Queenstown Chamber of Commerce

We’ll Pay Dearly for this NBN Folly
By Henry Ergas
21 July 2010

EIGHTEEN months ago, Telstra proposed risking $10 billion of its shareholders' money building a high-speed broadband network.
After that bid fell over, the government, dizzy with its success in the polls, decided to build a fibre network of its own. Why? Because, Kevin Rudd said at the time, the alternative would have been to pay Telstra "billions of dollars in compensation".
Last Sunday, the government announced an initial deal between Telstra and the National Broadband Network Company. Under its terms, Telstra will receive payments and benefits totalling $11bn post-tax. On top of that, taxpayers will have to invest about $40bn of their own money.
This, we are told, is a policy triumph. A triumph? As Pyrrhus said after the battle of Asculum: "One more such victory, and we shall be ruined."

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This article was first published in The Australian online on 28 June 2010.

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