried privatisation with the copper and mobile 
telecommunications networks. Judge for yourself how well that worked. 
For this phenomenon, I've coined the term "Privatisation Psychosis".

I reckon it's pretty clear that, for natural monopolies, privatisation 
simply doesn't work. Where the natural monopoly is an essential service, 
I believe that privatisation should not be legal. Any entity that 
participates in a privatisation deal should be on notice that the asset 
will eventually return to public ownership and they probably won't make 
a profit on the deal.

<http://www.smh.com.au/business/nbn-worth-27-billion-despite-56-billion-construction-cost-says-pwc-20160217-gmwbd5.html>
> It's a question of perspective. From a commercial perspective, the NBN 
> (and telecommunications in Australia, in general) are not profitable. 
> That's why no networks have been built in Australia without government 
> intervention (beyond some cherry-picked markets). It's also why the 
> copper network degraded so badly after privatisation. Proper 
> maintenance simply wasn't commercially viable.
>
> This article is a case study in why privatisation of the copper 
> network was foolish and doing the same with Malcom's Muddle (the sorry 
> remnants of the NBN) would be insane.
>
> "The national broadband network will only be worth $27 billion when it 
> is complete ...". Commercially, that may be true, but what is the 
> value of high-capacity telecommunications to the nation?
>
> "The auditor said selling and privatising the NBN would likely lead to 
> a 5 per cent increase in productivity ...". What is the potential if 
> the infrastructure remains in public ownership and continues to be 
> developed?
>
> "The NBN is meant to be completed by 2020." Is the network truly 
> complete before every premises is served by optical fibre?
>
> ""The unprofitable parts like [the] satellites could remain in 
> government hands while the other stuff with better multiples could be 
> sold," they said. "All the cost is in the rural areas but none of the 
> revenues are in the rural areas."" This is known as "privatise the 
> profits; socialise the costs". To my mind, it's fraud against the 
> taxpayers.
>
> The view of commerce is very short. Optical fibre lasts a long time. 
> Fibre that's been in service for more than forty years is reportedly 
> showing no signs of degradation. For comparison, copper typically 
> begins to degrade markedly after thirty years. It's generally accepted 
> that fibre will probably serve for a century or more.
>
> Fibre is also cheaper than copper, it consumes less energy and needs 
> less maintenance. Over the short term, none of this matters very much. 
> Clearly, a longer term perspective will serve the nation better.
>
> Over the longer term, fibre is extremely cost-effective. I'd be very 
> surprised if, over it's prospective service life, the cost of 
> implementing fibre to every premises on the mainland doesn't average 
> out to less than $1 per premises per week.

-- 
David Boxall                    |  In a hierarchical organization,
                                |  the higher the level,
http://david.boxall.id.au       |  the greater the confusion.
                                |                     --Dow's Law.