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The national broadband debacle: all hail to Senator Conroy.

February 17th, 2009 · Greg Atkinson · 23 Comments

Lost within the turmoil of the $42 billion federal government spend-a-thon and the so called “national economic crisis” has been the issue of the infamous “National Broadband Network”. After ridiculing the Howard government for taking too long to initiate work on this network, all Senator Conroy has managed to do is set things back a few years and we are still effectively nowhere near seeing work start on on this important national infrastructure project.

The national broadband network project makes Australia in technology terms, look like some quaint small country were people still gaze into the sky in wonder when they see an aircraft.

In my home office in Japan I have a lovely 100 Mbps fibre connection with two IP’s phones connected and no download limit, whereas back in Australia the government has committed “to provide up to $4.7 billion and to consider necessary regulatory changes to facilitate the roll-out of a new open access, high-speed, fibre-based broadband network, providing downlink speeds of at least 12 megabits per second to 98 per cent of Australian homes and businesses.”

Wow..we are so into the future in Australia…12 Mbps!

Back in mid 2007 the former Howard government actually set things in motion and a consortium called OPEL Networks (Optus and Elders) secured (well sort of) $958 million in government funding to roll out a broadband network to regional and rural Australia. Rudd and Co. while in opposition were critical about what they perceived as being slow progress in this area, and yet when they took office in late 2007 they cancelled the funding for OPEL and set everything back at least 2 years. Well done team Rudd.

According to the Optus June 2007 Press Release (the full press release can be found here) the proposed OPEL Network was aimed to (amongst other things):

  • Deliver wireless broadband speeds up to 6 Mbps rising to 12 Mbps by 2009 and up to 20 Mbps on ADSL2+.
  • Use a total of 1361 Broadband Wireless sites comprising: 438 in New South Wales; 339 in Queensland; 117 in South Australia; 45 in Tasmania; 296 in Victoria; 113 in Western Australia; 10 in the Northern Territory; and 3 in the Australian Capital Territory.
  • Target a principal market of 3.7 million rural and regional premises. An additional 5.3 million premises could be served on the fringes of OPEL’s broadband wireless network where there is already significant competitive broadband infrastructure.

So if the Senator Conroy had simply left things alone better progress would have been made. Even allowing for the usual project delays we now would have been at the stage where regional and rural Australia would be gaining access to a broadband network, and more importantly this work would be employing people at a time when Australian is trying to avoid recession.

But has the media jumped on the fact that Rudd talks about “shovel ready” projects when his Minister (Conroy) and himself actually cancelled a major national project as soon as they came to office? How many new jobs were not created because of that decision? (Is anyone awake in the Opposition I wonder?)

As for broadband in the major cities and urban areas, we just need the Government to get out of the way and let the telecommunications companies sort that out. There is money to be made in rolling out broadband in these areas and the telco’s will go chasing that. After all we did not need any grand government plans to get PayTV or 3G rolled out did we?

There are two major obstacles in getting a true broadband network rolled out across Australia. One is the Minister:  Senator Stephen “never held a private sector job in my life” Conroy, and the other is the bizarrely named Ministry he heads up – the “Department of Broadband, Communications and the Digital Economy”.

What exactly that Ministry is suppose to do or manage is beyond me and even after visiting their website I am none the wiser. I suspect it has been set up along the lines of the Ministry of Silly Walks and that we can expect the national broadband network to get the full “Silly Walks” treatment, as indeed it already has. If readers are not familiar with the Ministry of Silly Walks then please see the clip below. (Just replace John Cleese with Stephen Conroy and you will get the idea)

What should really scare people about this debacle is that is shows that the Rudd Government is unable to manage a national project even when it is “shovel ready”. According to various media reports $11 million has been either spent or set aside for consultants to help advise the government regarding the national broadband network.

Apparently $4 million has already been spent on consultants and all we have seen so far is the OPEL plan scuttled and the network put out the tender again. If this sort of overhead was applied to Rudd’s $42 billion economic stimulus package then we can kiss goodbye to around $100 million for starters even before the state governments start to spend their share on another layer of consultants. Great work Stephen, I can see why you stuck with jobs where business skills were not needed.

