AT LAST a choice between the major parties bizarrely, on...

AT LAST a choice between the major parties bizarrely, on broadband. It looks like a
no-brainer between the government's visionary $43 billion national broadband network
(NBN) and the coalition's dour back-to-the-future policy that has a decidedly more
prosaic $6 billion price tag.
Paradoxically, when the costs are comparatively modest, a policy attracts greater scrutiny
than one that soars into billions. Hence Kerry O'Brien's 7.30 Report grilling of Tony
Abbott on how many towers the Coalition's wireless broadband network would need.
Given that wireless forms a large part of the government's NBN plans it's a question that
the minister, Stephen Conroy, might equally be asked. I doubt he would have any idea.
In scrapping the NBN and seeking to cautiously spend taxpayers' money on a policy that,
although not perfect, offers gains, the Coalition emerges as Luddites while the
government, in splashing $43 billion on the NBN and $14 billion to compensate Telstra,
appears tech savvy about a future in superfast fibre-based broadband.
And what benefits fibre will bring. Senator Conroy delighted in talking about a
dishwasher using fibre-based smart grid technology to find the cheapest electricity at
3am. Would that be dirty brown coal or just dirty coal electricity?
There are, of course, other priorities for spending $50 billion plus.
Yet full marks to Senator Conroy. He has spun a simple narrative with Telstra the villain
that held back our broadband slain by structural separation, and a hero, the NBN, rescuing
us from the bottom of the OECD broadband heap.
Why worry about the cost when the NBN will generate massive externalities from the use
of high speed broadband by other sectors? It will drive Australia's productivity and
economic future.
If the world were that simple, governments in every advanced economy would be tipping
money into superfast broadband. But they aren't. The NBN represents $2500 per head
spent on high-speed broadband. But in America, the Obama administration has
committed less than $30 per head while the European Union has allocated $4 per head.
Australia will have to get an awful lot of externality bang for its buck and the NBN isn't
needed to deliver it. The critical sectors here already have fibre and high-speed services.
Universities enjoy gigabit speeds on their own networks. Big business couldn't operate
without high-capacity fibre links that at least five telcos offer and even 60 per cent of
schools already have fibre.
That means the NBN is really targeted at the domestic market where other than
high-definition TV over the internet, there is no need for the NBN's 100 Mbps.
As recent international studies show, universal access to low speed broadband yields
productivity gains that dwarf any further gains by the move to universal high speed
broadband and it's in delivering universal broadband quickly that the Coalition policy has
merit.
It builds on what's been achieved rather than reinventing the wheel. Despite the
government talking down Australia's broadband performance currently 98 per cent of the
population is in reach of wireless networks that can offer speeds of up to 12 Mbps, the
Coalition's baseline target, and 80 per cent have access to fixed-line broadband, with well
over half being in reach of higher speed ADSL2 and cable services.
True, some 1 million homes can't get fixed-line broadband. But the Coalition is offering
$750 million to fix that problem.
Similarly while delivering 12 Mbps to rural areas over wireless may look modest,
compare it to Britain's national target 2 Mbps.
The immediate gains offered by the Coalition fall short of the government's long-term
promises, but in following international precedents where the rollout of high-speed
broadband is largely left to the market and major telcos aren't dismembered because of
competition policy fetishes, the goals set are achievable and not predicated on a cargo cult
mentality.
The Coalition policy may be dull but it is grounded and one can only note that if the
government really believes the NBN is the answer to the challenges that face Australia,
are they asking the right questions.
Kevin Morgan The Age