Wednesday, 19 June 2013

NBN: Testing is the Coalition are acting in Bad Faith

The whole furore over the NBN between the Government and Opposition is notionally about funding, but is the Coalition acting in bad faith, wanting to "destroy the joint" just because it can, to "prove a point"?

The Opposition claim the current NBN Co plan is "gold plating" and we can save significant money by doing less and deferring an inevitable upgrade to direct Fibre.

There is a starkly simple test of the genuineness of the Coalition's position and policy:
Would they change the funding model and ask the beneficiaries of the NBN for a direct payment? They could ask households to pay directly the extra to put in new Fibre.
Perspective: How much we talking about here?

From all the sloganeering, "Great Big Expensive" whatever, you might think that the NBN investment was a massive drain on the National Accounts.

These are the facts:
  • Currently, Australians spend over $1,000 per household per year on Telecommunications.
  • The NBN will be built over 10 years. The cost/expenditure is spread over that time.
  • The Federal Budget is around $350 billion per year.
  • There are 12 million households, or
    • $30,000 per year per household is raised by the Government
    • $300,000 per household over the life of the NBN Co project.
  • The difference between the NBN Co plan and the Coalition, the actual cost per premise of gold-plating is:
    • NBN Co per premise cost of Fibre: $1,350
    • Coalition suggested cost of Copper VDSL22: $900
      • per premise cost of "gold-plating" $450
      • or $45 per household per year over the life of the NBN Co project
  • The amount in dispute is 0.15% of the Federal Budget and under 5% of what we already pay to the phone companies and ISP's.
The difference has much less impact that that, because we're not paying for the NBN Co project out of taxes. The Government and the Coalition are both going to borrow to invest and build the NBN, and then that will be paid off, actually making the Government money.

Under $50 per household per year is a very small amount to pay to bring-forward a reliable, future-proof Fibre network, with guarantee speeds and an ability to scale up speeds eighty times, right now.

Oh, and the Coalition NBN Plan is to throw away our $900 investment, completely. Either in 10 years or 15 years, well before the technically useful lifetime expires of their VDSL2/FTTN. That plan sounds incredibly profligate and wasteful to me.

Test : Will subscribers pay for the benefits of direct Fibre up-front?

The whole of the divisive and rancourous debate over the NBN is over this one point:
 an extra $450 per household now, or throw-away twice that ($900) per house in 10 years and invest yet another decade and $1,500+ to get where NBN Co wants to go right now.
What looks like a Bad Plan and a massive waste, pouring good money after Bad into worn-out and already obsolete Copper - that we don't even own - gets worse the harder you look at it.

The test is simple and direct and falls dead square in the Coalition Ideology of "user pays":
Ask the voters, the same people who benefit from the NBN, if they'll pay now for the small extra cost to get direct Fibre now.
It's either a $450 payment up-front or $15/month over 3 years. Exceedingly little for a massive upgrade.

In the context of already paying over $1,000 per year to the phone companies, $15/month for 3 years is no impost on customers.

If the Coalition are genuine and acting in Good Faith, why haven't they make the obvious and simple "Put Up or Shut Up" challenge to the electorate?

It's a simple test and one that won't lose them face and can only win them votes. And it is backed by solid, sound financial decision making.

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