The Rise and Fall of the National Broadband Network (NBN) - Politics Meets Economics

Mr. Lee Ridge

This paper presents a case study of the ‘rise and fall’ of Australia’s National Broadband Network (NBN) – from one connecting nearly all Australians via a high-speed broadband network – to one today that ranks around 50th in the world. The development of a national broadband network has been on the agenda of Australian governments since the mid 1990’s and the Australian Labor Party gained widespread public support at the 2007 and 2010 federal elections for its policy of building a government owned, advanced high speed fibre based, wholesale national broadband network. This policy would also effectively significantly reduce the dominance of Australia’s largest telecommunications carrier, Telstra (the former government monopoly telecommunications provider) over both wholesale and retail telecommunications. In 2013, the conservative Liberal-National Party (LNP) Government radically changed direction of the NBN to one in favour of using the existing infrastructure, called the ‘Multi Technology Mix” (MTM) strategy. This change in strategy was endorsed by the ‘independent cost benefit analysis’ of the NBN, initiated by the LNP Government.

My purpose in this paper is to describe the flawed analysis of this cost-benefit analysis focussing on some of its theoretical underpinnings, as well as the political, ideological and institutional forces surrounding the cost-benefit analysis process and its findings and to argue that this cost-benefit analysis, and more broadly that cost-benefit analysis, is far from a value free ‘common sense’ approach to assessing long-term infrastructure projects.