NBN Delay Sucks, But Rudd Broadband Plan Still Good News

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The government’s decision to make the National Broadband Network a private-public partnership is good news, even though it will inevitably delay the rollout even further.
We’ve been waiting since late last year for the government to announce who would build the National Broadband Network (NBN), one of the core promises made when it was elected in November 2007, which is supposed to supply high-speed broadband at a reasonable price to pretty much everyone. There’s been plenty of exciting sideline drama, including Telstra’s exclusion from the process, but not many people anticipated that at the last minute the government would ditch the original plan to have the network built by the private sector via tender.

Instead, the new plan is to form a public-private sector partnership, with the government owning 51% and hence having the upper hand. The preferred technology will be optical fibre, with potential speeds of up to 100 megabits per second.

The downside of this, of course, is that it means the protracted process of getting the network up and running will take even longer. The government estimate is seven to eight years, though NBN rollout in the original form was expected to take a similar length of time. It also means many more taxpayer dollars will be needed (the project is budgeted at $43 billion) — though given the current world financial state, that was probably an inevitable development. And it might be a nice contrast to have the government actually spend money on infrastructure after a decade or two of wilful neglect.

In the big picture this is an improvement — if only because it means that Telstra’s ability to effectively control Australia’s broadband communications infrastructure might be well and truly squashed. Most of the problems with Australia’s current broadband infrastructure stem squarely from the decision of the Howard government to privatise Telstra without making it give up control of the existing telephone infrastructure. That effectively gave Telstra control of the ADSL market for a time, a position it repeatedly abused through such consumer-unfriendly strategies as making it difficult for rivals to add their own equipment to exchanges, or only offering ADSL2 to customers in exchanges where rivals had already set up.

Of course, Telstra may well end up as one of the venture partners in this new deal. But if the rules are set up properly, that shouldn’t let it enforce a similar chokehold on the new network, which should be set up as a wholesaler, not a reseller. The plan to sell off the operation five years after it becomes operational might be a problem, but that’s not going to be an issue for close on 20 years.

At the moment, Telstra is largely relying on its Next G network to attract customers to high-speed data services, and if you’re happy with the costs, it is a nice option. But for on-premises access, ADSL and its successors are still the way to go for most of us, and having a network which any ISP can sell should give us a better deal.

That’s my take anyway. What’s yours? Share in the comments.

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