Economic risks

The Government committed itself to the NBN because of the significant economic benefits that will flow to the entire economy from the increased productivity the network will enable. Telstra has commissioned Access Economics to quantify these benefits. The Access Economics research makes clear that the NBN will significantly enhance GDP. Importantly, Access Economics also makes clear the real economic costs from delay, from commencing the build in low rather than high population density areas and from adopting a lower quality network build solution.

Economic issues for the Government include:
# Has the proposal of the preferred NBN bidder been subjected to a rigorous economic assessment?
# Has the cost to the economy of a delayed start to the build – estimated by Access Economics to be $3.2 billion over the period 2009-2020 in the case of a two year delay beyond 2009 (or a 34 percent decline in the positive economic contribution of the NBN) – been factored into the recommendations to the Government?
# Has the cost to the economy of starting the build in low population density, unserved areas and working back towards the major metropolitan centres – estimated by Access Economics to be $4.9 billion over the period 2009-2020 including delays in commencement (or a 52 percent decline in the positive economic contribution of the NBN) – been factored into the recommendations to the Government?
# Has the cost to the economy of adopting a lower quality network build design – estimated by Access Economics to be $5.7 billion between 2009-2020 (or a 60 percent decline in the positive economic contribution of the NBN), including delays in commencement, an outside in construction, and consequentially lower take-up rates – been factored into the recommendations to the Government?

Now this is interesting for all manner of reasons. First, it appears to confirms Telstra’s belief that the economic benefits of the NBN are far less than the government’s $12-$30b per annum (whose numbers too are not easy to analyse). Second, where is the report by Access Economics?

It is nowhere to be found. It is not on Telstra’s site. It is not on Access Economics’ site. Are we supposed to take Telstra’s word for it because Access Economics has been a regular commentor and researcher on broadband issues? Well, I hope not because if you search for broadband on Access Economics’ site, you get nothing.

Hopefully it will be released sometime and when it is released you can bet I will be examining it closely to see what it tells us. Until then it is worthless.