Australia - National Broadband Network - Cost Benefit Issues

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Last updated: 27 Aug 2014 Update History

Report Status: Archived

Report Pages: 15

Analyst: Paul Budde


While the matter has since died down, one of the key issues that has been haunting the NBN is the lack of a cost benefit analysis. It is one of the key issues that the opposition has been raising. There is, on the other hand, widespread acknowledgment of the difficulties attached to providing any meaningful analysis on this topic, due to the large-scale character of this national infrastructure plan and the long periods of time it encompasses.

However there are some very relevant questions on the table. The government is clearly positioning the NBN as national infrastructure, linked to the digital economy, and it has identified the social and economic benefits related to sectors such as healthcare, education, energy and the environment. It has initiated policies aimed at using the NBN to achieve better outcomes for these sectors – via cost savings and a better, more efficient and productive service delivery of these services.

However, in the legislation and the NBN Co business plan the NBN is largely positioned as a telecoms network, with no clear reference being made to those social and economic benefits. Its revenue structure is based purely on telecoms income and does not take into account any social and economic benefits. This leads to ambiguity – for example, in relation to whether NBN Co should design the NBN as a telecoms network, or whether it should already, in its design and construction, ensure that the specific requirements of these other sectors are taken into account.

These issues are not going to go away and the government should therefore address them as a matter of urgency. If this is not done the NBN could be faced with serious delays if the opposition were to win the next election, since it has indicated that it would first want to investigate these cost benefits before continuing with any broadband plan it might develop.

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