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National Broadband Plans- Cracks Emerge

Getting Regulation Right Blog Aspect

Two interesting pieces of news that make me feel like a seer. 

First a post titled “Fibre fanaticism overrode proper NBN planning says report” that quotes Australia’s   National Productivity councils draft report as follows,

 Early planning for Australia’s National Broadband Network (NBN) focused on “how best to implement the government’s policy objectives, rather than considering the merits of different options.”

This implies that rather than exploring various options on how to provide high speed broadband to end users, a policy decision on fibre as the preferred mode  and the NBN  as a delivery mechanism was taken. This obviously restricted options.

Thus instead of “conducting a cost benefit analysis to ensure economic efficiency and value for money”, an implementation study was conducted which “did not evaluate the decision to implement NBN via NBN Co” or the macroeconomic and social benefits of implementing a super fast broadband network.

This often happens in Government, but in fast changing field like telecommunications, such costly mistakes lead to long term regulatory headaches and negative consequences in terms of competition, growth and customer service. Please see my previous post on disruptive technology in this regard.

In the short term  NBN is already facing time and cost overruns.

Another news item  about USA’s National Broadband Plan 2010, states that, “major U.S. carriers have started to seek relief from their vow to support the plan as its enormous costs become clearer………..They are persuading state legislatures and regulatory boards to quietly adopt new rules—rules written by the telecoms—to eliminate their legal obligations to provide broadband service nationwide and replace landlines with wireless. This abrupt change in plans will leave vast areas of the country with poor service, slow telecommunications and higher bills.” 

Please see my previous posts on National Broadband Plans and Competition.