Why the NBN is good for Australia

October 3, 2010

The Government’s National Broadband Network (NBN) was one of the main issues of the recent Federal election. In fact, it was probably one of the main determining factors of the eventual outcome, with the conservative independents citing it as one of the key reasons that they supported Labor. The fact that the Coalition wanted to scrap it and replace it with a slower but cheaper option didn’t help their cause either. I was a vocal critic of the Coalition’s policy on the NBN, even actively campaigning against it online through (among other things) a Facebook causes site.

The fact is that the broadband infrastructure in Australia is grossly inadequate to support the sorts of high technology, value added industry that we aspire too. For such a geographically challenged country (i.e. highly dispersed population centres separated by long distances) our investment in broadband networks has been under-done. When compared to the broadband networks of other developed countries in Europe, North America and Asia we are loosing out on a competitive edge for our industry – not just in the high technology area but in general. A fast broadband network makes activities such as telecommuting and other forms of working remotely, much more viable with resulting benefits in reduced traffic congestion, stress, pollution (including greenhouse gasses) and allowing people to better engage with their local community rather than spending time travelling.

In the 19th century it was rail-roads, in the 20th century it was electricity and telephone networks and in the 21st century it will be broadband digital data networks that will drive our economic and social development. The development of a National Broadband Network will be the sort of nation building project that the Snowy Mountains scheme was in the 1950’s.

History has shown that this sort of project will not go ahead at the required scale unless driven by governments. The dispersed nature of the Australian population means that servicing regional and remote country areas with the required grade of service is not necessarily economically viable for private industry (yet much of Australia’s wealth is generated in these areas.) In addition the sorts of technical and financial risks that are involved in building such networks mean that only the Australian Government has the capacity to drive their establishment.

There are precedents for this sort of project. The Electricity Trust of South Australia (ETSA) was created by South Australian Liberal and Country League (LCL) premier Tom Playford through the nationalisation of the Adelaide Electric Supply Company (AESC) in 1946. Before then it was a private company (with headquarters in London) which held a monopoly over electricity supplies in Adelaide at the time. It was the company’s refusal to use brown coal as advocated by Playford, even going to the extent of buying black coal only boilers, which triggered the request from Playford for Commonwealth funds to nationalise the company – Labor Prime Minister Ben Chifley readily agreed. The LCL suffered a split in its ranks with regard to nationalisation, and the state legislation only passed with the support of ALP and independent members of parliament. ETSA participated in the post-war growth and industrialisation of the South Australian economy, including providing modern and reliable power for regional areas. As a vertically integrated generator, distributor and retailer of electricity, ETSA was responsible for the development of new energy sources (brown coal mined at Leigh Creek), two major power stations (Port Augusta and Torrens Island) as well as expanding the electricity distribution network to areas where there was no supply, or low voltage (32 volt) supply generated locally.

Tom Playford recognised that to provide the necessary electricity generation infrastructure to grow the South Australian economy, only the government was could be trusted and have the resources.

The Opposition’s proposed alternative is a hastily thought, sub-standard alternative that relies on the private sector to provide the majority of the funding and uses old technologies to provide a poorer grade of service. While it is currently projected to cost less, this does not necessarily mean that it will actually meet the needs of Australia and our future economy.