Terry McCrann has a ripping commentary today on the NBN:
Figures released by new communications minister Malcolm Turnbull yesterday showed that Labor’s NBN was a gold-plated disaster, getting progressively more disastrous.
…Under NBNCo’s initial corporate plan in 2010, on which all the extravagant claims about the NBN – and the commitment to spend $40 billion, going on $60 billion – were based, it was supposed to have passed 1.27 million premises by June 30 this year.
In the last corporate plan, which the public got to see, issued in August last year, that target number had been dramatically scaled back to just 341,000 premises.
It’s important to understand, that “premises passed” is not what you might think it means – it’s just that the cable’s gone past. As much as one third of premises so passed are what are termed in NBNCo-speak “service class zero” premises. In normal-speak, that means you can’t hook up even if you wanted to.
Well, that was the already pathetic target from the billions of dollars spent. The actual number of premises passed by June 30 turned out to be just 208,000 – a mere 40 per cent shortfall on a target that was barely 10 months old.
…As at June, the last number we have, just 33,600 people were actually signed up to the fibre broadband, when back in 2010 the NBN was justified and sold on the basis that 1.27 million Australian homes would be hooked up by this year.
…NBNCo’s draft corporate plan in June – which Albanese kept hidden – had cut that number to just 981,000.
And now, Turnbull tells us, NBNCo says it has “revised” this to just 729,000. That’s barely half what it and Labor misleadingly claimed we were heading for, running down to the election.
If Turnbull needed a reason to sack the board, this alone would be more than enough.
Perhaps. But what is still missing in my book is a decent cost-benefit analysis that takes in the economic benefits as well. That may well show that cost blowouts are still worth it.
For Alan Kohler meanwhile, the cost benefit analysis of Malcolm’s Turnbull’s plan is clear:
…the NBN’s forecast return of 7.1 per cent, something only a government would be satisfied with, depends upon it being a monopoly wholesaler – a socialist throwback in which the State owns the means of communication.
…Coalition policy, for which it has both a mandate and an obligation, is based on the more contemporary notion of competition.
…The change that matters with the change of government is allowing Telstra not to migrate all of its customers to the NBN, and allowing firms like TPG Telecom to connect the most profitable parts of the cities to its own wholesale fibre networks.
It is a matter of ideology. Malcolm Turnbull is right: the technology doesn’t matter – FTTN will be fast enough, and if the 7.1 per cent IRR can be improved with more copper, it should be done. And who’s on the board doesn’t really matter, as long as they are sentient beings who know how to recruit and govern.
What matters is whether it’s a wholesale monopoly. If it’s not, best to cancel it now while we still can.
We appear to be migrating from an expensive and low return utility to a bottomless pit.
