blog The National Broadband Network Company’s Strategic Review found conclusively that under almost every model, the company’s network rollout would make a long-term return on investment, ultimately costing the Federal Government nothing due to the cost being reimbursed by subscriber fees paid by millions of Australians. Despite this, Palmer United Party leader Clive Palmer this week referred to the cost of the NBN and how it could be brought down further. ZDNet reports (we recommend you click here for the full article):
“If we have a look at the country, we break it down, there’s really only about an AU$7 billion worth of expenditure where we need to go to places where there is no internet coverage for commerce and business and infrastructure to grow,” Palmer said. “If we look at places like Sydney, Melbourne, there is good domestic demand there and industry can meet those needs, and so they should. Government can’t be efficient.”
It appears from his statement that Palmer believes the NBN rollout should take a very minimalist approach consistent with traditional liberalist ideology, of structuring telecommunications industry regulation to facilitate private sector investment in profitable areas such as Australia’s cities, while subsidising unprofitable rural areas. This is one path successfully used by a number of other countries globally, typically paired with some degree of structural separation of the incumbent telco’s retail and wholesale operations. For example, this is how the UK is proceeding with the modernisation of its telecommunications industry.
However, the policies of the other major Australian parties — Labor, the Coalition and the Greens — are currently focused on a more wholesale interventionist model also used in a number of other countries (notably New Zealand and Singapore), where government seeks to directly fund the overbuilding of existing networks across the country. This model has also been successful.
Image credit: Facebook page of Palmer United Party