National Broadband Woes
Nick Minchin – Look, up in the sky! There’s an ugly downside to Labor’s broadband project
Senator Nick Minchin, Opposition Minister for communications and the digital economy, writes a report for the SMH R.E. the national broadband plan and some already apparent problems.
Despite planning to spend $43 billion on its half-baked “Ruddnet” plan, federal Labor is looking at ways to minimise time and to cut costs.
Optus estimates that if 100 per cent of the network’s cables are deployed underground, as I am sure most taxpayers will quite reasonably expect, the network would cost $60 billion.
The number one problem that will be experienced with any sort of Government project, is that rather than being pushed from a commercial demand, it is pushed from a political demand.
When a regular item has a commercial demand, the consumer pushes the manufacturer for more of a product, or a better model. This demand allowed two things: cheaper prices and better quality. Both are brought around since it is financially viable for the company to provide the product or service, and the demand can be met by another party should either of the previously mentioned not be delivered.
Ignoring the effects that a certain company starting with “T” had on hindering the industry, the main reason a high speed broadband network hasn’t been built already is that there is no viable commercial demand. People aren’t buying our current speed of broadband at a high enough rate to warrant building a faster one. This means that any government attempt to built a politically driven network (what a vote winner – fast Internet for all!) will be met with high build time and cost due to low existing infrastructure and low consumer demand due to the high cost of subscription. The latter is being partially offset by funding from tax dollars and bonds, but the buyers of any bond will want a good return. Should there be a low return, the money will be need to be recouped from tax dollars when the bonds expire.
Who’s looking forward to a low cost, ontime, underground, lightning fast, broadband network? Judging by the already massive change in project plan and cost woes, I don’t think it will be happening.