At the Labor Party launch on Monday, Julia Gillard made the National Broadband Network central to her pitch for reelection.
And if you were introduced to the broadband debate this year, you’d be forgiven for thinking there wasn’t really an alternative to the government’s plan.
Communications Minister Stephen Conroy described the opposition’s broadband plan as a “failure of imagination”. The fact that this seems like a powerful critique shows how stilted the debate over broadband has become – apparently the problem with the Coalition’s broadband proposal is it doesn’t soar with the eagles.
But think back: just a few years ago Telstra was begging the government for permission to build its own super-fast broadband network. At no cost to taxpayers. Completely free of government subsidy. If the previous government or the Australian Competition and Consumer Commission had allowed it, there’s a good chance the private sector could have been building the broadband network already.
After Tony Abbott’s performance on the 7:30 Report last week, you bet he regrets the previous government didn’t take broadband policy off the political table.
There was a stickler of course. Telstra was asking for a regulatory holiday – that is, to exempt its new fibre investment, for a time, from the requirement to share it with its competitors. Failing that Telstra wanted the ACCC to nominate the price that the company would be compelled to share its new network, before they built it. After all, telecommunications networks cost a lot of money. The ACCC sets the price competitors pay to access Telstra’s network, and Telstra wanted some assurance it would be able to charge a price sufficient to recoup its investment.
The ACCC refused to do so. The Howard government wouldn’t make any legislative changes. Telstra ramped up its rhetoric, attacking both the government and the ACCC chairman, Graeme Samuel.
Into this bitter quagmire stepped the Labor Party and Kevin Rudd’s open chequebook.
NBN boosters like to say there is a “market failure” in telecommunications. But the government’s regulatory framework is the problem. It’s not the marketplace which has failed to deliver broadband. Government failure has.
The NBN plan tries to sidestep the regulatory failure, by having the government assume responsibility for telecommunications investment now and into the future. That’s exactly what Telstra’s privatisation, way back in the 1990s, was supposed to leave to the market.
So Australia is still struggling to break away from a century of nationalised communications. And doing so will mean making peace with an independent Telstra.
There is widespread anti-Telstra sentiment – not only from the Labor Party, but also from rural Liberals and the National Party, who imagine the high cost of providing telecommunications services in the bush is just thinly disguised anti-country bigotry.
On the other hand, many Liberals are understandably reluctant to be brutal to Telstra because the Howard government encouraged everybody to dump their life savings in Telstra shares.
The Labor Party has taken to presenting broadband as if it is simply a giant present from government to its people, and anybody who objects to the NBN must hate the internet. And the opposition, afraid of looking too close to Telstra, is trying to ape Labor’s approach without completely surrendering its debt and deficits attack on the government.
At least it’ll be cheaper, I guess.
Here the absence of a cost benefit analysis for the National Broadband Network is telling. Does anyone doubt the government wouldn’t like such an analysis (if it was flattering) to help defend their policy? Or NBNCo? Or the many firms which will get some of the huge amount of money the government is about to dump into the telecommunications sector?
As the tech publisher Grahame Lynch said in The Australian last week, it is “astonishing that not one … has mustered the modest resources required to prepare a credible cost-benefit analysis that attempts to measure the claimed externalities for the NBN in areas such as telecommuting, e-learning and telemedicine that are bandied about ad nauseam.”
It seems certain at the very least Treasury would have made some effort to look at the costs of the NBN relative to its benefits.
If it truly hasn’t happened – if Treasury really haven’t bothered to investigate whether this investment is worth the money – then the government is extraordinary negligent. Let’s give them the benefit of the doubt, and say they’re not, and the results just haven’t been released.
So the absence of the cost benefit analysis in the public sphere is a very strong hint the government’s broadband spend doesn’t really have much of an intellectual case. Julia Gillard and Stephen Conroy can talk all they want about how broadband will boost e-health, productivity, education, and things we haven’t imagined yet.
But if only the government had dealt with its crippling telecommunications regulations, the market could have been boosting all that already.