Australia’s failed experiment in government-owned broadband

[Commentary] Australia has spent $7.3 billion on its highly touted National Broadband Network, but made fiber available to only about 260,000 premises, which works out to over $28,000 each.

Nearly a decade ago, it had a chance to take a different path. In 2005, Australian phone company Telstra would cover 87 percent of households on its own nickel, with the government pitching in $2.6 billion to extend the build out into rural areas. The catch: Australian regulators would agree to follow the US model of exempting next generation networks from network unbundling requirements, thus creating incentives for intermodal competition from cable and wireless. The answer: No sale. Australian bureaucrats and politicians decided instead to heed the cries of access seekers and follow the European approach of “encouraging competition” through massive regulatory intervention.