The Productivity Commission has a point
The Productivity Commission is correct in saying that the government has not made the social and economic benefits of the NBN sufficiently clear. We have argued this from the very beginning of the project. A few months ago we commented on the issue in our blog: Does the NBN have the right legislative foundations?
While the government has on many occasions indicated that the NBN is national infrastructure and that telecoms will be just one small element of the services carried over it, this has not been enshrined in either government policies, regulations or in the NBN Co business plan. The Productivity Commission is not the first to make this point – the Parliamentary Commission on the NBN has made similar comments.
On the positive side, these organisations, along with many others, do not dispute the off-the-balance-sheet benefits. They simply state that the government has failed to integrate that into their policies and as a result those government bodies cannot make a proper assessment.
There is also no argument from the government that digital infrastructure is essential to effectively address the significant social and economic problems we are facing in relation to healthcare, education, climate change, energy, commerce and media.
Perhaps the most serious problem is with the NBN Co business plan. This is formulated according to an ROI that is only based on traditional telecoms incomes, and there is nothing in the plan that takes into account the broader level of these national benefits.
When NBN Co was launched it was specifically stated by its CEO that it was not looking at these (what BuddeComm called) trans-sector services. We fought very hard for the retail clause in the NBN legislation as we saw this as an avenue for organisations like healthcare, energy and education to be able to truly use the NBN as a utility for the purpose of building their specific services on top. However that clause falls short of outlining any specific policies as to how this can be used for the national benefit.
We very clearly highlighted smart grids as a key area into which the government should put effort, to make the network attractive for the electricity companies to use for their smart grid developments. But the absence of a clear NBN Co focus on this has made progress extremely slow, and no clear directive from the governments has been put in place to make it happen. This is also reflected in a misalignment of the NBN rollout and the Smart Grid/Smart City project.
So the Productivity Commission certainly makes a good point on these issues.
Over the last year the government has made progress in its digital economy strategy to work on these matters, but, as the Productivity Commission indicates, this is not reflected in the legislation and the business plans; and unless that is done questions will continue to be raised regarding these national benefits.
See also:
- Australia – Digital Economy – Trans-sector concept
- Australia – National Broadband Network – NBN Co
- Australia – National Broadband Network – Digital Economy
- Australia – National Broadband Network – Smart Grids
- Australia – The Internet of Things
We invite your comments: 1 Comment
Tagged in: Australia, Broadband, NBN, Trans-sector
December 13th, 2011 at 4:36 pm
Paul it is a relief to be able to read one of your articles again and agree with you !. If we can now cut through the political spin and call a spade a spade – i.e. many of the NBN Co services are a social need and should be financed and acknowledged as such without the behind the scenes cross subsidsation shenanigans maybe this project will start to become easier on the nose.