Wednesday, February 16, 2011

People often ask me for my thoughts on the NBN (National Broadband Network).

Whilst I do believe we need great internet access now and in the future, I don't believe the government needs to be the provider.

The problem I see if the following:

1. When the government gets involved it makes the rules to suit itself. We can see that in how the government is treating Telstra. The government new the direction it was taking so progressively moved ownership from itself and the end result is a loss in value in the shares for possibly millions of small share holders (I'm one of them).

2. You can have the person making the rules playing the game. Governments roles should be to create a level playing field for the benefit of the people.

3. In Tasmania the figure we were given in the press was for 200,000 premises at a cost of $700 million. That's $3,500 for each of the premises. Since it is from our taxes we don't notice the money. The question I like to ask people is would you be willing to pay $3,500 for the infrastructure to provide fast broadband to your home. This is in addition to paying for the broadband service because you'll have to pay for that as well. I'm quite sure if people had to pull the money out of their own pockets directly (rather than indirectly via their taxes) most people would say no.

4. What happens to all the infrastructure we have in place that has plenty of life left. This will be a waste of billions of dollars of infrastructure turned off and laying idle because if is competition to the NBN.

5. Smaller infrastructure players will be forced to sell out or close up shop because you simply can't compete with the government.

6. Delivery of new services and upgraded services was advancing what we had in Australia. Once the NBN got involved that all died from what I could. With Telstra's recent announcement in wireless (LTE) it is good to see there will be some competition.

7. The NBN is another monopoly being formed. The government will use our money and then sell off the business as it has done in the past just like it did with Telstra. Where are we then? There will be a single major supplier to our underlying infrastructure and we can be pretty sure the government will legislate to make sure it gets a good price at the expense of other businesses.

8. Right now 3G wireless isn't really at a level suitable for business but that doesn't mean that will always be the case. As part of my testing what is possible for the past couple of months I've run my business and household completely via 3G wireless and whilst there is some compromise, as prices come down there is no reason wireless won't become the predominant means by which most consumers and small business will be able to cost effectively connect to the internet. But if the government owns the NBN they won't let that happen as easily as it should. You can't have the government playing the game and making the rules as this isn't a level playing field.

9. The growth in IT technology appears to be in the mobile arena. That is more suited to wireless than fixed internet. The government may have made a mistake of basing the next ten years on the past and not the future. Obama has announced an $18 billion plan for wireless whereas we've heard nothing on that front from the Australian government because they are now locked into the NBN direction.

10. This blog entry was created using a netbook connected wirelessly to a Wi-Fi hotspot which connects to the internet via a 3G service. No landline facilities were required.

11. My concern is the NBN may simply become tomorrows delivery for TV, movies and entertainment. There is nothing wrong with that, but why have the majority of Australians paying for the entertainment facilities of others.

12. I'm also concerned that should the NBN become the single backbone of internet access in Australia the government is well position to filter and monitor the information as it sees fit. I'm not particularly happy to give that much control to the whim of the government of the day.

I'm not against the NBN, but I don't believe the government needs to be the provider of the services. The government to me needs to remain independent and provide all Australians with the best regulatory framework for businesses to be able to provide the best services to all Australians.

In summary I think if people realised that every worker is chipping in a couple of thousand dollars they'd start to think twice as to whether it is the best way to spend our taxes. I'm concerned the government is making the rules and playing the game which doesn't provide the best outcome. I'm concerned the government is putting into place infrastructure which will be superseded by wireless well before the NBN becomes reality meaning the return on investment by taxpayers will be doubtful.

Ask yourself are you happy with the internet service that you currently receive and the range of options you have available and I think most people will be pretty happy (short of poor service by many providers which won't change as we'll still have to deal with them). Would you then be happy to pull the $3,500 out of your own pocket for a service you may never need to use and I think for most people the answer will be no.

I also respond this is just my point of view based on my knowledge and perspective. It is equally possible others will see the NBN as the preferred direction for Australia. But at least by letting people know my thoughts they can then take that information and

Kelvin Eldridge

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.