All manner of news on broadband today. First up, CEDA (who published my 2006 report on the subject) have released a new multi-authored report today. You can download it here. One of the main themes is that if Telstra should get the NBN it should be forced, a la my argument put forward a couple of years ago with Jerry Hausman, to divest its cable network and Foxtel stake. That would promote structural competition. See also this write-up in Business Spectator.
Also today, the Australian Industry Group’s Heather Ridout responds to my series of articles on broadband in The Age.
However, the obvious omission from Gans’ analysis is that the NBN is needed for a wide range of reasons, only some of them economic.
You can read her full article here. So what are those reasons? First of all, there is the fiscal stimulus element. Of course, I argued that one a week later in the AFR. No disagreement there. Her second reason is that according to the AIG’s own survey business wants it. OK, that’s nice but government handouts to business aren’t the greatest rationale for public expenditure. Third, she thinks that those who live remotely shouldn’t have lower quality service.
Remote and rural communities, which have already seen so much physical and social infrastructure shift away, should not be left behind in the roll-out of high-speed broadband. Put aside that such communities are likely to see disproportionate economic benefits from being better connected to the rest of Australia and the rest of the world; a two-speed broadband deployment would call into question that very Australian notion of a “fair go”.
Well, potentially more agreeement there. So why spend most of the money in urban areas? If we want broadband in regional areas we should have policy designed to get just that. Of course, Ridout says that wireless is said by many to be inferior and so they should get wired technology too. However, that seems to me a very unbusinesslike argument. The case for broadband is there but the way of getting it is an open issue. We should not accept blind adherance of a two year old election promise.
