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)