NBN shovel-ready for jobs as Covid-19 ushers in work-from-home era
The Morrison government has pitched its $4.5bn upgrade of the National Broadband Network as a shovel-ready jobs measure and much-needed technology response to a new work-at-home era ushered in by the COVID-19 pandemic. Given the history of the NBN, critics have wasted no time in claiming the Coalition messed up in not accepting the Rudd government’s initial proposal for a national rollout of fibre-to-the-home from the outset.
While always strongly favouring faster internet, The Australian has been a consistent critic of the poor policy that has dogged the NBN from its conception under Labor and the reformed rollout under the Coalition. Labor’s plan lacked a cost-benefit analysis and involved the creation of the NBN as a government monopoly. The Rudd-era rollout did not deliver the promised results and was reminiscent of the ALP’s other great fiasco, the “pink batts” home insulation scheme. Under the revised NBN plan overseen by Malcolm Turnbull, consumers too often were not getting the service or download speeds they had been promised.
These criticisms stand. Nonetheless, new plans by the Morrison government to offer a true fibre-to-the-premises service to individuals and companies willing to pay for it is welcome. COVID-19 has changed a lot of things, including the business case for NBN Co to expand its service more quickly so taxpayers one day can recoup the heavy investment they have made in the NBN through a sale of government equity in the company.
The pandemic has hastened the evolution of the digital revolution and taken the business case for the NBN with it. In 2010, the average data use by households was 10 gigabytes. Last year, it was 258GB. With COVID restrictions and increased working from home, daytime traffic has risen by 70 per cent with uploads up 110 per cent because of the increased demands of videoconferencing. Communications Minister Paul Fletcher says the COVID-19 response helped bring forward demand that otherwise would have taken years to play out, and at least some of it will be permanent.
Increased use has translated into better financial performance for NBN Co, with revenue up 36 per cent and capacity bolstered through $6.1bn recently raised on private debt markets.
The new plan is that by 2023, 75 per cent of all fixed-line premises will be able to order up to 1 gigabit per second service. Unlike existing arrangements where householders must pay for fibre connection from the node to the premises, NBN Co will lay the fibre if the customer signs up to a high-speed package. NBN Co intends to finance the project with borrowings against future cashflows. Mr Fletcher says it is more efficient for NBN Co to move to the next upgrade phase now than to downsize its workforce and ramp it up later. He says present indications are that by 2023, the fibre-to-the-node rollout would have paid for itself and taxpayers could expect to see a return on their investment.
A rollout of fibre-to-the-home allows the ALP to claim it had things right all along. This may be true, but economics and business don’t always work that way. What is inescapable is that the world has changed in response to the pandemic and will continue to do so. As technology editor David Swan has written, COVID-19 has proved what many knew already: our society is moving towards more remote work, more online collaboration and an economy that is heavily reliant on digital services and internet infrastructure. We can fully capitalise on those opportunities only if we have reliable ultra-fast broadband that allows us to work from home at the same pace and with the same capabilities as if we were in an office.
Record low interest rates make it an excellent time to borrow to invest in forward-thinking infrastructure projects of all kinds. The imperative is jobs, and the NBN plan is designed to deliver 25,000 of them. It is galling that Australia is still placed 62nd in the world broadband speed rankings. New technologies such as 5G will provide much needed competition for the NBN and greater mobility, but at a cost. We are in a different world post COVID-19, one that demands high-quality connectivity and strategies that will secure jobs today and underpin the infrastructure needs of the future.