The Government should carve out a multi-billion dollar portion of its NBN investment, pump it in under-serviced or un-serviced regional areas and not expect to make a commercial return on that part of the network, according to Pipe Networks founder Bevan Slattery.In a typically blunt Slattery address to the CommsDay Summit - conservatively titled, 'Why NBN 2.0 will fail...', Slattery issued a blunt warning that a commercial return on a $43 billion network investment in Australia was unlikely and that corners would have to be cut - or alternate rollout options considered - to ensure the network achieved at least some of its ambitious aims.He proposed the option of dividing the network into a section that might attract buyers because it could generate a commercial rate of return and another - primarily for regional and rural areas that had no or "suckful" broadband - where the investment was made to generate productivity, economic and social benefits in those communities."Let's not build for people that already have HFC, ADSL and 3G [services]," Slattery said."Let's get equivalence in this country. We need to accept that is an investment without a commercial return."He proposed - for argument's sake - a figure of $10 billion out of the up to $43 billion to be invested in the NBN be given over to deploy backhaul and carrier-neutral tower infrastructure in regional and remote towns. Such infrastructure, he believed, would attract the attention of 3G carriers who could offer broadband services to residents - a clear improvement on the lack of services currently available in many places. He called the proposal 'NBN 2.1'."This is a serious bunch of coin for regional communities that have been strung out time and time again," Slattery said."It also means the pressure to get a commercial return is not on $43 billion but on $25 billion or $20 billion. I think that's what's really required here... socially responsible investment in non-commercially viable areas."Slattery had warned earlier that Australia couldn't "get a commercial return on building out a $43 billion network.""You can't do it," he said. "I firmly believe you cannot get a commercial return on this [NBN] infrastructure."That harsh reality would become apparent at some point in the project, he believed, and present significant challenges both for the Government and NBN Co.Slattery believed cancelling the project was a "genuine option" because it preserved taxpayer funds and stalled momentum for what he called "negative change". Examples of such change included the Government creating a "monopoly that has to get a commercial return on the asset" and the uncertainty surrounding whether NBN Co could have a retail offering - despite assurances it was focused on wholesale only.Continuing the project in the knowledge it would not generate returns promised would cause issues for Government down the track - such asaccusations that it misled Australians - and "burden taxpayers with debts and requirements for the next 30 years," he said."Ultimately I think the [fibre] rollout will go to between 65 and 80 percent of homes," Slattery said."I don't think it will go much further beyond that. When this thing's not paying out I think that will be a problem [to push ahead to 90 percent]. "The Government ownership of NBN Co could also be 100 percent - prepare yourself for that. I also don't think they will sell out their stake in NBN Co because they can't attract a commercial return for the asset."
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