The Opposition Shadow Minister for Communications and Broadband Malcolm Turnbull claims that private enterprise should build the National Broadband Network, and that for more money than it would cost to buy all of Telstra, the Government is building a new telecommunications company without having received a business case from the management it has tasked to do so.
During a speech in Melbourne he claims that Governments should not go into business in areas where the private sector is capable of providing the necessary services, instead the Federal Government should incentivise the market, by way of subsidies.
He claims that a free market and competition between firms is the best way of delivering low cost broadband. Not by creating a Federal Government Monopoly.
He claims Governments should seek to promote competition and where a Government is in the business of providing services to the public it should not place any barriers in the way of private competition similar to what the Labor Federal Government has done with Telstra.
He said: “We are one of the most highly urbanised societies in the world and as a consequence most Australians live in cities where there is more than enough commercial incentive to provide broadband services. Unfortunately, Labor prefers to frame the public debate over its plan and any alternative proposals as a series of caricatures and false dichotomies. It’s the NBN or perpetual mediocrity. Fast fibre or overcrowded wireless. Visionary nation building versus mean-spirited penny pinching. The future versus the past,” he said.
“The NBN represents the largest single public investment in infrastructure in Australia’s history. It was devised and commenced without any meaningful evaluation of direct or indirect economic costs and benefits, and without a public business case. Indeed only a few days ago we were advised by the management of NBN that they had not yet finalised their business case or submitted it to the Board, let alone their shareholder, the Government”.
He said that for more money than it would cost to buy all of Telstra, the Government is building a new telecommunications company without having received a business case from the management it has tasked to do so.
He claims that Infrastructure Australia, an expert body the current Government set up and tasked with exactly this mission has deliberately been denied access to the costing of the NBN”.
Even more astonishing than the lack of cost-benefit analysis is that Labor has never explicitly defined the precise shortcomings that the NBN is intended to resolve. What exactly are we trying to achieve? And what options are available to achieve it?
This lack of precision goes all the way back to March 2007 when Labor unveiled its original $4.7 billion fibre to the node proposal with a purposeful nod to “nation building” and a dire warning that Australia risked being “left behind” in broadband.
More than three years later, the cost and complexity of Labor’s proposed solution have increased tenfold. Yet the Government still hasn’t articulated exactly what it is trying to achieve. Put another way, if fibre to the premises is the solution, what is the problem?
There is every reason to believe that the private sector can deliver the broadband objectives I have discussed with some Government support in rural and remote areas.
And for those who cry out “nation building” and “vision” when matters of finance are raised consider this: why is subsidising the provision of a near infinite range video and entertainment services to every Australian home more worthy than building a decent public transport system in our cities, better hospitals and roads, let alone fast trains and water infrastructure.
Governments deal with scarce resources – your taxes – and they owe it to us to rigorously prioritise and analyse the projects on which those taxes are spent.
The Government must immediately undertake a thorough cost benefit analysis of this project. It is not too late, the die is far from cast. There is still time to get the broadband services we need at a price we can afford.