The problem with govt NBNs

John C. Tanner
18 Jun 2010
National broadband network schemes are plagued by political uncertainties and unrealistic business models, raising the issue of how much government intervention is needed for universal broadband, said panelists Wednesday.
Speakers at a fixed-broadband panel session at the CommunicAsia summit were particularly critical of Australia’s NBN project. Kip Meek, chairman, of UK-based Broadband Stakeholder Group, described the plan as “extraordinary” and a scheme that “departs from the principles of good regulation in telecoms. I worry about it.”
The project, estimated to cost as much as A$43 billion ($31b), involves the establishment of a state-owned carrier, NBN Co. The government and Telstra have been unable to agree on the terms of Telstra’s participation.
Richard Pascoe, partner at Gilbert + Tobin, put it more strongly. “I think we’re in danger of taking collective leave of our senses,” he said, remarking on the amount of money being spent on NBN projects in Australia, New Zealand and Malaysia. “How on earth will these networks make any money?”
Pascoe cited the debate over network neutrality as an example of how difficult it will be for national broadband networks to see a return on investment.
“It’s simply not feasible to treat all packets equally because the applications that will drive uptake of these multibillion-dollar networks will require QoS to be of any value. But who will pay for it?” he said.


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