Communications Minister Stephen Conroy has delivered a contemptuous riposte to the research arm of global financial magazine The Economist, describing a report produced by the organisation analysing Labor’s flagship National Broadband Network project as “right-wing dogma”.
The report published yesterday described the NBN project as costing the Australian taxpayer 24 times as much as a similar project in South Korea, and delivering one tenth the speed. The Economist also took the Federal Government to task for spending money from the public purse on the project instead of utilising private sector efforts.
Shadow Communications Minister Malcolm Turnbull immediately welcomed the report yesterday. “Now the Economist Intelligence Unit joins the long list of expert observers, both international and local, who are utterly dismayed by the reckless spending of the Gillard Government on the NBN,” he said. “The study confirms, yet again, that this NBN project should be the subject of a rigorous cost benefit analysis by the Productivity Commission.”
However, in a media conference in Canberra today, Conroy ridiculed the research, pointing out that the opening paragraph of an Economist media statement on the report was “factually wrong”, in that Australia’s NBN would support 1Gbps — not the 100Mbps the report claimed it would. The upgraded speeds were announced during the 2010 election campaign.
“Unfortunately their research failed to notice that in actual fact we’re delivering a gigabyte — the same as Korea,” the Minister said. “It’s factually wrong in its opening statement and it goes down from there.”
Conroy said the report gave countries “zero marks for public investments” in national broadband networks, but “ten out of ten” for private investment. This, he said, was “ideological dogma — right-wing dogma”, as it showed The Economist was opposed to government investment in infrastructure.
The Labor stalwart said the Government was investing in the telecommunications sector in Australia because it had suffered 12 years of “market failure” under the previous Howard Government. “Any economic textbook you read from first year onwards will tell you that there is market failure,” Conroy — who has a degree in economics — said.
In addition, he said the only NBN deal which had been offered by the private sector to the Government was the offer by previous Telstra chief executive Sol Trujillo to build a fibre to the node network. “They offered John Howard a deal. They offered that deal to me as well,” he said, noting the arrangement hadn’t proved suitable. “The Howard Government rejected Telstra’s kind offer, we rejected Telstra’s kind offer, and nobody else is offering.”
Other aspects of the report were also flawed, Conroy said — such as the differences in size, population and density between countries like Australia and South Korea — and the fact that South Korea had already built a national fibre to the node (basement) network and was now upgrading it to fibre to the home.
Holding up a piece of paper which he said constituted the entirety of the analysis in the report, Conroy said he hoped the media hadn’t paid the $3,000 the report costs to buy in full. “For those who haven’t spent the $3,000, I just wanted you to see the entire analysis in this document,” Conroy said. “I hope not too many of you spent the $3,000.”