Should the NBN be Sold? And if the NBN is sold what Next for the consumer?

I think we all have to remember that anything the Telstra chief might say, is going to be from the perspective of one looking to make the company more profitable. NBNCo reducing costs will benefit any future purchaser. Telstra, for example. 5G is an unknown at this stage.

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As I also noted that Telstra are the most likely to buy the NBN Co and have certainly made moves to allow that to happen. Reducing the cost and hopefully increasing performance are still things worth pursuing for nbn™ users, just we need to keep in mind not all changes may be done because they are for our benefit. With my cynical view about it all we are just a product that produces the revenue and never are the beneficiary.

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Thats exactly my thinking. TElstra (if it ends up purchasing) will not keep costs to the consumer or resellers lower, they are more likely to raise them: I base that comment on Telstra’s past behaviour. Never mind that “the taxpayer” has already footed the bill to the tune of $51Bn. I dunno, its such a mess. But, I think there ought to be a low cost 12/1 level available to everyone, not just as a way to keep the “landline” which isnt.

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I am not sure if it will be Telstra. To raise say $50B+ to buy in effect a technology company would be an enormous risk to not only Telstra, but their financial backers. There are many reports that it may not ever make a decent financial return which would not be good for a public company (it would be a massive albatross around their neck).

The only way for Telstra to buy, is if there were massive write downs and it was bought for next to nothing. I am not sure that the ALP/LNP would be keen to almost give the NBN away…as there could be budgetary and political consequences.

My view it is more likely to either be bought by an international telecoms consortium (partnership with several international companies to spread risk)…but this may never be approved by the Commonwealth on the basis of national security.

Alternatively, some of the (industry?) super funds may wish to enter a consortium to purchase the network and add it to the non-listed infrastructure assets they have to protect themselves against market volatility in other investment sectors. In such case, a high return is not the primary aim.

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Owning a monopoly on communications infrastructure wouldn’t make a decent financial return?

I do agree with writing it down, but not for sale purposes. It is currently a taxpayer funded albatross, and should use the write-down to fix some of the mess (i.e. reinvest).

Wait a couple of years and let’s see. A fair proportion of Telstra went for a song.

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Many appear to share the same view on the write down, but few propose the second. Although it would appear their opinions might lead to not selling as one logical end point.

The ABC has released effectively what is an opinion piece that summarises the history of the NBN in a simple non tech way.

It pivots off an S&P Credit assessment of the financial future for the NBN.

Notably the S&P report is now a year old (released 25 July 2018). All the mainstream media commented on the report at that time. The impact of and need for a write down prior to sale of the NBN assets and business was fundamental to the report. Additionally S&P has some definite views on the competitive position of the NBN as a going concern.

The ABC review from July last year.

S&P
In our opinion, there appears to be ample justification for additional financial support on the grounds that the NBN generates social and economic benefits that cannot be captured by a commercial return on investment.

And, assuming there is a sale,
So, potentially over the longer term, if there is market consolidation and NBN Co isn’t viable, we might see less competition and higher prices.

Not a lot has changed in twelve months?

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I’d say the NBN is a monument to the pitfalls of privatisation - particularly privatisation of natural monopolies. The rot set in when John Howard privatised the telecommunications infrastructure, along with Telstra. The $20 billion write-down is only the beginning. We’ll be lucky to get away with ten times that. A permanent fix involves re-nationalising the infrastructure. What that will cost, I have no idea.

So Telstra’s InfraCo could be merged with NBN Co, under public ownership. That still leaves mobile infrastructure in the private sector, but it’s a start.

“built and fully operational” Built would imply finished. Is national infrastructure like this ever really finished? I’ll leave pondering fully operational to the reader. :roll_eyes:

All those issues and the rest - and not only for the short term.

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Don’t understand why people are questioning if it will be sold
Extract from a press release by Wayne Swan in April 2009( 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.) it was always Labors intention to sell it off

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Not if; should. The obvious answer is NO!

You might regard Labor as infallible, but to me they’re just another bunch of politicians.

Plans can change. In this case, they should. Privatising the infrastructure along with Telstra has proved to be a monumental blunder. That’s not a mistake that we should repeat with the NBN. Quite the opposite, in fact.

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Because, it is a political convenience?

The plan to sell the NBN off came about primarily to avoid the cost going on the Federal Budget and adding to the deficit? Up to $51B?

Reasons for not privatising the NBN are discussed previously in this topic. Overall most comments against suggest selling the NBN may longer term be to the detriment of consumers (higher internet costs), and a loss of benefit to the nation (services incapable of meeting future or even current needs).

However for consumers there is also the need to be realistic about the possibility the sale is a done deal.

