The NBN has overspent ( and appears likely to continue to overspend for the foreseeable future ) its budget. The cost of providing a decent internet connection is going to cost in the region of $7,000 per home. ( And that’s ignoring the fact that they have compromised down to a far inferior FTTN scheme instead of the fibre to the home solution we will have to get to at some point. )
To fill the budget gap, the government proposed and has now had signed off a charge per month for ISPs, ( Internet Service Providers – the companies which give you your fixed broadband connection. ) The ACCC recently confirmed that the government would be charging each ISP offering superfast broadband $7.10 per month for fixed broadband connections. They have also confirmed that this charge could be passed on to users by the ISPs making it a de-facto broadband tax.
As if that wasn’t bad enough
During discussions on the subject, Bill Morrow, the CEO of the NBN was on the news, suggesting that mobile phone companies should be charged the same amount as fixed line providers to more quickly fill the hole in the NBN coffers.
Just to get this on the table. I think this is a patently ridiculous situation. Mobile Carriers & Service Providers have invested billions of their capital (not taxpayers money) over the years, to create an asset that delivers the consumer experience demanded (speed, reliability), and provides a commercial return to the shareholders. Why should they pay for the inefficiencies of the government?
What is this proposed scheme like?
I was asked by a friend to help explain what Bill’s proposed solution was ‘like’ ( a metaphor ) so that, when he (my friend, not Bill Morrow) was interviewed about it he could express it in a way people who don’t work in the industry would understand.
It’s the Australian equivalent of asking Mexico to pay for the wall
- It’s like McDonald’s asking for a tax on celery.
- It’s like Nokia begging Samsung to pay for their Christmas party.
- It’s like watching Enron’s accountant checking vending machines for left coins.
- It’s the Australian equivalent of asking Mexico to pay for the wall.
- It’s like Malcolm Turnbull asking Bill Shorten to pay for his kid’s private schooling.
- It’s like Eddy Obeid asking Mother Teresa for a lift to the Opera.
- It’s like Blockbuster asking Netflix to come around and rewind all their tapes for them.
This is probably too complex but possibly the closest analogy :
- It’s like the big bad wolf asking the 3 little pigs to pay for his inhalator.
Things to consider when deciding what’s sensible here
If you want to talk about who should pay for the NBN, we should bear in mind the following.
- The UN considered broadband a fundamental human right :
Whether it’s delivered as fixed or mobile broadband.
- A ‘tax’ of this sort is regressive :
This is a flat fee ‘tax’ applied to a ubiquitous ‘utility’. Regressive taxes disproportionally affect more impoverished people.
- The money that will be taken from consumers has already been taxed :
By the time we pay for our home broadband, the money we use has been income taxed, and the price includes GST. What’s this – a THIRD tax?
- Australian business stand to benefit the most from the NBN :
Some estimates say that businesses will see a 2% improvement in GDP.
- But businesses are getting a tax cut this year :
Remember, companies are getting a tax cut this year, courtesy of the government.
Only a government run company could suggest this sort of solution.
Why does big business get a tax cut, plus the benefit of the NBN while Joe Public has to pay more for a fundamental human right through a regressive tax to fund the gap created by the NBN’s mismanagement?
What does Bill Morrow hate more – human rights or the people on low incomes who are dis-proportionally disadvantaged by regressive taxes?
Summing up :
With Trump around, it seems hard for even worthy Australian news to get the coverage it deserves. This news story overlapped with a week of scandals including Comie’s firing. It didn’t get enough coverage.
There is genuine concern underlying this rant. It is extremely possible that mobile networks will outperform the NBN on every benchmark: 5G could be faster, more reliable, portable and potentially, cheaper. With or without the budget holes and tax, the NBN could end up being not much more than a redundant / back up network – superfluous to need when we already have 5G data.
Finally, I used to work for Bill Morrow ( I was a long way below him on the tree of course. ) I must say, having presented to him personally, Bill is a nice guy and a good leader. I disagree with his comments here, but that’s not to suggest anything negative about him personally.