Wednesday, April 08, 2009

Broadband Infrastruture: Govt does the right thing!

A lot of people seem to be responding with surprise the Federal Government's announcement that it will itself build a nationwide Fibre to the Premises (FTTP) broadband network.

It's telling for me that one of the most basic functions of government - to build and maintain physical infrastructure that is in the nature of a natural monopoly - is so neglected that the right decision comes as a surprise. Neo-classical economics (which declares the cargo cult of the market will provide) and neo-liberalism (which loudly says privatize and let the chaos of the market rule) have conspired with both major parties to nearly eliminate Government's basic role.

T-Cwp infrastructure (transport, communications, water, power) can and should be funded by land revenue as well. See how much 'property values' are worth when every bridge has been bombed, every road potholed, every telecommunications exchange, power generation and water sanitation plant destroyed as we did in Iraq.

That's one thing that could be said for neoliberal/neoconservative ideology: they dont know how to fund and build infrastructure but they sure know how to wreck it.

One can compare this decision to the brain dead decision of earlier years to allow 'competing' telecommunications companies to run two cables down some streets but none down others. Almost incredible that such stupidity would be allowed to actually materialize, but it did.

The government's decision raises some rather obvious issues: it was a mistake to privatize Telstra (the monopoloy carrier) in the first place; so why do they insist of also privatizing the new network once it is built? Time to re-embrace public ownership. Infrastructure is not for 'profit', its for public benefit. The charges should the least that can be done to build and maintain the network to the desired standard. And instead of selling 'Aussie Infrastructure Bonds' to finance it (not a bad idea in itself), why not raise revenue from land rates? (see above re property values). Here's the slogan: T-CWP by LR.

There's a deal of interesting commentary on this decision, mostly positive:

Crikey: Packer would have stopped it

End of the Copper Monopoly

Australia to lead the world at something good

Shiny New Network

Government got it right

The people on whirlpool have got some interesting comments

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