However in the midst of all this broadband chaos there are a few things we can be sure of.  Firstly that there will be no national broadband network in place within this decade and secondly, what ever solution is finally decided on it will simply put Australian broadband back to where other developed countries were years ago.

The best outcome for taxpayers at this stage therefore would be for the government to go back to OPEL (say sorry) and green-light the rural broadband network, and then just get out of the way and let Telstra, Optus, AAPT etc. rollout a solution for the city areas as market forces demand.

23 responses so far ↓

  • 1 Cracker Barrel // Feb 18, 2009 at 7:04 pm

    Is it just me or does everything that you write about, somehow has something to ridicule the Rudd Govt ?

  • 2 Greg Atkinson // Feb 18, 2009 at 9:33 pm

    Cracker it must be you. Check my posts and you will see I write about many things totally unrelated to the Rudd Government. In any case, feel free to post some positive comments things about Rudd and Co.. all views are welcome here.

  • 3 Greg Atkinson // Apr 7, 2009 at 1:08 pm

    Goodness me. It seems the solution to our broadband problems is more government involvement. By the time the network is rolled out (and there will be delays) we should be able to have a broadband network the envy of Fiji.

  • 4 Pete // Apr 7, 2009 at 5:49 pm

    Haha it’s a nightmare thats for sure. I’d rather they waste money on this than on stimulus packages though.

    The thing that worries me is the control/censorship.

    Conroy is a f$%khead (excuse my inability to find a more appropriate word). I appreciate that he may have been told to implement the censorship thing – but he’s a superbly smelly ‘number 2’.

    I saw him on a debate (QandA on ABC) a few weeks back – man does he have a lot to answer for. So much for democracy.

    Anyway, the only positive that came out of all of this is the fact that Telstra is completely out of the picture (still can’t believe Sol got that bonus…again).

    On a side note, less Rudd bashing will make you more popular with the Gen Y’s. You can blame the “Government” but the honeymoon isn’t over with Rudd yet.

    Positive things about Rudd:
    – he doesn’t have the Costello smirk (I just want to punch it every time I see it)
    – he isn’t Howard the ignorant liar
    – he’s better than Beazley, Crean or Latham (although I kinda like Latham strangely enough)
    – he can speak well (even though it is Public Service Ruddish)
    – he doesn’t have massive eyebrows
    – he doesn’t have Tony Abbott or Joe Hockey in his party (okay that wasn’t his choice and isn’t really related)
    – he tries hard (seemingly)

    Thats about it. I don’t love Rudd, I just thought i’d step up to a challenge. And a challenge it was! Who can say anything positive about politicians anymore. Although I could say some nicer things about Keating (ironically because he’s not very nice himself) 🙂

  • 5 Senator13 // Apr 7, 2009 at 8:44 pm

    John Howard – love him or loath him – you knew where he stood on every issue. Nobody can argue with that. Now with Rudd, there is a LOT of fuzzy gray area.

    John Howard was a man of character and always carried him self in a very prime ministerial way. There were no two John Howards, the one everybody saw is the one everybody got. Unlike Rudd, who has his public face and his cameras-off behind closed doors persona. The two Rudd’s are very different and it is becoming more evident everyday.

    People often accuse John Howard of not investing more during the ‘boom’ years. Okay, some areas he could have progressed further, but that said, he did not piss it all away either. Jobs were created, wages went up, household wealth went up, and he ran good, save budgets. He did leave the current Government with a massive surplus which is more then what Keating left for Howard. These are all pretty good things and most things did improve under his watch.

    Rudd’s honeymoon seems far from over, especially if he keeps churning out nice big juicy billion dollar headlines like today’s broadband scheme announcement.

  • 6 Greg Atkinson // Apr 8, 2009 at 12:00 pm

    I think the approach by Rudd and Co, in regarding to the NBN should really scare people because:

    1. They have no business case. They actually have no idea how the network will make money and only a vague idea about how much it will cost.

    2. The are using government power and tax payers money to attack a corporation. (Telstra) When Putin did something similar in Russia this was seen as undermining democracy.

