Why is it when anti-government types lay into a policy they insist on targeting the hype rather than evaluating the policy and the market failures themselves? I refer to today’s SMH rant by Chris Berg. He complains about the broadband hype of increased productivity, lagging behind on take-up and e-everything and dismisses them and in the process argues that $43b isn’t good government policy. The problem is that these arguments are ‘straw men.’ They are the things governments say about every policy but surely they aren’t the ones serious commentators should focus on.
In the case of broadband, the serious issue is competition in telecommunications. We have face both high costs and a regulatory morass that is killing investment where there isn’t real competition. For years, Telstra seemed unchallenged by competition. Then, in April, the government finally wakes up to this and notices that they can provide that competition. Since then everything has changed. What is more, to ignore that is to fail to evaluate the policy for what it is.
Instead, on the costs you have to consider the fact that once Telstra faced serious competition, asset split offs are likely to build the NBN and so the $43b cost is a hollowman’s projection. It will be much cheaper. Second, on the benefits you shouldn’t just look at what people might pay for broadband but what they will pay for cheaper telecommunications. As I have argued, those sums do seem to add up. The point is by focusing on the hype rather than the real issues you can’t provide proper policy analysis.
And there are concerns here as Stephen King articulated. We have to hold the government’s foot to the fire on ensuring long-term competition and an evolving and functional regulatory structure. If we don’t get those things, the broadband policy will not be a successful one and the case will quickly fall away.