Consensus evaporates on NBN model

Are we back to Square One?

The National Broadband Network faced an "uphill battle" in coming days and weeks as the lack of research undertaken to justify its rollout caused the already fragile industry consensus on the project to further fragment, analyst Ovum said.

Research director David Kennedy told iTnews that although there was still a "lot of interest" in the network, "governments need to understand that to support a project of this magnitude of the time necessary to complete it requires some pretty substantial policy support".

"We don't know [NBN's] a bad idea but we can't prove it's a good idea, either," Kennedy said.

"That's why we're in the position we're in."

He said that during the election campaign the "telecommunications industry seemed firmly behind Labor's plan" and that "doubts about the cost of the project had been put to one side".

But the lack of result from last month's election saw many doubts resurface.

The Coalition drew "roughly level" with Labor following the poll, lending credence to its vastly cheaper proposal.

The industry had begun to publicly fragment, with dark-fibre owners and wireless operators banding together under the Alliance for Affordable Broadband to suggest an alternative model to the fibre-to-the-home network.

And network architect NBN Co called a halt to its rollout while it waited for an election outcome that would determine its future.

The doubts were having a destabilising effect on the NBN project, he suggested.

"If Labor is able to form a government with the help of the Greens and rural independents then the NBN will proceed, most likely with a strong focus on rural areas in the initial phase. But there is no guarantee that such a government will last a full term," Kennedy noted.

"The political differences between Labor and the Coalition parties mean that any change of government would mean the end of the NBN, so the project is overshadowed by political uncertainty for the foreseeable future."

Cost-benefit analysis

The Coalition - under former opposition communications minister Nick Minchin - repeatedly called on the Government to do a cost-benefit analysis for the NBN.

Its absence was a key reason why the NBN faced its "uphill battle", Kennedy said.

"In the rush to implement the project, the government refused to perform any cost-benefit analysis," he said.

"Instead, they commissioned a $20 million implementation study that didn't provide a clear business or economic case.

"The supporters of the NBN now lack ammunition, and the project finds itself exposed."

Kennedy told iTnews he was "a little surprised that the independents haven't been calling for that [analysis] with any real vigour" - although he acknowledged it indicated the level of priority for the project in the independents' electorates.

"I'm not completely convinced the NBN will be the boon to rural areas that other people think it will be," Kennedy said.

"There's no guarantee that it would deliver some greater good for rural Australia."