Australia's $43bn for fibre to home

Thank goodness the government is improving their plans!

I'd been following the National Broadband Network (NBN) plans with a sickening feeling that the Australia taxpayers (of which I feel I'm an over-contributing member) were about to flush a big chunk of money down the drain.

As mentioned in the MIS article, 'Gobsmacked' at $43bn plan , it's heartwarming to see the revised plan actually delivers the speeds necessary to people's homes (not just to the nodes).

Whilst not as sexy as space exploration, this is exactly the sort of project I blogged about in Today's moon shot in terms of farsighted spending that drives jobs and propels us forward as a country. In fact, it's far better news that the previously announced stimulus package. Providing the infrastructure we'll need as a nation to participate and compete globally is, with out a doubt, a worthy expedition.

Readers of The World Is Flat will reflect on how this sort of enabling infrastructure allowed India to join the global services sector in such a spectacular fashion. For a reminder of how important broadband is to our future, [re]read Shift Happens - Globalization and The Information Age. The information superhighway is to today's (and tomorrow's) society what railways and roads were to our parents and grandparent's era.

I'm also a big fan of the ownership structure for this project. As outlined in the MIS's article $43bn for fibre to home, taxpayers will own this infrastructure (the wholesale network) for a short period of time, rather than doling out money to private sector.

This is exactly how the Howard government should have handled the original Telstra privatisation. The original 50% ownership should have been the wholesale network with the remaining 'sale' (T1 & T2) being the retail operations and a 10 year contract to technically maintain the wholesale network. This model would have ensured the taxpayer could contract to multiple retailers and thereby ensuring we had competitive services or creating a monopoly for such a vital piece of infrastructure. Interestingly, the rumours of Telstra reviewing it's own structure have resurfaced, most recently in this Sky News article Telstra considers break-up for NBN.

I'm not a fan of the government selling this stake after 5 years. I'm struggling with figuring out who they would sell it to given that it is intended to be an open access network. I guess they would issue shares in the entity itself, but this is likely to recreate the issues that plague Telstra today. Any organisation accountable only to shareholders (not taxpayers), will not have a political agenda, rather, their agenda will be to maximise profits.

Image by Peter Butler


posted by Lee Gale @ 4:22 AM,


At April 14, 2009 11:38 PM, Blogger Lee Gale said...

Sure to bring a smile to your face, checkout Nick Hidge's speculation here:

At April 22, 2009 3:16 AM, Blogger Gabriel said...

the NBN is an ambitious project and FTTP future proofs the broadband investment. however, i have concerns about the timeframe and whether australia will be up there with the OECD countries speedwise when its completed after that many years.


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