The National Broadband Network. The defining issue in Australian politics in 2010

The Coalition parties spent most of 2010 criticising the NBN, and threatening to shut it down, without offering any broadband policy of their own until eleven days before the federal election.  Perhaps this reflected their difficulty in finding common ground between the Liberal Party’s preference to ‘leave it to the market’ versus the Nationals’ determination to win a subsidised roll-out of broadband infrastructure in the rural areas they represent, based on their long memory of market failure.  After all, their Senate leader Barnaby Joyce’s first reaction to the upgraded NBN plan, when announced in April 2009, was ‘How could we disagree with something that is quite evidently our idea …’

The myths peddled about the NBN this year have been quite extraordinary.  The include ‘The technology [i.e. optical fibre] will be out of date by the time the NBN is implemented’, ‘Nobody needs 100 Mbps’ and ‘The current technologies [HFC cable, advanced DSL and mobile access] can provide 100 Mbps to the home without any need for government subsidy in the cities’.  The absurdity of these and other furphies provoked Rod Tucker to publish an excellent article in our previous issue debunking these ‘urban myths’.

Yet many of these myths were sustained in the Coalition’s Broadband Policy, when it finally appeared on 10 August and was found to be a composite of two disparate policies.  The first policy was for the regions (and outer metropolitan black spots), where $6.315 billion would be spent via the private sector (over seven years) to roll out an Opel-like network based on largely fixed wireless solutions, bringing rural Australia to parity with current metropolitan broadband. The second policy, for the majority of Australian dwellings, in the cities, would offer no subsidies and therefore rely on the private sector to provide more of the same (using DSL, HFC cable and mobile access).  As Rod Tucker memorably wrote in an opinion piece published on the same day:

‘The idea that we could use very fast broadband based on mobile technologies and existing fibre defies the laws of physics.’ (The Age, 10 August 2010)

Most surprisingly, the Coalition’s policy was to overturn Telstra’s hard-won agreement with the Government to sell its fixed network access infrastructure to the NBN.  If implemented, this policy would return Telstra to the dominant market position that has, in the view of the ACCC, the Productivity Commission and most independent commentators, stifled all competitive infrastructure investment in broadband access since 1997.

Closely following the Coalition’s broadband policy announcement, an ‘Alliance for Affordable Broadband’, consisting of eight junior telcos, proclaimed their support for this policy and, by implication, their willingness to share the $6.315 billion on offer. Given the long struggle by most Australian telcos to achieve any profitable business whatsoever in competition with the formidable Telstra, it is understandable that these eight would be attracted by the possibility of getting a slice of such a huge and unexpected government subsidy to the private sector.

As we know, the Gillard Labor Government was returned to office on 14 September with the support of the Greens and three independent MPs – all of whom had strongly supported the National Broadband Network. Indeed the two NSW Independents informed the public on 7 September that the NBN was a crucial reason for their choosing to support the Gillard Government. Given the Coalition Opposition’s trenchant attacks on the NBN throughout the election campaign, it can be accurately said that the Australian electorate on 21 August voted, by a very narrow majority, for a Government based on the parties and independents that would support the implementation of Labor’s NBN policy.  As a result some have called this ‘the broadband election’. Indeed it is difficult to find any other policy issue on which there was such a gulf between the positions of the winning and losing parties.

So the NBN, a rather complex policy for implementing advanced telecommunications infrastructure, has become the defining issue in Australian politics in 2010.  It is as though Australians are divided into those who are pleased to see Australia leading the world in implementing a strategically valuable piece of national infrastructure, and those who are worried that we are leading and not following, spending far too much on it, and/or simply not ‘leaving it to the market’.

Since Malcolm Turnbull was appointed Shadow Minister for Broadband and Communications on 14 September, he has exhibited characteristic pragmatism, and has moved the Coalition policy, slowly step by step, towards potential acceptance of much of the electorally popular NBN. The structural or functional separation of Telstra is now conceded as ‘sensible’; and on 24 October he declared that

‘if the Productivity Commission were to report on the [NBN] as they should, and if they were to give it a big tick from a cost-benefit point of view, it would be incredibly persuasive.”

Whether this position will be supported by his Party Leader is yet to be seen; it would seem to be almost a 180 degree shift from the marching orders Mr Abbott gave Mr Turnbull, ‘to demolish the NBN’.  TJA looks forward to publishing articles providing critiques of the NBN policies of the major parties, and of the NBN rollout, in the year ahead.

Read more here.

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