Why does the Coalition not support Labor’s National Broadband Network?

The Gillard Government’s $43 billion National Broadband Network is a risky plan that lacks transparency, stifles competition and will lead to higher prices for internet access.  It has been launched without any detailed evaluation of its costs and benefits.

There is no doubt that some parts of Australia suffer from poor broadband services – in particular regional and remote areas, and ‘black spots’ in the suburbs of the major cities where access to ADSL is constrained. The Coalition is committed to addressing these deficiencies and investing in improved fixed, wireless and satellite services.  In fact, had the Coalition been elected in 2007, vastly improved broadband would already be available in most regional and remote areas.

However, there are key problems with the Gillard Government’s proposal to connect every house in Australia with fibre:

• • The NBN will increase the cost of the internet.  After 15 years of falling real internet prices, the Government’s implementation report forecasts the NBN will steadily increase real prices over the next 10 years to try and earn a return on its investment.
• • The NBN will duplicate existing infrastructure and therefore waste money. Private companies have spent billions building fibre, copper and HFC networks which NBN now plans to duplicate, overbuild or tear up.
• • The NBN will hurt consumers by removing choice.  NBN’s deal with Telstra will mean removal of the copper network across most of Australia – whether customers want it or not. Labor is considering placing other obstacles in the way of potential competitors. These arrangements will very likely breach laws protecting consumers and promoting competition and can only be rendered lawful by special legislation.
• • The NBN is unlikely to deliver value for money.  The implementation report relies on ambitious assumptions to suggest taxpayers won’t lose money.  For instance, it assumes customer take-up of between 70% and 90%.  Similar fibre roll-outs have attracted take-up rates of only 25% in the US and 40% in South Korea.
• • The NBN will not provide what recent trends show that consumers want most of all - mobility.  Telstra reports that demand for wireless broadband has grown by 109% annually over the past three years.  Over the same period demand for fixed broadband has been relatively stagnant. The implementation study courageously assumes that the arrival of the NBN will reverse this trend.

Despite all these concerns, the Government refuses to conduct a thorough economic analysis of the project or consider any alternative approaches to improving broadband services. Having established a high powered agency, Infrastructure Australia, to assess national infrastructure priorities, the Government has refused to allow it to evaluate the NBN.

The Coalition will continue to hold the Gillard Government to account on the NBN and offer common sense, affordable alternative policies that ensure all Australians have access to high-standard broadband services at reasonable prices.