Why is the NBN so important?

There has been a lot of argy-bargy the benefits and the purpose of the National Broadband Network. But many forget, or are unaware of why we needed to build NBN Co (the company) and the new network in the first place.

Up until 1996, Telstra was a Goverment Business Enterprise (or GBE) owned wholly by the Australian people — exactly what NBN Co currently is. This government enterprise ran, amongst many other things, the copper network which connects the majority of premises in Australia. The troubles began in the 1996 election, when then-opposition leader John Howard announced the Coalition policy to sell one-third of Telstra. After being elected by the Australia public, 33.3% of Telstra was sold to the public sector with an additional 16.6% in 1999.

Approaching the 2007 federal election, the Coalition government sells another 31% of Telstra in late 2006 — ending the public majority ownership in the corporation. At this stage, the Howard Government had successfully sold off 81% of Telstra to the private sector. The company that runs the most crucial fixed-line communication network in Australia becomes completely privatised.

Why was privatisation a bad idea?

Looking at the state of the copper network today, it's pretty easy to see the damage caused by the privatisation. Telstra began laying off their own staff — opting for contractors paid per job, rather than per hour leading to corner cutting exercises. The company had become so focused on returning the greatest profit for its shareholders (which is what private companies do) that the infrastructure that the entire Australian population relies on begins to rot slowly but surely.

Then there's the monopoly. The majority of Telstra's fixed-line copper network was built while the company was in the hands of the public — all using tax-payer dollars. This gave a private Telstra a definite monopoly, charging atrocious prices with consumers having no other choice but to continue using and paying for the services.

NBN Co is rebuilding Telstra from scratch

Essentially, the National Broadband Network is rebuilding the Telstra copper-network from scratch — but keeping it in the hands of the Australian public. For too long, Australia has been crippled and limited by the Telstra monopoly of fixed-line communications. (At least mobile networks have three main competitors; Telstra, Optus and Vodafone.)

Telstra only has to provide a working PSTN service to households (that is, a phone line). Many city dwellers as well as us in the country have been controlled by Telstra, connected to a pair-gain system which wasn't compatible with any DSL broadband service. City dwellers became stuck on a congested 3G network, while others in the country are trapped in satellite hell while others across the road was surfing at 24Mbps ADSL2+.

ADSL pricing ranged greatly between exchanges, with "on-net" providers such as TPG or Dodo able to undercut Telstra by significant margins to provide cheap and affordable internet to a minority — primarily city dwellers (which weren't bound by pair-gain systems). The rest were left for Telstra to service with the ability to resell Telstra Wholesale. For other competitors to stay even slightly competitive "off-net", margins are often stripped to the bone.


While the speed (bandwidth) and reliability of the NBN is definitely important and very enticing — it's the publicly-owned monopoly that Australian consumers want and need. Australians should not have to suffer under the mismanagement and underinvestment of Telstra in maintaining their crucial copper network.

Realistically, we need a new network far from the hands of the private sector. A network which will remain the the hands of the Australian people knowing that their network will properly function. A network which is no longer bound by Telstra's inflated and atrocious pricing for the price of a half-rotten network.


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