Is there any point to the NBN now?
This question was posed on forums.whirlpool.net.au
by NovaPhoenix22 today. The very first response was from dave1901 and summed up the situation very precisely"It was too difficult to get rid of the bad bits of the Labor policy, so instead they got rid of the good bits. The outcome is the worst fixed line telecommunications policy possible : A big, slow, inefficient government enterprise building obsolete infrastructure while excluding anyone else from building anything better."
Australia's previous government planned and started rolling out a National Broadband Network that would provide very fast, future-proof optic-fibre internet connections. Australia's dominant wholesale and retail telco Telstra, had been privatised (sold off and listed) by the government in the 90's. Under the NBN, Telstra negotiated a contract under which they would would be paid around $10 billion to progressively decommission their copper network as the fibre was rolled out.
The fibre network rollout started very slowly and there was arguments about the expected cost with claims it would cost almost twice as much as the forecast $30 billion.
The right wing government won office in 2013 with one of their policies being to replace the proposed fibre to the premises (FttP) NBN with a cheaper fibre to the node network. A big sticking point was the existing multi-billion dollar contract with Telsta.
Last week Communications Minister Malcom Turbull announced a deal which would see the government owned NBN Co buy back the copper network from Telstra for around $10 billion so they could use it in their cheaper modified NBN. The deal also gave the incumbent telco Telstra access to much of the design, construction and maintenance contracts in the new system, further embedding their dominance in the Australian internet.
The big loser in this is the Australian internet consumer as indicated in the earlier quote. The big winner is the shareholders of Telstra who get the $10B cash windfall, have an obsolete copper network taken off their hands and then get some juicy maintenance contracts as it starts to degrade.
Cartoon by David Pope April 2013