Quote:
Originally Posted by Larryp
I the NBN was ever a good idea and a valid business proposition, The telcos would have built it themselves.
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A little history lesson will demonstrate why this wasn't going to happen, and why a government-built NBN was the only way.
The particular problem we had in Australia is that because of a series of very poor policy choices in the 1990s and 2000s, Telstra had a monopoly over fixed line telecom services, and used its monopoly powers exactly in accordance with classic economic theory - for the financial interests of their shareholders, not for the public good. Why would they spend money investing in new infrastructure when you already have 100% market share? Such expansion of services as did happen was done purely as "cherry-picking" of areas that had high returns (business centres, high-density upper-quartile income suburbs, major corporates, etc), but there was never any intent to provide ubiquitous high-speed broadband to the whole country.
They also used their monopoly position to stamp out competition. Remember the "cable wars" of the 1900s?
The Telstra (later Foxtel) cable was originally planned to pass 1.1 million homes by 1996. The intention was purely to supply Pay TV into wealthy areas with disposable income; it had nothing to do with "expanding Australia telecoms infrastructure". (It wasn't even designed to carry telephone services - a legacy we are still feeling today, as it is being re-purposed for the MTM.)
In 1994, Optus announced it would build its own HFC network to pass 2.77 million homes, but by and large covering areas not in the Foxtel "footprint", so there would have been something like 4 million homes with access to one or the other cable, but in most cases, not both.
Telstra countered by expanding their network to cover 4 million homes, by over-building the Optus footprint (which is why so many capital city streets have two cables, while other areas have none).
Optus couldn't match Telstra's spend and market dominance, and cut back their planned roll-out in 1997, when it became obvious they couldn't win the war with Telstra; Telstra subsequently cut back their own roll-out -
it was pretty apparent that their roll-out scale-up was purely about market dominance, nothing to do with the "common good", or giving customers a choice. With the competition wiped out, there was no longer any commercial need to expand, even though most Australian residences still don't have access to cable.
Optus basically wrote off its investment in cable in 2002, and never really recovered, so their maintenance spending was inadequate - which was demonstrated when the NBN paid $800 million to acquire the Optus HFC network, and then declared it unfit for service as part of the MTM.
https://www.accc.gov.au/system/files...20May%2008.pdf
That's what happens when you leave it to free-market monopolies to look after Australia's telecom infrastructure needs.