Labor’s Communication spokesman Senator Stephen Conroy is trying to make political capital this morning out of this Institute of Public Affairs paper that bags the Government’s plans for using WiMax technology for rural broadband.

True, there is some stuff in the paper, written by Chris Berg, that supports Labor’s cause. In particular there are striking maps of the coverage the Government is claiming will be achieved by WiMax, compared to what the IPA – and many other commentators – reckon is likely.

Conroy describes the result as being like a swiss cheese, but on the IPA maps there will be more holes than dairy product.

Having said all that Conroy must be hoping that the Canberra Press Gallery and other commentators don’t read the whole report, because there is plenty there to give Labor grief as well.

Berg’s paper, in line with the IPA’s small government predilections, is an argument for the relaxation of Government regulation, and while he backs the need for a fibre to the node network – as promised by Labor – he also points out that government funding of the network might well mean that the proceeds of the sale of Telstra are simply returned to Telstra itself.

Berg argues there is no justification for Government funding of a network that could be built commercially – which is exactly what Communications Minister Helen Coonan has been saying. Berg concludes:

Instead of regulatory reform, both the ALP proposal and the Federal Government’s proposal lock the telecom­munications sector back into a cycle of government investment and regulated access…Broadband in Australia is less than it could be, not because the federal government has failed to assume respon­sibility for its infrastructure, but because it refuses to reform obsolete regulations that hold private investment back. Bring­ing the government back into the tele­communications market is no solution.

Not everyone would agree. The counter view would be that if something as vital as communications infrastructure is a natural monopoly, then it is better to have that monopoly in public hands. The only alternative is a huge regulatory structure and a raft of bureaucrats to artificially ensure limits on power and reasonable competition.

The IPA report is interesting, but politically very much a double-edged sword.

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Peter Fray
Peter Fray
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