NBN 'Reckless': Minchin

Shadow minister for Communications Senator Nick Minchin has pointed to the findings of two studies as evidence of the “expose the recklessness” of the Rudd Government’s $43 billion National Broadband Network.

Senator Minchin today said the most salient findings of the October 2008 Australian Industry Group and Deloitte Survey of 526 CEOs: High Speed to Broadband – Measuring Industry Demand for a World Class Service had been ignored.

Specifically, Minchin claimed that 47.9 percent of surveyed CEOs indicated they would not pay a premium to access higher speed broadband, while 25.8 percent would pay a premium for higher speeds.

The same study found that almost 40 percent of CEOs did not know what their organisation’s current broadband speeds were, while just 17 percent believed faster broadband was likely to generate new products and services.

Minchin also pointed to the findings of the August 2008 Charles Sturt University’s Household Technology Survey of 700 households across the country.

He said the study found 67 percent of households said higher speed broadband was not a priority in their household budget, and that only 11 percent of households said they were certain or almost certain to upgrade to a higher speed broadband service over the next 12 months.

Just 18 percent of households felt the Federal Government’s broadband initiatives would help their household, Minchin said.

"These results hardly support the Government's dangerous assumption that customers will be prepared to use a premium broadband network and pay accordingly for the privilege, at levels which ensure its commercial viability," Minchin said in a statement.

"The Rudd Government has not conducted any cost-benefit analysis, cannot provide any projections of likely take-up, or give any indication of what consumers will have to pay to use this service.

Communications minister Stephen Conroy’s office was repeatedly contacted but did not respond with comment by deadline.

Update:

A spokesperson for Senator Conroy said there was a growing body of work supporting high-speed broadband as a potential driver for productivity across the economy.

The spokesperson pointed to prime minister Kevin Rudd’s statement on 7 April that the investment was expected to generate additional economic activity worth some $37 billion (Treaury estimate) over the life of the project. An additional quarter per cent of GDP every year for the life of the project.

The spokesperson also pointed to a number of supporting studies, including a study conducted on behalf of the European Commission and published in 2008 found that broadband has a positive impact on growth, productivity and employment levels.

The report found broadband led to improvements in labour productivity of 5 percent on average in the manufacturing sector and 10 percent on average in services. Broadband led to creation of 105,000 net new jobs in Europe in 2006, the spokesperson said.

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