The National Broadband Network is a hugely expensive ($40B), fibre-to-the-premises (FTTP), wholesale network that will reach 93% of the Australian population over 10 years. Oh! And paid for by the taxpayers.
The Gillard Government has some numbers claiming that it will pay for itself in the long run. I don’t believe it will ever reach its return on investment of 7% if those numbers are ever audited in the same way private enterprise auditors operate.
I used to see it as a massive waste of money, that Fibre-To-The-Node (FTTN) was a more affordable but almost as good solution for one-third to one-quarter of the cost. I thought that Rob Oakshot and Tony Windsor held the nation hostage in order to get good internet in the bush first – a lower order national policy outcome.
I wasn’t wrong on any of those points. But I have a new perspective that makes them irrelevant.
- $40 Billion over 10 years is a drop in the bucket when it comes to the Gillard (and Labor) Government’s waste. In comparison, the Greens in 2011 stated that Australia’s offshore detention and border protection would cost over $2B in the next year alone. Those are the best numbers I’ve found on a quick search, but other media outlets published similar numbers.
- The copper network is obsolete. Patchwork repairs (like those over the last 30 years) will never see copper achieving anything close to the theoretical and technical optimums. There is no incentive nor financial return to Telstra to refresh the copper network.
- If you live in a multi-unit-dwelling or more than 500 metres from an exchange in a major city, and you want the fastest currently available broadband you already know the difference between the broadband speed you are sold and what you can consistently achieve. For those that haven’t tried it yet, it’s an intermittent and variable painful game of random chance.
Therefore if what we have is currently unusable, it doesn’t matter if we can save even $30billion by going FTTN, because the last mile of internet connectivity relies on the copper network which will never be fixed.
Worse for multi-unit-dwellings there is currently the endless game of pass-the-buck where the ISP blames the Telstra copper or your building wiring and nobody is responsible for providing your service. The NBN removes this debate for a significant and growing proportion of the population.
If you don’t believe governments are wasteful then the cost debate doesn’t matter. If you do believe governments are wasteful then the waste on the NBN is justifiable given the national productivity and long term infrastructure arguments.
What do you think?