The AFR this morning has the leaked outline of the Coalition’s alternative NBN policy.
The Coalition will say on Tuesday that it would reduce the construction cost of the NBN by $17 billion and use existing infrastructure to speed up internet access nationwide, claims that will probably make the debate about broadband access a major part of the federal election campaign.
Under the Coalition’s plan, all Australians would have access to speeds of at least 25 megabits per second by 2016. Its less-ambitious network, based heavily on scaling back the optic fibre rollout to “nodes” on street corners rather than going all the way to every home, would not be completed until 2019, only two years before Labor’s scheduled completion date.
Under the plan, about 70 per cent, or roughly 9 million homes, would get “fibre-to-node” broadband by 2019.
Telstra and Optus cable networks, which pass more than 2 million homes, would not be prevented from offering high-speed broadband, ending NBN Co’s fixed-line monopoly. Areas not covered by the existing cable networks would be prioritised in the fibre-to-the-node rollout in the first term of a new Coalition government, and with those upgrades would be completed by 2016.
Under the Gillard government’s plan, 93 per cent of homes will get access to speeds of 100 megabits per second by 2021 at a capital cost of $37.4 billion.
My understanding of things is this. ADSL2+ will give you 25 megabits per second now if you’re close to the exchange. Of course many aren’t so the Coalition is basically guaranteeing for three-quarters of us the broadband speeds that many can get now. We’re going to pay $20 billion for this.
The Government initiative is far more visionary and transformative but is obviously much more expensive at $37.4 billion plus inevitable blowouts.
The Coalition will also have to renegotiate all of the contracts with Telstra over the use of its copper wire to get from the node to the house. It would also launch three new inquiries into the NBN:
The Coalition will call for three reviews of the NBN. These will include a strategic review of NBN Co, including detailed analysis of the progress and cost of the rollout, an independent audit into federal broadband policy and NBN Co’s governance, and a Productivity Commission-led cost-benefit analysis.
Yes, it’s solution will be cheaper. But it will be a half-arsed network and we’ll have to wade through miles and miles of more government hand-wringing and delay.
If we want to compete in the new economy with places like Korea and Japan, as well as deliver the huge productivity gains of high speed broadband in a country with a far flung population then the higher price tag is more than worth the better network to my mind.
The NBN doesn’t even register on government accounts so it doesn’t effect the budget unless you’re looking to book savings through a bit financial engineering:
By reducing the government’s equity in NBN Co, the Coalition will claim it can generate up to $750 million in savings over the budget forecasts due to reduced interest payments.
If you want to cut spending, get rid of $750 million in middle class welfare. The NBN is a text-book case of nation building infrastructure that is well timed for the end of the mining boom. Leave it alone.
