Australia's NBN: Who's really going to pay for it?

As Telstra CEO says Telstra must bear some responsibility for the state of the NBN we look at the history, current state and future of Australia's NBN.

With Australia's controversial National Broadband Network now nearing completion, arguments continue between NBN management, the government and the telecoms industry over pricing and the best way forward for Australia's internet.

Unusually, alongside criticism of the NBN, there has now been an admission that industry bears some responsibility for its huge cost, so far carried by the taxpayer. Telstra chairman John Mullen says that his company must shoulder some blame due to its own "recalcitrance" in attempting to thwart the then Labor government's NBN plans a decade ago.

Mullen made his remarks at the company's annual general meeting in Melbourne last month.

"It is always easier to comment with the benefit of hindsight," said Mullen, "but it is my view that over the last 10 years, private sector competition between strong players such as Telstra, Optus, TPG and others was always going to build 100 Megabit broadband access and speed to the majority of the population of Australia in an ongoing competitive landscape and at no cost whatsoever to the taxpayer."

Mullen freely admitted that the efforts of private industry would have left significant numbers of people in remote rural communities unserved. However the government could then have funded the connection of these communities at much less cost than building the NBN across the entire nation. This is the way events worked out in the UK and other places.

"Instead, however, in the NBN we have created a state-owned monopoly that is going to cost the country more than $50bn," Mullen told Telstra shareholders.

When the original NBN scheme was outlined by Labor in 2007, the plan was for a fibre-to-the-node network accompanied by structural separation of Telstra's wholesale and retail businesses. Telstra's then CEO, Sol Trujillo, was strongly opposed to this. When the Labor administration put out the original NBN tender Telstra submitted a bid that did not meet the government requirements. This led ultimately to today's government-delivered monopoly NBN, and thus - according to Mullen - Telstra "must bear part of the blame" for the huge costs to taxpayers that have followed.

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