If ever there was a poster child for colossal government stuff-up, it’s Australia’s National Broadband Network.
The project has been continually screwed more and more by successive governments. It started with John Howard: telco Telstra offered to build a high-speed fibre network that would reach most Australians for what in retrospect was a bargain price of two billion dollars. Howard nixed the deal because, understandably, Telstra wanted to retain ownership. ‘Uncompetitive,’ Howard complained.
Then along came Kevin Rudd, spruiking an NBN policy he barely seemed to understand and apparently sketched on the proverbial beer coaster. The price tag rose to $29 billion, then Malcolm Turnbull got involved.
And so on and so forth. Now, it’s estimated that the half-arsed network we’ve ended up with will cost upward of $51 billion before it’s done. Yet it’s already becoming redundant, as wireless and satellite broadband gets better and better.
That isn’t stopping the government from throwing billions more at it, in some desperate election-year pork-barrelling.
Anthony Albanese has announced that a $3bn equity injection will be made to the NBN so that more than 600,000 premises can be given access to fibre internet connections by 2030. According to him, this is finishing the job.
You don’t even have to be particularly tech savvy to realise the job is never done in these types of cases. The 5G network is clearly breathing down the neck of the NBN, and who knows what’s coming around the corner, including Elon Musk’s Starlink. (When the cables were cut by the Russians, Musk provided Starlink connections to Ukraine to maintain internet access.)
In other, saner countries, building such networks was sensibly left to private enterprise. Of course, Australia is a big country, which makes building a network to reach everyone is always a fraught exercise. But the reality is that nearly all of Australia’s population lives in the densely population cities of the eastern seaboard. Less ideologically driven, humbler, governments would have restricted themselves to providing access to the tiny fraction of remote dwellers.
Many countries used this gap-filling approach, including New Zealand. The net effect has been a much lower burden on the taxpayer as well as adequate internet services in those countries.
Meanwhile, Australians have been slugged with a $50 billion behemoth that delivers some of the worst internet in the world, at some of the highest prices. Australia ranks 60th worldwide, with an average download speed of 57.9 Mbps (megabits per second). The global average is 97.5 Mbps. Hell, even New Zealand nearly doubles our average internet speeds.
Let’s be clear, the NBN has been a commercial disaster […] The only piece of luck was that a great deal of the NBN work was undertaken before construction costs really took off.
It was a complete gimmick for the Labor government to legislate that the NBN should remain in public hands. No investors in their right mind would think of buying it in its current form.
It’s just another case of politics driving out good policy.
There’s another lesson here: when a government is so addicted to spending (over $700 billion on-budget a year), that three billion dollars is a rounding error, we really are in trouble.
