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Tuesday, 7 April 2009

The 100mbps broadband proposal that Malcolm Turnbull is predictably savaging in the press brings out a whole set of collateral issues for debate. The built network would mean ‘re-nationalising’ telecommunications, one analyst has already noted.

There is also no sign yet as to what consumers would pay on a monthly basis, so Turnbull has hit the right note in asking why householders would pay $150 per month for much faster broadband.

Imagine being asked to pay high charges for a carriage service provided by a monopoly. We’re returning to the bad old days before the market was opened up to competition.

It will take, thinks the government, eight years to build the network, after which bureaucrats would wait five years before selling off their mooted 51 per cent stake. To whom?

Regardless of how broadly the company were held, it’s still a monopoly. While making Telstra’s control over home connections obsolete might cause some to celebrate, we can nevertheless now choose whose monthly bill we pay. With the new network we’ll have no choice so we can be charged whatever the boffins deem appropriate for the privilege of having a fast connection.

Caveats on the sell-off are also problematic. The government says that it will sell off its stake “after the network is built and fully operational, depending on market conditions and national and identity security considerations”, according to The Australian.

This rat’s nest of conditions can mean the sale might be delayed indefinitely, as the government could say that the network was not complete (how many big systems never entail constant tweaking) or that ‘national security’ could be threatened if the system were put up for sale by scheming private operators. Just imagine what the headlines would look like if a foreign entity were to seek participation in the tender process.

We await further clarification. Despite Turnbull’s bullish turn in the media at least it serves as an invitation to make more information available. And we might start to hear the pundits groan and yell as the journalists on the case hit the phones. With any luck we’ll be spared a ‘shitstorm’, but I have doubts.

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