The NBN scam -already an abject failure

Aug 07, 2012, 04:23 AM

Is there anything the Gillard government cannot handle competently? That socialist monopoly, the NBN, was born on the back of an envelope when communications minister Stephen Conroy managed to obtain an audience with Kevin Rudd on the prime ministerial jet . There is no cost benefit study and the billions - over $40 billion - are all off budget. They could pour $100 billion into the NBN and it wouldn't appear in the budget. It would have no effect on the surplus or deficit. What an appalling scam. The initial NBN plan was released in December 2010 by Julia Gillard. Kevin Morgan, who was the ACTU member Kim Beazley's advisory committee on telecommunications, says that plan is now in tatters. At the time, corporate advisers Greenhill Caliburn reported that “that, taken as a whole, the corporate plan for the development of the NBN is reasonable." That report cost $1.1 million. But the NBN has achieved only 9 per cent of its rollout target for homes passed by fibre and 3 per cent of the planned connections where customers are hooked up to broadband. Based on its initial estimates, by June this year 317,000 households should have been passed with fibre and 137,000 homes actually connected to a broadband service. Writing in The Australian on 7 August 2012 Kevin Morgan points out that fewer than 25,000 homes had been passed and fewer than 4000 connected.

He says this is not just a debacle. Its an abject failure by NBN Co, especially in new (greenfield) housing estates. Lessr than 20 months after predicting that 172,000 greenfield premises would be passed and 132,000 connected, 0.6 per cent of the coverage target and less than 0.2 per cent of the active service target have been met.
Kevin Morgan says many homeowners will have a long wait for new telephone services. But if NBN Co is failing dismally on delivering the fibre promised to 93 per cent of homes, he says it is at least making progress on its wireless and satellite services for the other 7 per cent. That's because NBN Co has little active involvement in building either. These have been fully contracted out, albeit at considerable cost. The average capital cost of the wireless and satellite services will be about $14,000. Given each service will yield less than $300 a year in revenues; these rural services will require ongoing annual subsidies of at least $3000 a year per service. In contrast, Optus and Telstra are building far faster new-generation mobile networks at a cost in the hundreds of dollars, not thousands, for each customer. To repeat, is there anything the Gillard government cannot handle competently?