Study: Australian Government Network Buildout Falls Short

Tech policy paper says prices still high, quality still low
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Government broadband buildout efforts in the U.S.—muni broadband buildouts in particular—have gotten pushback from commercial ISPs, who argue that market forces, not government interventions, are a better way to spur price and service competition.

That argument got some support in a case study of a government broadband buildout elsewhere.

Australia’s National Broadband Network (NBN), a government-backed effort to replace copper with a wholesale fiber network to boost competition for retail fixed broadband and speed buildouts with higher quality and lower prices failed to achieve those goals and could be sold off to private interests.

That is according to a paper from the Technology Policy Institute, which chronicles what it says was the product of "extensive government involvement" in infrastructure buildouts, which includes "low quality services due to low speeds, higher prices relative to other countries and a slowing rate of price decrease for internet services in the past eight years."

The paper's authors concede the evidence is "nuanced" and drawing conclusions is difficult. But clearly not impossible, since they conclude from their analysis that "the NBN has not only failed to achieve its targets but stagnated fixed broadband adoption."

"Government's role and its continuous attempt to 'catch up' in a sector characterized by its dynamism should be re-evaluated," the paper's authors conclude. "The Australian case reveals how state owned broadband might not be the best answer to meet full coverage and competition objectives."

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