Turnbull defends latest NBN report

The latest Coalition-commissioned report on the roll-out of the government’s version of the NBN has, predictably, sparked some lively debate.

Communications Minister, Malcolm Turnbull, has defended the cost-benefit analysis contained in the report, which reveals that, of the total $22 billion cost, almost 25 per cent or $5 billion, will be needed for the multi-technology mix model to deliver high speed internet to those living in non-commercial, rural and regional areas. But the report predicts that the benefits will only be a fraction of this amount.

Speaking on ABC radio, the Communications Minister conceded that this is a subsidy, but that the government and the nation can afford to subsidise the bush. Without such a subsidised roll out in non-metro areas, people in these areas would have “very poor telecommunications and that’s not acceptable in Australia. Access to telecommunications and broadband is a very, very, very fundamental need for people living in a modern society like Australia.’’

Opposition communications spokesman, Jason Clare, criticised the latest report, for being “not independent’’, claiming it was written by “people who hate the NBN’’ and who previously worked with Malcolm Turnbull. Jason Clare also said Australians would have “a second-rate Claytons’’ NBN under this government. Echoing the strong position of his predecessor, former Communications Minister, Stephen Conroy, he defended Labor’s FTTP (fibre-to-the-premises) alternative, which a previous expert panel and study had recommended.

The latest report on the Coalition Government’s NBN roll-out has also attracted strong criticism from Associate Professor, Kai Riemer, a digital technology expert at the University of Sydney Business School. He states that “the cost-benefit analysis favouring the government’s NBN model is deeply flawed. Whilst established business tools, such as cost-benefit analysis, can validly be applied to everyday technology, they fail when applied to game-changing technology such as the NBN. Because, while we can extrapolate the cost of building the NBN, the benefits it will unlock are fundamentally unknowable and unpredictable.”

Read more at TheGuardian.com

University of Sydney Business School

Opinion: No more NBN reports

Australia must lead the developed world in the production of ‘reports’ of every shape and size. We’ve been hard at it for as long as anyone can remember, so that the latest, dealing with the roll-out of the NBN, shouldn’t come as too great a surprise.

Nor should the criticism of it as soon as it has been released. As any pretence of bi-partnership between the Federal Government and the Opposition has all but evaporated, such a major and expensive piece of infrastructure will inevitably evoke very strong feelings on both sides of Parliament.

But what is more significant about this latest government commissioned, so-called independent analysis, is that perennial issue which has plagued Australia. When, in common with a handful of other countries, such as Canada, you have a considerable land mass sparsely populated, yet being a democratic society based on the fundamental commitment to equality, irrespective of where you live or work, then clearly the cost of supplying the essential services required by a modern society will be disproportionately high outside the main population centres. This was true in the days of telegraph, then the phone and, in fact all services, including mail and banking. And this is where the Communications Minister’s $5 billion ‘subsidy’ for the bush kicks in.

However, we are currently blessed with a ruthlessly ‘dry’ government, preaching at every opportunity the end of the age of entitlement and trumpeting cost-cutting in every government department and agency. Surely there can be no scope for such a massive ‘subsidy’ for the bush? Until we remind ourselves that this is a coalition government, dependent on those champions of all things rural, The Nationals.

The other illuminating response to this latest report on the NBN is the criticism of the core cost-benefit analysis it employs. When you have a digital expert from no less a source than the University of Sydney Business School, stating that established management tools, such as cost-benefit analysis, cannot be expected to work when applied to projects as massive as the NBN, the findings of the report are seriously undermined. But it stands to reason, given that the uncertainty of the quantifiable inputs or ‘costs’ and the now clearly established speed at which all aspects of digital technology are evolving, that no one can anyone accurately predict ’benefits’ of such game-changing infrastructure as the NBN.

What do you think? In the present climate of government cost-cutting, are you happy that $5 billion will be required to subsidise the NBN roll out to the bush? Are you concerned that we’ll end up with “a second rate Claytons’’ rather than a real, NBN? If it’s available to your home or place of work, have you connected to the NBN?

Written by David Fallick