    3. The network the government will rollout will not be completed on schedule and even if it is will be basically obsolete. 100 Mbs is the speed I have now at home in Japan, in 8 years time Japan will have moved onto much faster broadband speeds and thus after billions of tax payers money Australia will still be broadband laggards.

    4. Broadband should be left to the private sector, there are far more important areas where the tax payers money could be used. (like supporting renewable/alternative energy). Just remember we have 3G mobile networks across the country and this did not require a single government cent.

    There is no doubt Australia needs a world class broadband network, but how did we ever get into the situation where the tax payers will end up paying for it!

  • 7 Senator13 // Apr 8, 2009 at 4:36 pm

    When asked how much it is going to cost Conroy responds “To try and suggest that we have to be able to announce a price the day the company is founded is quite ludicrous.” What a dumb statement to make. This is just more policy on the run and typical Rudd trying to grab a headline. If you are going to be spending that much money for such a big project, you need to have costings done and a comprehensive plan. By the time it is finished, it is going to be old, no one knows how much it is going to cost the consumer, and the bush is going to be no better off then under Telstra. It is just going to be a mess.

  • 8 sid // Jul 16, 2009 at 6:18 pm

    Typical big spending socialist government. They spend , we pay .History repeats it self again and again. Problem is we don`t learn from our mistakes.
    Howard and co. must be mortified to see all their good work eroded in such a short time. I know I am.

  • 9 Senator13 // Jul 17, 2009 at 1:57 pm

    Good point Sid. The debt and deficit actually happened a lot quicker and on a much greater scale then I ever would have thought.

    Paying off Keating’s $96b debt looks like child’s play compared to Rudd’s $315bn.

    I do not envy the next Liberal Government. I think they are going to have to come in and play the role of the ‘bad’ guy and do some serious spending cuts. They are also going to have to wean the public off handouts. I think people have become expectant of them in recent years.

    If Rudd gets a second term, I do not see him starting the paying off debt process… His own vanity can’t take being perceived as a ‘bad guy’.

  • 10 Greg Atkinson // Oct 27, 2009 at 6:55 pm

    Conroy strikes again. Does anyone actually believe this guy will ever deliver the NBN on time and within budget?

  • 11 Senator13 // Oct 27, 2009 at 7:27 pm

    Greg, how many blunders will it take for people to say enough is enough – this plan is a mess? This project blows out by tens of billions and discloses commercial in confidence information and it is just one blunder after another… If this was a defence project the public and the press would be in hysterics. But Conroy just seems to be able to drift through all of this? What is going on?

  • 12 Greg Atkinson // Mar 2, 2010 at 9:51 pm

    Conroy is a walking technology disaster zone. Only the government would have such a person overseeing such an important and expensive technology project, in the private sector Conroy would not even get a job as the tea lady.

    The NBN mess is a good example why you never let the government near anything you don’t have to.

  • 13 Anon // Mar 3, 2010 at 6:50 am

    I’ve given up on this Government. Why did we elect them again? Thats right because we wanted something different. Well we’ve got it, a used car salesman and his mascot sidekick Swanny.

    I will personally be voting for Abbott next election — it was the Liberals that gave Rudd the ability to avoid a recession. From his actions thus far, he has shown little discipline and policy decisions appear abrupt and rushed. We’ve got cost blowouts with his laptop for every student idea, cost blowouts on the NBN, poor risk assessement on the insulation bungle. Theres a worrying pattern here.
    I’ve never seen someone do well when they try and fix too many problems at once (this from personal experience). Rudd is realising this now…but that just questions his judgment even more !

    We need to get him out before he does too much more damage. I think the electorate are starting to have flashbacks of the Hawke/Keeting era where we just kept going into further and further debt and media spin, not to mention the idiots running the states.

    I have no idea why Labor cant become more disciplined. Its just the samething over and over with them and time changes little.

