Australia’s NBN too expensive: EIU

True

Richards analysis of Oz media is correct.. IMNSHO, it is also an accurate assessment of the ruling elites and self appointed clever people, like media owners, intellectuals, (left and right, whatever those tags mean as they are all economic rationalists with collectivist beliefs).

Oz governments and firms bring in some foreigner from completely different geographies and blindly take their advice as unholy writ.

As for the broadband issue, as one who travels across the more densely populated states, I note that phone coverage is unreliable to poor outside all towns below 10,000 usually, despite the misrepresentation of various phone companies Ironically, the ex-government owned telco still has the best coverage and highest prices. This entire technological and policy mess comes from blindly applying thinking from densely populated countries to a large mostly desert land mass that has 15 large cities and a thin sprinkle of small regional centers with even thinner residences and hamlets between them.

It is time Oz citizens rejected the foolish colonial attitudes of their rulers and pundits.

As for the NBN, lets see the figures. Since they are still a state secret, it is a reasonable conclusion it is another example of corporate charity from the taxpayers.

This is Australia, Mate!

I know this may be sounding a bit bitter, but i have yet to seen any government project in Australia that hasn't come in at least three times the initial promised budget.

When looking at the $43 billion price tag it would be more correct to look at it as a $120 billion given history repeating.

Hell, if it goes the way of the Opera House, it will be 16X the cost and take 5 times as long as initially promised.

Private companies are at least held to contract and the country will be compensated if they fall behind deadline and we won't be over charged if they go over budget. Not to mention that their original quotes were somewhere in the realm of $7 billion making them a much more economical choice.

We can not say the same for our government who have proven consistently to be incapable of coming in on time or under budget.

Costs too opaque to tell

Richo may be right about specious claims from what we have a right to expect to be a respectable economic analysis unit. However, the current opacity surrounding NBN costs (as opposed to figures bandied around in press releases) makes even fantasy claims as valid as creditable analysis.

The NBN is currently exempt from FOI laws, and it's anyone's guess what the real costs are projected to be, what real expenditure has already been, and what the actual bandwidth delivered to end users will be capable of. Let's not forget that services currently sold as 'up to 3 Mbps' probably deliver no more than an average 70 Kbps, and Australian vendors are still milking the market according to pricing models that relate to data transfer, not the actual costs of network infrastructure.

A feature of that dynamic is that bandwidth use sometimes exceeds capacity without penalty to vendors regardless of bandwidth promises, and sometimes falls short of capacity but is choked by vendors for no other reason than they can gouge more cash from customers by doing so.

While these shenanigans are going on in the private sector, why should we trust 'guarantees' from politicians (who are not known for integrity or truth) about the NBN, which is controlled by politicians no matter how much they wiggle about 'independent company'?

The truth of the matter is that until the NBN financial situation is completely transparent, or completely divorced from government (including taxpayer funding and state directives on CSOs), a credible financial analysis is impossible.

Spot on!

Thanks for this analysis.

The reporting here on this has been absolutely shocking. I expected little else from the Murdoch rags, like The Australian (once a great newspaper) and the Herald Sun, which just parrot whatever Tony "shit happens" Abbott spouts after listening to his morning Weet-Bix.

However, the supposedly Labor-leaning Fairfax rags have been just as clueless. Possibly less willfully so.

At least the Murdoch empire publications have clear marching orders according to an ideological line. The Fairfax coverage was just breathtaking in its stupidity and ignorance.

In the end...

...it comes down to whether we want our broadband supplied by the corrupt (business) or the incompetent (govt.).

Of course, not long after the tax payer has finished funding it, the whole lot will get sold off to the polliticians' (both sides) big business buddies for a song anyway. Then the pollies take their large pensions and retire to a nice comfy board position.

Good analysis

the hysteria in the local rags is at fever pitch. I am waiting for Abbot to print out the report and start waving it around in Parliament in a similar fashion to Moses coming down off the mountain with the Ten Commandments. If only Conjob wasn't such a dickhead.

If we wait for private sector

We'd stay in digital stone age. This is about Australia mate, here private sector either doesn't have the money or doesn't spend the money on infrastructure.

NBN itself is good, however the problem is with gov. Let's face it, regardless who is in power, it will be always under budgeted (therefore need more than "planned") and horribly delayed.

perspective ?

Good to get some of these big numbers into perspective.

$43 billion over 8 years for NBN - apparently crippling cost to the nation.

$35 billion over 1 year quoted costs for recent floods to the economy.

NBN suddenly looks cheap and affordable.

a little off topic... but I gotta say bravo!

"...credit ratings agencies that gave junk mortgages the “AAA” stamp, thus sparking the GFC (global financial crisis)..."

i was developing for an investment bank while this unfolded and wrote stuff for monitoring portfolio ratings exposure for US RMBS securities - I watched the whole thing in slow motion like a car crash. And nobody in all the media analysis and BS that followed ever really gave S&P and the rest of the rating agencies the slice of the blame pie they deserved. Nice to see a cutting little throwaway spliced into an unrelated article.

2% or 0.2%

The quote from the EIU says 90% of the Australian population lives in 0.2% of the land area.

The later calculation in the article uses 2%, not 0.2% - BIG DIFFERENCE.

It makes a complete nonsense of the calculations in this article.