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Australia's broadband network is a cautionary tale for UK broadband policy

The UK Labour Party has led calls for a nationalised broadband network, but the lessons of Australia's attempts to introduce a similar policy provide cause for caution

Telecoms businesses in the private sector, many of whom are sponsors of the Broadband Stakeholder Group, are investing at scale to make digital connectivity a reality for communities and businesses across the UK, and to unleash the opportunities that the fastest fibre broadband and 5G will provide for all.

Any proposal – such as that included in the Labour Party’s election manifesto – to create a national broadband monopoly in the UK would be based on a radical misdiagnosis of the current UK market.

Australia’s National Broadband Network (NBN) has been suggested as a model for the UK, but this was created to address a very different problem, and has turned out to be a very poor solution.

At the time of NBN’s creation in 2009, Australian broadband development was largely stalled, with Telstra providing limited prospects of widespread movement beyond basic ADSL.

This is starkly different from the UK in 2019, which has near-ubiquitous superfast services delivering at least 30Mbps, a majority with access to 300Mbps or more, and swathes of investment announced for fibre-to-the-premise (FTTP) deployments totalling over 30 million premises.

Creation and evolution of the NBN

Australia’s then Labour government initially tendered to develop a National Broadband Network in partnership with industry. It then announced in April 2009 a new government-owned, wholesale access only network – similar to Openreach in the UK.

Its goal was to reach 93% of households with FTTP within eight years, with the remainder served by satellite or wireless broadband. Once “up and running for a period of five years”, it was thought the NBN could be sold in part to the private sector.

NBN’s first two years of establishment were protracted, and involved consultation, planning and contracting. By 2013, NBN was far behind schedule, having passed less than 20% of its target 1.27 million premises for that year.

The incoming coalition government took stock and revised the NBN strategy to a multi-technology approach, using fibre to the cabinet (FTTC), cable, FTTP and other technologies according to local circumstances. This was expected to be cheaper, quicker to deploy and sufficient for user requirements, though delays and cost overruns continued and the network is still not entirely complete.

Expected peak funding is £27bn, which while less than the revised 2013 forecast for the FTTP network, is well above the initial 2009 optimistic figure of £23bn. Disappointingly, of the 1.8 million premises passed with FTTP, just 64 in total have taken a gigabit service.

Politicisation and paralysis

What is clear is that NBN paralysed commercial investment in broadband from its announcement, and its setup meant there was a two-year gap before deployment of public broadband began. In the same period, BT passed 20% of UK households with FTTC.

It is equally clear that government ownership politicised broadband to the detriment of consumers and the economy at large. As parties battled over broadband, voters were similarly mobilised.

In the 2013 federal election, it was the sixth main issue overall – well ahead of taxes and defence – and the second main issue for men. Fierce political debate centred on whether NBN should be based on FTTP (higher capacity) or FTTN and cable (cheaper, quicker to deploy).

NBN management became politicised, with the CEO replaced after the change of government, and executives threatened with subpoenas for refusing to attend parliamentary hearings. There were also accusations that favoured constituencies were being prioritised for deployment.

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NBN has indeed proved to be “a caustic brew” as Australian’s national broadcaster ABC pithily observed. Were the UK to emulate any variation of the Australian strategy, it would be toxic for the entire UK telecoms industry, choking investment and growth of the digital economy for decades to come.

We would urge the next government, whomever that may be, to consider the drawbacks of creating a state-owned monopoly broadband. The challenge and need for widespread, accessible superfast broadband is a shared one, and we look forward to working closely with the next government to develop workable strategies to achieve these ambitions.

Clare MacNamara is CEO of the Broadband Stakeholder Group

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