The NBN - the next Rudd Government fiasco?

Here at Henry Thornton.com we try to stay ahead of the news. With no hint of false modesty, we aim to emulate the Great Gretzky.

"By obeying his father's advice - 'skate to where the puck is going, not to where it has been' - he was a star at a young age. At 6, he was skating with ten-year-olds. When he reached double figures in age, he was scoring in three figures, notching an incredible 378 goals in an 82-game season. That was a year or so after that headline hit the newsstands. An entire nation of Canadians turned its lonely eyes to this prodigy.

"He was The Great Gretzky as a kid. He was The Great Gretzky as a teenager. He was The Great Gretzky in the NHL. And, most incredibly, he always lived up to that name."

The great new tax'n'subsidy plan for the mining industry has just about reached where the puck has been. The possibility of Kevin Rudd being a one-term Prime minister is where the puck is now, but even blind Freddy can tell (from the cheering of the fans) that the puck is moving very fast.

Recently, Henry and Mrs Thornton attended a fund-raising function addressed by smokin' Joe Hockey, whose name no doubt conjured up the distant memory of the Great Gretzky.

We shared with an old friend our surprise that Tony Abbott had so quickly moved to where the puck was heading on the ETS, and the dramatic influence this had had on Australia's political debate.

We shared our astonishment at the sheer incompetence of the Rudd Government in the management of the stimulus packages involving dangerous insulation practices in the ceilings of the homes of Australian voters and the gross overpaying for new school buildings.

These are, of course, also subjects where the puck has been.

"There's more to come before the election," our old friend said in a conspiratorial whisper. "The NBN is about to blow up big-time!"

As it happened, we have had our eye on where that particular puck will go for some time.

Back in May, the splendid Barry Nosworthy responded to a call for comment on the NBN (National Broadband Network):

"Before the election Labor promised us a 100Mbps broadband nirvana, delivered through a Public Private Partnership. No one would miss out, so this network would truly have a nation-wide footprint. After the election the government set up NBN Co, and told it to get on with the ill-defined but highly aspirational job.

"Telstra would be cajoled into co-operation, with the gentle persuasion of draconian legislation if needed. In parallel the Minister, independently of its NBN Co, commissioned this study to advise on implementation issues and tangible regulatory actions. Note carefully, this report is about the implementation of a policy that is taken as a given, despite the fact that the report provides no coherent summary of just what the grand policy design actually is.

"The introduction to this report summarises the 'stated policy objectives' in just one paragraph. (Probably not the fault of the consultants, Henry, because we were told the original press-release length policy was devised at 30,000 feet of quality flight time between the PM and the Minister). So it is probably inevitable that the implementation realities start to take the gloss off some of the promises.

"The promise of 'superfast' broadband at affordable prices. The original keyword was 100Mbps. This implementation model now suggests an 'entry level' offering of 20Mbps, and a peak data rate ceiling of 12Mbps if you live in the bush. This is beginning to sound like the next generation definition of a basic 'standard service' which someone has a 'universal service obligation' to deliver. The logic of the report would imply that this non-commercial obligation should shift to NBN Co.

"There is also a commitment to uniform pricing, implying built-in cross-subsidies. There is also an implied subsidy for someone to launch next generation Ka Band satellites (the ‘commerciality’ of which is extremely suspect). To offset these impediments to 'commerciality', cherry-picking by competitors will be penalised and the prospect of a Universal Service Levy is mooted. Pricing for services above the ‘entry level’ remains vague, but there is support for price differentiation between different classes of user.

"The bottom line is that to eventually become a ‘commercial’ and economically viable proposition we might have to put aside any predilection for competition policy and market economics and settle in for a longish period of good old fashioned central planning. The Report, amazingly, canvases some quite extreme implementation options to make the NBN 'commercial'.

"What happens if we have a broadband party, and no one turns up? Well, there is always the fall back of government procurement, and the eGovernment delivery of education, health, and community services. Plus we can force customers to come to the party. How? It's simple. Offer incentives for service providers to migrate customers across to the new network. Regulate to ensure we get this commercial result through immunities to avoid planning controls. (There is a delicious irony, Henry, in suggesting overhead wires would fit within a schedule of ‘low impact’ facilities). Unlike some others, however, I am more sanguine about the requirement that new estates provision ducting and piping (as is the case with other utilities)."

Read Brother Nosworthy's full report here. It will take you to the place where the puck will shortly be.

Legendary baseball player, Yogi Berra, is famous for the wit and wisdom of his one-liners.

Here is one for Kevin Rudd:

"You've got to be very careful if you don't know where you're going, because you might not get there."