Oz government to put dark fibre net on the auction block The Australian government's dark fibre network, ICON, is one of the many assets slated for sale under tonight's federal budget announcements. ICON – the Intra Government Communications Network – has a total of 150,000 km of dark fibre linking 400 sites in Canberra, and is used by 88 agencies. The Department of Finance says the …
Sell assets, privatise; sell assets, privatise.
Use public money to build something then sell it to the private sector who will sell it back to the government or the public at a higher rate.
What's not to love?
I mean, really, anyone who claims that privatising assets will not raise prices is a liar and anyone who believes them is an idiot because the simple truth is that public services/utilities can run at much lower profit margins than the private sector.
This is why the NBN was so important - there were many, many areas that were poorly serviced by the existing providers because those locations were not 'commercially feasible' to install high-speed connections. A government (i.e. public-owned) provider is able to run with very slim margins - or even at a loss, subsidised by public money, if it is important for the economy that the service be widely and cheaply available (like transport).
We get told that selling assets is necessary to invest in infrastructure but that falls down when you know that the proceeds will get thrown away through poorly-managed, wasteful, gold-plated contracts that balloon out and act as little more than ways to funnel public money into large private pockets. And, of course, whatever infrastructure we end up getting for our money will just get sold to the private sector later anyway.
There's a reason companies like government contracts - they are nearly inevitably far juicer that those in the private sector and the contracts themselves are so poorly managed that they become a license to print money. Overruns and failures just mean more money and there are almost always nice, fat maintenance contracts, which can also balloon out.
Except that NBNCo fits the exact model that you object to. Labor's plan was to sell NBNCo as soon as possible (e.g. it started to show a profit).
In an ideal world, government enterprises would be the most efficient, but in the real world this rarely true. Competition forces private industry to take risks and make hard decisions or disappear. In government it often appears that that decisions will be delayed and extra features added because of an issue impactiong on 0.01%.
Government contracts carry a higher degree of risk because of scope creep and changes in the political climate.
@matthew42
Except 'efficient' mean 'profitable' and the 'hard decisions' you talk about are things like laying off staff, closing branches/services in lower-performing areas and upgrading only those locations/services that make the most money.
And that's the problem.
I get what you're saying but the result of all that 'efficiency' is that people who would be less profitably for these private enterprises will end up as the 'poor cousins' of those in more profitable areas. With broadband access, you have people in 'regional' areas who are currently very poorly served by the existing 'efficient' private enterprises.
I, personally, have clients who are only able to get ADSL1 into their office. Some of these were able able fork out for fibre links - at quite the cost - while others have to make do with low speeds.
You might say 'tough' - user pays - but even some cursory thought into the matter would show that Internet connectivity has is, in this modern age, become an essential business infrastructure - as important as phone and mail services have been*. Or transport. One might even say that with good Internet connectivity, you can work around issues like poor transport or mail services.
So, given that Internet connectivity is an important piece of business infrastructure, it stands to reason that good Internet connectivity is good for the economy. And, given that, as our cities get busier we are trying to encourage more development of 'regional' areas, good connectivity in those places is vital for this and therefore for the future of our country.
Good infrastructure means more business investment, means more jobs, means more people staying in regional areas rather than moving to the cities, means less commuting, means less traffic, etc...
The more businesses that set up in regional areas, the more people those areas can support, means the more businesses will open up their, creating more jobs. There's a reason 'cities' are the way they are - they have transport hubs and businesses, meaning that people work there so more businesses open up there and so they grow.
That got away from me a bit but the simple point is that some services are essential and good for the country as a whole, regardless of whether you, personally, will benefit directly. These services are prime candidates for running publicly and, yes, subsidising in areas where a pure, private, 'user pays' regime will not work.
'Efficiency' is not the prime concern in these instances. Or at least shouldn't be. There must be a long-term vision and for it to work rather than analysts hawkishly looking over quarterly profit reports. Say what you will about our politicians and the slapdash way the (original) NBN was handled but it was certainly a long-term vision with fibre-to-the-premises. The new 'vision' is decidedly shorter-term, which people coming out and saying the equivalent of '640KB should be enough for anyone'.
* - After all, e-mail and VoIP and cloud services like Skype and dropbox and so on have supplemented and in some cases replaced these traditional services.
The only comapny to benefit from buying this will be Telstra. Telstra benefits if it doesn't buy it either as all the government agencies will have to purcahse fibre from Telstra to replace their ICON links.
As all government agencies have exclusive telecommunication provider arrangements, ICON will lose customers left right and centre and not be a viable business. So unless Telstra buys it, the selling of ICON will be pointless as the company will fold.
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