The cost of the Australian NBN
The ABC recently presented a rather important radio program about the NBN (Hanging by a Fibre), in which it explored the need for the network and queried the cost. Plenty of airtime was provided for those who were critical of the initiative, whereas the comments from people who had a more positive message were restricted.
Obviously in a situation like that some grabs might appear out of context. A great deal of airtime was given to the quotes from IT expert Malcolm McKenzie, who, perhaps flippantly, suggested that the cost of the NBN could double. (In a politically loaded Australia this was fairly inflammatory and CommsDay subsequently reported that despite his comments Malcolm is a great supporter of the NBN – hence my suggestion that his remark might have been slightly out of context).
NBN critic, Kevin Morgan, was also given plenty of airtime also, but I certainly agree with Kevin that the government has failed to give a proper account of its $43 billion proposed spending, and that it also could have done a far better job explaining why it is spending all that money.
I was then asked by several media to comment in relation to Malcolm’s statement on the radio. My reply (as quoted below) was that this was ‘idiotic’. I indicated that it was an insult to the Australian infrastructure industry. I am not aware of any large-scale infrastructure projects in the last 5 or 10 years that have seen budget blowouts of that magnitude.
I think it is rather naïve of Malcolm to say that weather, trees and community attitude could be the cause of such a blowout. Any respected infrastructure company would take issues of this kind well and truly into account. I am not aware of any of such blowouts in, for example, the highly community-sensitive rollout of mobile stations.
Malcolm might perhaps be talking about the IT industry, where blowouts of this kind might occur regularly, but that is a reflection on the IT industry and not the infrastructure industry.
The comments I made to Darren Pauli in Computerworld were also picked up in the USA and inspired this response from one of the country’s most respected broadband analysts, Dave Bernstein (www.dslprime.com):
Darren Pauli at Computerworld Australia headlines Budde barney over NBN blowout. Malcolm McKenzie speculated the broadband network could cost $89B instead of $34B. Analyst Paul Budde thinks that’s “idiotic”.
Budde’s almost definitely right. The Australian cost estimates are substantially higher than similar networks at Verizon and AT&T so should be realistic. Australia has made the smart choice of using 5 megabit satellite for the last 1% who can be brutally expensive to reach. The U.S. plan calculated that ½ of 1% cost into the tens of thousands per home. Using satellite for those last few halves the cost. Reaching 100% landline would cost $20-30B; 99% landline and 1% satellite is $10-15B. That’s the right choice but the plan couldn’t say so directly. Instead, they suggested that “money should first be spent where the bang for the buck is biggest”. That could be enforced by “placing low priority” on any homes requiring subsidies of $5,000, with the unspoken inference they’d never be wired.
Australia – National Broadband Network – Changing the media
Australia – National Broadband Network – Competition and Regulations
Australia – National Broadband Network – Deployment Strategies
Australia -National Broadband Network – Early Projects
Australia – National Broadband Network – Government’s Trans-Sector Conference
Australia – National Broadband Network – Industry at crossroads
Australia – National Broadband Network – Municipal Networks
Australia – National Broadband Network – NBN Co and Infrastructure
Australia – National Broadband Network – Overview and Analysis
Australia – National Broadband Network – Telstra
Australia -National Broadband Network based on Trans-sector model
Australia – National Broadband Network – Trans-sector projects
Tagged in: Australia, National Broadband Network
