NBN Delay Sucks, But Rudd Broadband Plan Still Good News

NBN Delay Sucks, But Rudd Broadband Plan Still Good News

glowingfibre 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.


  • this is a much better solution than 100% private. as long as the government of the future doesn’t screw it up again like it did when it privatised the *infrastructure* now belonging to telstra. in fact, with the future of communications potentially able to be accommodated (somewhat) via the NBN pipelines, it almost seems like the government taking the long way around in messing with Telstra’s stranglehold on wired infrastrucutre.

  • This is not good news at all Angus… Think about the fact that the government will have control over large percentage of access to the Web in this country through owning the infrastructure.

    This would have been better left to the business consortiums who’d have a far greater vested interest in seeing the role out be on time (though obviously not guaranteeing it).

    Sorry mate, but on this one, I disagree.

  • By and large, I agree that this is a good outcome. However recent technological idiocy by Minister Conroy does give me pause to fret about Government’s looming control – and the possibilties of bad policy over sensible governance for our internet access.

  • This latest spin by the government underlines two things; they have no real idea on how telecommunications works in Australia and they will do anything to keep face with the public. We will end up with a network no better than what Telstra first offered, the only exception is that it will cost us a lot more money. The time is approaching quickly when this country will run out of money, not having a decent broadband network, will be one of the lesser problems.

  • I’m an SDH engineer working for Optus. This is fantastic for me as my wages are pegged to the industry average.
    However, anyone thinking government control of the NBN is going to benefit Australians need only remember how we were treated by Telecom (Telstra) when it was government owned. Government owned monopolies aren’t a good thing – they are never cheap and always inefficient.

    • Ha ha – no offence but ‘they are never cheap and always inefficient.’ perfectly describes Telstra at the moment. Two years and still waiting for my ‘phone line to be fixed.

    • Just noticed the comments from Matt. It maybe true that govt entities are not necessarily as efficient as corporate entities. But then corporate entities have largely caused our economic woes of now.

      If you compare those govt inefficiencies to the profits extracted from corporations, do they equate ?

      What PMG/Telecom Australia did do was to divert all profits into developing a better network. Which I believe it did very well at the time. If all the profit that is now ripped out of the system for shareholders was put back into the network now, what network would we have… a much better one !

  • Australia isn’t alone in trying to overhaul our communications infractructure for the future. Today, a day after the Australian announcement, comes news that the US also is looking at overhaul: http://www.zdnetasia.com/news/communications/0,39044192,62052943,00.htm?scid=nl_z_ntnd.

    I remember a trial in France that must have been 20 years or more ago where optical fibre was installed to the home. The equipment used to connect to the fibre was primitive, and there was no internet, but the phone could be used to look up the phone book.

    20 years on, our digital world has changed dramatically and only now are we getting government to consider FTTH. Industry has dropped the ball big-time on this. I’m pleased to hear an Australian government being pro-active about the future.

    Of course, who knows what the price of broadband will be in future? It’s certainly expensive now and likely to get more expensive. But then again, so are the costs of hamburgers, pizzas and coffee.

    And don’t we all know that our demand for data fills the bandwidth we’re given? Otherwise, computers would still only have 640K of RAM and a 20MB hard drive. How could you store your photos, music and video using that?


  • My concern over the NBN is who will own it down the track. What regulations will control the sale of such a huge infrastructure.

    I have already heard that it will be FTTP in the city but regional will cop Wireless.

    Well if that is the case is that a giant leap forward. The Telstra Cable Network will soon be offering some 100Mbps with existing infrastructure. They already have quite an extensive Wireless network, my thoughts what are we gaining for such a huge outlay.

    What I find interesting is that some areas only have Telstra services because no other company wants the low profit areas. So why would a new technology network be any different to this.

    So down the track when they sell the network will there be a Compulsory Service Obligation like current PSTN phone services for FTTP.

    It has all happened before and it will all happen again as they say in BSG. It just seems we are rebuilding the PMG/Telecom Australia from the ground up yet again, only to sell it all off. The circle is complete !!!

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