After a decade of inaction by the Coalition, Labor is set to put the NBN back on track. Paul Budde reports.
*Also listen to the audio version of this article on Spotify HERE.
WHILE THERE IS still a lot that needs fixing, going into the new year, the basis for the NBN is back on a much better foundation. Just before the end of last year, Communications Minister Michelle Rowland released an extensive Statement of Expectations for NBN Co.
This basically brings the NBN policy back to its original state, as it was developed in the late '00s. At that stage, the then Labor Minister for Broadband, Stephen Conroy, worked out a plan for the NBN together with the industry. Through various technical and strategic working groups, some 400 people were involved in that process.
The overarching policy at that stage was to build an NBN that would benefit Australian society and the economy. The focus was on families, communities and businesses — 94 per cent of the population would be linked to a first-class fibre-to-the-home network. This would provide people across Australia, in cities, towns and most rural areas with the same level of quality broadband. Because the other 6 per cent was a rather small group, alternative technologies such as fixed wireless and satellite access would be able to also deliver that level of quality to people in remote areas.
With a change of government in 2013, the focus of the NBN dramatically changed. Rather than putting emphasis on the national benefits, the Coalition Government put the focus on maximising its investment in the NBN. Rarely during the ten years in office was there a mention of the social and economic benefits.
As with all infrastructure, it’s not its intrinsic value that matters but the enabling value. I don’t think that I am overstating it by saying that the enabling value of the NBN already is in the hundreds of billions of dollars. Just think how much worse off the economy would have been during the recent pandemic without the NBN. And isn’t the role of government to maximise the well-being of our society and our economy? It is very hard to justify that the previous Government put emphasis on its investment rather that on the national good.
Of course, the Coalition strategy started to fall apart long before it lost the Election. It had to backflip on an underperforming, second-rate NBN and had to admit that a proper fibre network was needed to rectify some of the problems. So, in the end, it seriously failed on its own conservative investment policy as the NBN started to cost more and more.
But it is no use crying over spilled milk and rather than following the strategy of the Coalition to blame all evil and the previous Government, the new Labor Government simply started to look ahead and is rectifying the situation as much as possible.
This strategy included:
- large investments for upgrades from Fibre to the Node (FttN) to Fibre to the Home/Curb (FttH/C) being committed;
- an indirect write-down of the NBN losses; and
- a Statement of Expectations (SEO) bringing the policy back to where it started 15 years ago.
From a political perspective, I believe that it is good for a country to have both progressive and conservative inputs. Wrecking policies is totally counterproductive. When the Coalition came into power, I had a meeting with the incoming Minister for Communication, Malcolm Turnbull. I argued for changes to the way the NBN could be rolled out – spreading its costs over a longer period, keeping the HFC network going for longer and so on – in order to facilitate a more conservative perspective. This instead of what then Prime Minister Tony Abbott suggested: “Kill the NBN.” All at no avail, party politics took over from rationality.
The SEO is not just a fluffy feelgood document, it talks about the need for the company to operate commercially and that the Government wants to see debt repayment. However, it states that the Government understands that not all investments can provide a commercial return. The Government puts an emphasis on regional, remote and First Nation community communication, an obvious area where there is little hope for a commercial return.
Other social obligations will also add to extra costs. In all those circumstances, the Government wants to sit down with NBN Co, go through those issues and find mutually acceptable solutions. I think that is a very sensible approach. You can’t operate a company commercially if it is burdened with all sorts of social costs and the Government will have to take responsibility in those cases.
So, after a decade of political footballing, the NBN is back on track to take up its original role, an infrastructure project for the social and economic benefits of all Australia. A pretty good start for the NBN at the beginning of the new year.
*This article is also available on audio here:
Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.
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