Essays on Should the Australian Government Own NBN Co Case Study

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The paper "Should the Australian Government Own NBN Co" is a good example of a business case study.   The National Broadband Network (NBN Co) is an exclusively held Commonwealth Government Business Enterprise (GBE) established in 2009 to design, develop, and manage Australia’ s National Broadband Network. The company was established with connecting all Australian households with high-speed broadband internet with 93% being connected to fiber to the home network (FTTH) and 7% being connected to broadband satellite and wireless networks (Given, 2010). Nonetheless, NBN Co is a fixed wholesaler and is not allowed to retail the broadband network meaning it’ s exclusively a wholesaler in the broadband market.

The Australian Government should own NBN Co because they are undertaking the role of a wholesaler meaning that they do not control the market entirely and based on a national infrastructure model it will offer long-term solutions in the ever-changing technology sector. Being the most costly public infrastructure project in Australian history, NBN should entirely be owned by the government. This is because it has been developed through a model that involves public representatives meaning that it will offer greater value to consumers as a public project.

Moreover, the telecommunications industry has witnessed increased changes in Australian history. The government dominated the telecommunications industry in the 20th century. However, as technology advanced and demand for internet and broadband increased, the government allowed for private investors. Nonetheless, the entry of private sector players has led to increased monopoly and lack of competition in the telecommunications market. Moreover, current private players have not managed to meet the demand for high-speed broadband to all Australians. The current largest national broadband infrastructure was owned by Telstra before NBN acquired the infrastructure.

Even with such an infrastructure, the demand for internet has not yet been met. The main justification as to why the Australian Government should own NBN is based on ability to develop value in the long term. Unlike private companies, the government-owned enterprise GBE uses public money to increase service quality and delivery for its citizens. In return, the main aim of NBN is to enhance the social returns or welfare of Australian in relation to telecommunications for both citizens and government services.

According to Williams (2010), the effect on economic development of investment in telecommunications infrastructure seems to be comparatively strong. To enable the Australian population to enjoy telecommunication services and technology, a telecommunications network is needed. Unlike government-owned business, private businesses have shareholders who expect the company to make profits in their transactions. This means that if NBN is privatized it would remove the wholesale-only policy because it may not be an effective strategy to make profits and meets shareholder objectives. According to Venture Consulting (2011), NBN is operating under objectives from the government that would never be pursued by privately-owned businesses.

Moreover, current private telecommunication players lack the vision and resources to expand and improve Australia broadband network. According to Gans & King (2010, p. 181), Australia is ranked 16th in terms of broadband investment, speed, and penetration by the OECD. BBB continues to argue that this low ranking can be attributed to monopoly by Telstra in broadband service provision with about an 80% market share. Therefore, the government is well placed to own and control NBN Co based on the availability of resources and the overall objective of enhancing broadband access nationwide.

References

Adhikari, S., (2015). NBN Co rolls out ambitious construction roadmap. Retrieved from http://www.businessspectator.com.au/news/2015/10/16/technology/nbn-co-rolls-out-ambitious-construction-roadmap

Eisenach, J., (2014). Australia’s failed experiment in government-owned broadband. Retrieved from https://www.aei.org/publication/australias-failed-experiment-in-government-owned-broadband/print/

Furh, J.P., (2012). The Hidden Problems with Government-Owned Networks. Retrieved from https://www.coalitionfortheneweconomy.org/wp-content/uploads/2012/01/1-6-12-Coalition-for-a-New-Economy-White-Paper.pdf

Gans, J. S., & King, S. P. (2010). ‘Big Bang’ Telecommunications Reform. Australian Economic Review, 43(2), 179-186.

Gerrand, P. (2012). Implications of national broadband for Australia contrasting the current government and opposition broadband policies. AQ - Australian Quarterly, 83(1), 20.

Given, J. (2010). Take your partners: Public private interplay in Australian and New Zealand plans for next generation broadband. Telecommunications Policy, 34(Public-private interplay in next generation communications), 540-549.

Hutchinson, J. & Ramli, D., (2013). What went wrong with the NBN. Retrieved from http://www.afr.com/technology/what-went-wrong-with-the-nbn-20130920-j0dng

Li, G. (2012). The return of public investment in telecommunications: Assessing the early challenges of the national broadband network policy in Australia. Computer Law And Security Review: The International Journal Of Technology And Practice, 28220-230.

Venture Consulting, 2011. The impact of the Australian National Broadband Network on the Communications Sector A forensic view. Retrieved from http://www.ventureconsulting.com/assets/NBN-A-forensic-view2.pdf

Williams, R. (2010). Telecommunications and Economic Activity. Australian Economic Review, 43(2), 176-178.

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