Peter Gallagher

This is a major move that effec­tively (re)nationalizes essen­tial infra­struc­ture. Is that good or only inevitable given the his­tory of mis­takes in the reg­u­la­tion of pri­vate tele­com infrastructure?

One imme­di­ate con­cern with this new direc­tion is that his­tory shows com­pa­nies with a major­ity government-ownership in Aus­tralia and else­where become fero­cious rent-seekers (think Qan­tas and the pro­tec­tion of air routes). But there’s also another—perhaps less seri­ous—way to look at today’s announcement.

Sup­pose you’ve been mocked by civil lib­er­ties groups and indus­try groups (includ­ing ISPs) for propos­ing an inef­fec­tive fil­ter for con­tent that is alleged to be ‘ille­gal’ or pos­si­bly only ‘unde­sir­able’. Sup­pose that you’ve real­ized the pun­ters will hate because it threat­ens to squeeze their band­width. But you’re deter­mined to do it and you’ve got at least $4.7bn of tax­pay­ers’ funds in your kick to play with. Well…

One way to trump your crit­ics and to fil­ter what­ever you desire is to become the prin­ci­pal sup­plier of Inter­net access:

“The Rudd Government’s National Broad­band Net­work will be built and oper­ated by a new com­pany specif­i­cally estab­lished by the Aus­tralian Gov­ern­ment to carry out this project.

The Gov­ern­ment will be the major­ity share­holder of this com­pany, but sig­nif­i­cant pri­vate sec­tor invest­ment in the com­pany is anticipated.

The Gov­ern­ment will make an ini­tial invest­ment in this com­pany but intends to sell down its inter­est in the com­pany within 5 years after the net­work is built and fully oper­a­tional, con­sis­tent with mar­ket con­di­tions, and national and iden­tity secu­rity  con­sid­er­a­tions.” Extract from Sen. Conroy’s Press Release (empha­sis added)