  • 14 Ned S // Mar 3, 2010 at 12:14 pm

    Now they’ve had a few practice runs on some small stuff (the NBN and insulating rooves) they reckon they are ready to take on the Health Care system … Gutsy call! 🙂

  • 15 Anon // Mar 3, 2010 at 12:21 pm

    Oh god, can you imagine what healthcare will resemble 5 years from now.
    I think he’s already stuffed up some of it. He says he spent more on hospitals but he directed more traffic to them from capping the bloody private health subsidy and taking incentives away. What an idiot 😛
    Is it possible for Rudd to only have one term? Abbott does look like a compelling alternative…who will you vote for Ned?

  • 16 Anon // Mar 3, 2010 at 12:56 pm
    Geez, I think we really need to be concerned here. He gets deeper into the hole and wants to take on bigger and bigger issues without successfully tackling the ones hes tried to fix.
    This looks like he’s just fueling his ego and narcissistic supply rather than helping anyone efficiently and meaningfully.

  • 17 Ned S // Mar 3, 2010 at 1:58 pm

    When it comes to politicians, I don’t have much faith in my ability to choose the lesser of evils Anon. My natural inclination is to favour the mob that wants to cut welfare and taxes and encourage people to save rather than spend up big using borrowed money. And that believes the appropriate target range for inflation is between -1.0% and +1.0%.

    If I ever hear of a party like that I might motivate myself to trundle down to the local school on polling day and give them my vote. But I doubt I’ll be called on to exert myself anytime soon.

  • 18 Greg Atkinson // Mar 3, 2010 at 3:11 pm

    Rudd & Co are really starting to scare me now as opposed to annoying me immensely. I cannot think of a major project they have managed correctly and as I have said before, we were lucky to avoid a recession (for now) and it was not because that the RBA and Government are economic geniuses.

    You want to cut down hospital waiting times hey? Well encourage people to take out private insurance and let the private sector provide some competition. What we need is competition and consumer choice, not a central socialist planning bureau.

    I swear every time I check the news Rudd and Co have created another committee, study group or department.

    I hope people wake up before all this turns into a nightmare.

  • 19 Ned S // Mar 3, 2010 at 4:12 pm

    They just don’t have any runs on the board. They’ve got to go into the next election based on future promises. Because the track record pretty much boils down to:

    * Said Sorry to the ATSI people
    * Introduced a temporary bank deposits guarantee
    * Handed out a bunch of cash
    * Did a FHOG thing that made expensive housing more expensive
    * Flitted round the world chatting about the GFC
    * Backed an ETS that the US and China aren’t interested in
    * Stuffed up a roof insulation scheme

    Have I missed anything of significance???

  • 20 Greg Atkinson // Mar 3, 2010 at 5:43 pm

    Only apart from the fact that they complained that under the Howard government did nothing about broadband, then cancelled the OPEL contract and set everything back 2-3 years.

    Oh and then they relaxed border control measures that opened up the floodgates for people smugglers.

    But they did hold the 2020 Australia Summit!

  • 21 Ralph // Mar 4, 2010 at 1:48 pm

    That’s a great list of Labor’s achievements. Not much to go to the people with and plead for another term. Quite pathetic really. I would imagine that Kevvie is a scared little boy right now and rightly so. He should be ashamed of how little he’s achieved.

    On the topic of health and every other state-based matter, I reckon they just make it more complex than it needs to be. The states live off the GST but aren’t accountable for it.

    I don’t understand why the Feds couldn’t just give the states some GST funds conditional on doing something that the Feds want (i.e. health, national curriculum etc). I mean is there a valid reason why we need different regulations in every state? Anyway, the Feds then audit the states to see that the actually spend the GST on what they said they would. If they didn’t, the Feds would then reserve the right to dock their funding in that area the following year. I might be missing something simple, but over complex proposals like this health thingy just seem like over-cooking the goose to me.

  • 22 Greg Atkinson // Nov 17, 2010 at 12:52 pm

    Can the situation with the NBN get any worse? We now have Conroy arguing with the OECD because even they think his NBN plan is flawed. To make matters worse Julia Gillard’s ‘transparent’ government refuses to let the Productivity Commission study the NBN plans in detail. It’s a mess.

  • 23 Senator13 // Nov 21, 2010 at 9:56 am

    So much for the “New Paradigm”…

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