No one knows for sure how it is going to progress. The Government does not need public support to proceed to a sale, and perhaps not even a vote in parliament.

The conditions accompanying the sale are relevant as they will have a significant impact on all consumers who rely on the NBN, today and into the future. It’s an evolving topic.

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Thinking a bit more…an option may be for it to be sold (rolled) into the Future Fund…this may actually be a sensible option.

The government would still have indirect ownership and control, whist the NBN being run commercially, like a well oiled GOC/pseudo-private organisation, without the burden of government bureaucracy.

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Does that also mean it would be focused on minimising investment and maximising profits for its shareholder? Although that shareholder would then be government ( in theory a proxy for us), what government gets it usually keeps or distributes for its own convenience and those predictable pre-election ‘projects’.

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Which is where such proposals inevitably fail. Capitalist fundamentals ignore everything but the immediate. What isn’t short-term, short-range profit isn’t seen.

Infrastructure like the NBN (which is part - not all - of telecommunications infrastructure) is valuable beyond that limited range. Its benefits are difficult to quantify and thus invisible to the short-sighted.

It may well be that we would derive maximum benefit from the NBN if it was provided free-of-charge to users. That would not maximise shareholder value, but could optimise benefits to the nation, its economy and society. Thinking outside the Totalitarian Capitalist box can be dangerous. :wink:

In short, privatising the NBN stands to perpetuate the market failures evident in privatising the old copper network.

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Not yet ready for the annual report, however an end of year financial report appears to be on it’s way for today.

Of relevance in the commentary re those not yet serviced by the NBN.

The company noted in fine print that the 2020 completion goal covered “standard installation premises only.

“Network construction will continue beyond 2020 in relation to new residential and business developments and complex installations, which includes properties that are difficult to access, culturally significant areas and heritage sites,” it said.

ITNews commented further.
It was not immediately clear how many premises would fall into one of these categories.

There is a first time for everything!
This might also suggest any premise not covered/included in the scope of current signed contacts will miss the 2020 deadline.

One way not to over spend the budget, prior to any sale?

Also a great uncertainty for those who miss out with currently no assurance of how and when they will be connected. I look to the stars for inspiration! :wink: Or should I be more optimistic?

There are has also been a pre-release statement from the NBN CEO saying they made a pretax operating profit for the year. It should not be too long to wait and see how that is viewed by the expert analysis in contrast to the spin of political convenience?

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It looks like they’re bending over backwards to be able to pretend that the NBN is “finished” at some point in the not-too-distant future. My guess is that the government will try to rush through a sale before the next election.

[edit]
It depends on how the numbers are spun, I guess:
https://www.computerworld.com.au/article/665293/nbn-co-still-red-climbs-towards-profit/

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My forlorn hope is that the Senate and/or the Nationals will block a sale. Nobody wins from a sale except the new monopoly owner and the political parties that will receive ‘in kind’ from that owner.

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I’ve noted that the NBN Co has a new member of senior staff.

The expanded role that Mr Will Irving as Chief Strategy and Transformation Officer will fill is spot on for setting the business up for a sale. An ideal role for someone experienced in Corporate Law and Commerce.

Rubbery figures? Also by definition neglects the interest on the $19.5B government loan or the additional up to $2B approved for borrowing on the market!

It didn’t rake long for a bunch of journalists with a passing interest in computing to see past the obvious in the financial positioning of the NBNCo.

I’m forgetting the announcement is not really about investor sentiment. Is it more likely about conjuring another miracle (box of magic tricks) for public (average voter) consumption?

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This probably doesn’t really belong in this thread, but doesn’t warrant one of its own so I’ll shoehorn it in anyway. The article reads like yet another call for competition in telecommunications infrastructure.

As has been pointed out repeatedly, the infrastructure is a natural monopoly. Permitting multiple commercial networks would lead to a repeat of the Optus/Telstra HFC fiasco. Lucrative markets served to excess, while others go without. We have that now with mobile infrastructure (multiple fragments of network, largely covering the same bits of country). Every dollar wasted on overlapping infrastructure ultimately come from you and I; the consumer/taxpayer. Australia can’t afford it.
https://thenewdaily.com.au/money/consumer/2019/08/16/telstra-optus-nbn-pressure/
The comments are worth a read.

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Another contribution from Paul Budde:

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One of the options from that article:

  • NBN disaggregated by technologies and each sold separately (Michael Cosgrave)
    As recommended by the 2014 Vertigan Report, in this option FTTx, HFC, fixed wireless and satellite could be sold and would compete with each other.

That could potentially be the worst of all possible worlds, as the owners simply would not have any reason to compete.

I don’t understand why the former ACCC boss would argue for it to be sold as a monopoly, while a former Telstra executive says it should stay in government hands.