A " Cheaper " NBN ?

Remember the furore over the National  Broadband Network  ?   We were told that it was essential to bring Australia into the electronic age and what we eventually got was years behind schedule and grossly over budget, and to  make matters worse, it failed to deliver the  speeds we were promised.

The NBN was funded out of the pockets of the taxpayers and it is owned by the Federal government.  Subscriber takeup has been slow for two reasons.  The fees demanded deter many people and it has an active competitor in the mobile phone system, with an updated 5G system coming into service later this year.

The NBN cost to subscribers is dictated by the access cost charged to the telcos who distribute the service to homes and businesses across the nation. Getting a connection requires negotiating service provision through Telstra, Optus,Vodaphone or TPG.  If the government chooses to lower that access cost this NBN service would be reflected in a drop in monthly bills to subscribers.

Such a price drop is being resisted on the grounds that is would delay moving the Federal budget into surplus.   The government expects the NBN will deliver revenue of $ 5.6 billion annually by 2021 and this represents a return of 3.2% on the amount invested in NBN.   To reach that return the user cost would need to average $ 51 per months.

Perhaps that 3.2% return is optimistic in the financial market that currently prevails.  It is far more than self funded retirees can hope to achieve when investing their nest egg and many in the money market would deem it unrealistic.   The NBN was created from taxpayers funds and if it is as essential as has been suggested its provision should be regarded as an essential service.

One of the problems is the NBN is still a work in progress. It has still to reach some parts of the country and provision must extend to newly created housing developments.  There is also the cost of maintenance and the ever developing world of electronics may find new usage that strains space availability.

There is always the possibility that some time in the future an Australian government may consider selling the NBN to relocate the capital into another needed direction.  That is exactly what happened when state governments sold their electricity interests and this created the power shortages we are presently experiencing.

The need for funding power generation renewal became a commercial decision to the detriment of reliability.  That decision is no longer in government hands and consequently we have both power shortages - and elevated prices for the electricity available.

It may be a wise decision to lower NBN access costs to achieve the widest possible coverage and cement NBN in place on the national scale.  It was created with taxpayer funds, and taxpayers expect a dividend by way of relief on what it costs to access this service.