NBN still no case study for nationalised broadband

Australia’s experience with the national broadband network should be reason enough for US policymakers to rebuff attempts by “broadband populists” to similarly nationalise broadband infrastructure, according to a US policy think tank.

In a lengthy policy report, the Information Technology and Innovation Foundation (ITIF) railed against the “loose coalition” of “broadband populists" seeking to “change the structure of America’s broadband industry”.

“Many broadband populists present their case in instrumental terms: broadband as a utility, either privately or publically owned, would be superior to the current market-based system because it would deliver lower prices and better services,” the report, co-authored by ITIF president Robert Atkinson, said.

“But at its heart, their argument doesn’t depend on the relative performance of either system; it’s grounded in an ideological conviction about who should own and control this key communications infrastructure.

“For them, lightly regulated, for-profit corporations have no place in America’s broadband infrastructure, even if it could be demonstrated (which it can) that they deliver superior broadband performance.”

The ITIF alleged that proponents of nationalised broadband “distort data to purportedly show that the United States is falling behind other nations in broadband, that there is not enough competition, that prices and profits are too high, that providers have nefarious motivations (to block legal websites at their whim); that broadband is a fundamental human right that only government can serve, etc".

It argued that these claims were "propaganda designed to discredit the current model so that the preferred model of government or even community-run networks becomes the dominant one".

On the issue of pricing, the ITIF said US broadband prices – particularly at the entry-level – were still far lower than those of Australia.

“Australia is actually pursuing the model espoused by many broadband populists—full structural separation, with government ownership of the underlying infrastructure and retail competition on top,” the ITIF said.

“Australia’s open-access wholesale national broadband network is by all accounts far behind its deployment schedule, with higher costs and lower uptake forcing a significant scaling-back of initial plans.

“The low uptake of NBN services makes it difficult to draw conclusions, but, on average, Australia continues to have relatively high prices and low speeds compared with other countries.”

The ITIF suggested that the local NBN experience debunked any attempt to paint US broadband prices as being “excessive” due to limited competition among private sector internet providers.

In two countries with similar population spread and densities, the ITIF argued “evidence suggests that open-access, government-funded fibre networks like those proposed by populists are no cure for the tough economics of suburban sprawl".

The ITIF report is the second such paper in six months from a US policy think tank to question the success of the NBN project.

Last July, the Technology Policy Institute (TPI) issued its own scathing assessment of the NBN, claiming the project’s “overall outcome has not been positive”. The ITIF references the paper in its report.

“The NBN is an example of an intrusive policy subject to political pressures that has resulted in inefficiencies that distort consumer patterns and investment decisions without changing the competitive landscape,” TPI said.

“This case study illustrates how large scale public infrastructure projects in the telecommunications sector take decades to roll out, are subject to political pressures and result in little or no value to consumers.”

However, not everyone is buying into the criticism of the project.

Internet Australia CEO Laurie Patton told iTnews he didn't want to see the ITIF's position on nationalised infrastructure permeate in Australian broadband policy.

“The fact is [the US and Australia] have two completely different market structures and two different regulatory regimes," Patton said in a statement.

"What works here isn’t necessarily what would work in the US and vice versa”.

Updated, 1.51pm: Added comments from Internet Australia.