NBN decision: better broadband or bigger bureaucracy?
So the federal government has thrown down the gauntlet and decided to go ahead and lead from the front to create the National Broadband Network with the help of private industry. Amid all the commotion about Telstra's omission from the original proposal, a new government department to build and manage the NBN appears decidedly ironic. Telstra was Australia's national phone and data services company, the industry was deregulated with the aim of introducing more competition, Telstra inherited all the taxpayer-funded infrastructure, deregulation failed to deliver a high-speed national network, ADSL deployments were hampered by access restrictions and Telstra's unwillingness to cannibalise existing cable investments, and now the government wants to start again under the guise of another national infrastructure business. Talk about deja vu.
The $43 billion question is, of course, will the government get it right this time or are we in for more bungling bureaucracy?
Given the ongoing post-deregulation climate surrounding Telstra and its reluctance to co-operate with the other carriers, the government's NBN decision does seem like a “good” one (anything, and I mean anything that promotes more competition in the data networking space is good), but it also begs the question of why this couldn't have happened within the auspices of the government-owned Telstra of 10 years ago.
It's not an easy question to answer, but a good place to start would be to examine how deregulation happened, not why.
Deregulation promotes competition, however, there will only be full competition if the basic building block is available to all commercial entities equally.
Instead, the modern Telstra wholesale and retail businesses just inherited all the public communications infrastructure under the guise of “deregulation”.
A far more open approach would have been to keep all the public assets – the exchanges, the cabling, etc – in government hands (call it a separate government business if you will, how about ATIC – Australian Telecommunications Infrastructure Corporation?), and allow all carriers – including Telstra – to lease access it at wholesale rates.
The retail arms of the carriers then go ahead and sell it to consumers in the form of telephone and Internet access services, and ATIC as a wholesaler only has no retail presence and therefore no conflict of interest – unlike our friend the Big T!
The revenue raised through selling access then gets ploughed back into maintaining and upgrading the network – no questions asked about “access permissions”.
With this architecture, the existing national infrastructure just becomes the NBN, and there's no need to re-create a special “NBN” in parallel.
Today's announcement seems remarkably similar to what might have been if deregulation prevented the infrastructure from falling into Telstra's lap the way it did.
Only time will tell if Rudd and Conroy's nation building exercise will reap the broadband services Australian consumers and businesses so desperately require. Broadband or no broadband, one thing's for sure – there will me more bureaucracy.
Benefits based on Forrester Consulting Study “The Total Economic Impact of Converging SAP Landscapes on Vblock™ Systems”
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