Conroy hits out at Abbot & Smith NBN threats

Communications minister claims NBN will lift Australia to the top of world rankings in broadband access

The communications minister, Senator Stephen Conroy, has hit out at the Opposition’s threats to scrap the National Broadband Network (NBN) should they take power.

In a statement, Conroy said any moves to rollback the NBN would “risk Australia’s economic future”.

“The NBN is crucial economic infrastructure. Without it, Australian companies will not be able compete with the likes of Japan, Korea or Singapore,” Conroy said. “Mr Abbott wants Australia to fall behind our competitors in Asia and around the world.

“Tony Abbott is also threatening the 25,000 jobs that will be supported every year of the NBN rollout.”

(See a slideshow: NBN Co details fibre roll-out plans )

In early April, the Federal government used the first-year anniversary of the NBN announcement to tout the progress of the $43 billion mega-project.

At the time Conroy claimed that the commencement of the NBN rollout in Tasmania late last year, the launch of the $250 million NBN Regional Backbone Blackspots Program in December, the March launch of Mainland Australia NBN trial sites, and several NBN Co industry consultations were proof that significant progress had been made on the NBN.

But this was preceded by ongoing criticism from the Opposition, with shadow communications minister, Tony Smith, recently calling the project a “reckless adventure”.

“None of the Conroy babble can hide the fact that after two and a half years, Labor’s only broadband outcome has been to prevent 900,000 under-served households from receiving better and more affordable broadband through the cancellation of the previous Coalition Government’s OPEL contract,” Smith wrote on his official website.

Smith wrote that the Coalition believed there were better ways to drive a comprehensive upgrade of Australia’s broadband infrastructure both nationally and in under-served areas, although he didn’t provide further details.

“The Coalition will be looking to implement a very different, responsible and targeted approach that will be designed to deliver better, affordable, reliable broadband services where they are needed without a reckless waste of taxpayer’s funds, as well as encouraging the private sector to upgrade broadband infrastructure,” Smith wrote.

The Rudd Government first announced that the NBN Co would be established to build and operate a new, wholesale-only, open access, high-speed broadband network on 7 April 2009.

Today, Conroy reiterated the project’s progress and claimed the NBN would “lift Australia to the top of world rankings in broadband access”.

In recent weeks, debate over the cost of the network and the lack of a business plan provided by the Government, along with debate about whether the company responsible for rolling out the fibre-to-the-home (FTTH) network, NBN Co’s view that its return on investment could take up to 20 or 30 years have hit the headlines again.

However, while debate still rages over the potential costs to consumers and NBN Co’s financial returns, little focus has been placed on the potential GDP growth high-speed broadband networks offer.

When the NBN was first announced, conservative estimates by economic think-tank, Access Economics, suggested a fibre to the node (FTTN) national broadband network (NBN) would provide between $8 billion and $23 billion to GDP over 10 years.

In a report titled, The economic benefits of intelligent technologies commissioned by IBM, Access Economics also claimed an investment of $12.6 billion in FTTN technologies would provide 33,000 jobs by 2011 in an economy operating at less than full employment.

In deriving the estimates, the report’s authors noted there is “insufficient data to accurately quantify the full economic benefits” of high-speed broadband. As such they decided not to use the Government’s proposed $43 billion NBN (FTTH) plan as a basis for the report.

However, the authors noted while an FTTH NBN would involve greater upfront capital costs, there was potential for greater benefits.

The NBN could also be substantiated if it’s used to reduce the cost of services in other key economic sectors, according to an OECD report supporting the development of national FTTH networks.

The research found that the cost of building high-speed broadband networks can be recouped through the delivery of online data services in electricity, health, education and transportation services.

The report, by the OECD Working Party on Communication Infrastructures and Services Policy, indicates cost savings in each sector would need to be between 0.5 per cent and 1.5 per cent over 10 years to justify building a national FTTH network. Notably, the OECD has also joined the chorus of parties calling on the Federal Government to provide a business case for the NBN.

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