NBN to go ahead after Labor victory

Labor's victory means the $43 billion National Broadband Network (NBN) will push ahead

The broadband policy which the Coalition has repeatedly described as a "white elephant" gained its freedom today with the long-awaited news that Labor will form government with the support of the Greens and three independent MPs.

Labor's victory means the $43 billion National Broadband Network (NBN) will push ahead and the Coalition's own national broadband policy -- the $6 billion dollar project that was announced in early August -- has been poached, skinned and mounted.

Two of the remaining independent MPs who confirmed their vote for Labor this afternoon -- Rob Oakeshott and Tony Windsor -- said at a press conference today that broadband was a key issue in their final decisions.

Windsor said that broadband was a key issue in his decision on who to back in the Australian election. "The most critical issue was broadband," Windsor said right off the bat. "Can't miss the opportunity for millions of Australians." Oakshott had announced his decision after Windsor's and also referred to Labor's broadband plan as a factor.

Windsor said the independents had also won significant concessions from Labor with respect to the NBN. "In relation to the NBN there will also be equity in terms of wholesale pricing across country areas," he said. "And it will be a roll-in, not roll-out -- it's now a broadband roll-in," added Oakeshott, referring to a broadband build strategy where rural areas would receive NBN fibre services first -- not metropolitan areas.

In relation to whether the independents would force Labor to a different rollout schedule for the NBN, Oakeshott said it wasn't the independent's choice -- their support for Labor was really just based on the fact that they would not support no confidence motions or block supply -- all other legislation was up for debate.

However, he said, if Labor dragged its heels on the NBN, the independents would raise their voices on the matter.

In contrast, federal independent MP Bob Katter today claimed that there was little difference between the broadband policies of the two major parties at a press conference this afternoon, where he announced his support for the Coalition. “There were issues like broadband, where I think they weren’t all that far apart,” Katter said. However, the MP said he believed the ALP had a better “broadband deal”.

Labor's victory likely also means the death of its controversial internet filtering project -- with both the Greens and the Coalition against it and having pledged to block the initiative in the Senate.

What's next? Research director at analyst house Ovum, David Kennedy said that by the time the next election rolled around, the NBN should be in full speed.

"We would expect substantial fibre roll-outs to occur around the country over the next 3 years," he said. "They have 8 years to roll out connections to about 10 million households. Now obviously there will be a ramp-up phase, but by the end of that parliament would we would expect them to be going at full speed."

Kennedy said Labor's policy was much better for the industry and that the Australian civil works companies that would be tendered to actually roll the network out would also benefit from the go-ahead of the NBN.

"Under Labor's policy, where we're clearly heading is a structurally separated industry," Kennedy added. "While both of them agree on the need to tighten competition rules on Telstra, they don't agree about whether -- Telstra in particular and the industry in general -- should be structurally separated. Labor would take us strongly in that direction."

"I think it would be business as usual it seems," Kennedy finished. "They would simply proceed with the plan that's been unfolding over the last year or so."

The Coalition has repeatedly slammed Labor's policy as the "white elephant" during the election campaign. But the claim was rejected by the other side of the political fence -- including NBN Co chief executive Mike Quigley, who will now maintain his position alongside the other NBN Co staff.

"Far from being a ‘white elephant’, the NBN can provide an acceptable return for the government,” Quigley said in a speech several weeks ago, where he openly slammed the Coalition's broadband policy. “Taxpayers will get their $27 billion investment back with interest and they will get a network they can use for decades. This is, I believe, a much better option for the Australian public than giving billions of dollars of taxpayer funding to subsidise commercial companies to marginally improve today’s broadband networks.”

Prime Minister Julia Gillard stated at the official launch of the NBN in Tasmania recently that 27,000 future jobs will be created during the roll-out the NBN. With the Gillard government domination over the Coalition, those jobs -- along with the 700 people currently working on the NBN rollout -- now have the chance to flourish.

Other technology policies Other Labor technology policies such as its $466.7 million e-health health identifier project and its telemedicine tie-in to the NBN will also now go ahead. However, Ovum analysts Jens Butler and Kevin Noonan noted in a research note recently that things would be tight in other areas.

"There is no doubt that funding will be tight for government agencies over the next three years. The Labor Party has signaled it will be removing funds for a number of strategic improvement initiatives", they wrote, listing them as:

  • Government IT managers will see the loss of the Gershon Reinvestment Fund for delivering underlying improvements to the whole of government IT.
  • Both the Public Service Commission and the Department of Prime Minister and Cabinet will lose funding for strategic government projects.
  • Labor will continue with the public service Efficiency Dividend pegged at the higher rate of 1.25%. Currently it is due to fall back to 1% in 2011.

The e-health and NBN projects offered hope. "However, without greater clarity, we are unable to see anything more than the IT industry (within the government sector anyway) being an election loser," the pair wrote.

"In any future government, both parties will not have the luxury of surviving any significant problems with policy delivery. This can present quite a burden for IT managers, as IT system delivery is frequently at the pointy end of new policy initiatives. The key message for the next three years will be to step carefully, and to diligently stay on top of all risk management."

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