The Sydney Harbour Bridge and the NBN

I don’t propose making this blog a full-time refutation of every misstatement made about the National Broadband Network: I’d never have time to write anything else.

Henry Ergas tells us in The Australian (probably paywalled) that the Sydney Harbour Bridge can’t be used as an analogy for the NBN, because (a) the Royal Commission that examined the harbour crossing in the early 20^th century created a cost-benefit analysis (based on forecast rising property values and rail income), (b) on the basis of that analysis, the bridge was expected to yield an operating profit on rail income alone, and (c) rather than being “gold plated”, Bradfield settled on the second-cheapest tender and avoided “novel” designs.

There may have been a cost-benefit analysis of the dear old coathanger, and it may have offered up a model for cost-recovery - but it was based on cost estimates that by the end of the project were no longer accurate.

While the original contract was more than £100,000 below Bradfield’s estimate, and well below the £6 million originally authorized by the NSW parliament, the final cost more than doubled Bradfield’s expectations.

Some quick details from the Sydney Morning Herald via Trove:

The original tender was for a little over £4.17 million pounds (http://trove.nla.gov.au/ndp/del/page/1228584?zoomLevel=1)

The builders, Dorman, Long and Co, eventually received £4.9 million pounds (attributing the increase to higher wages, among other things – http://trove.nla.gov.au/ndp/del/article/16845323?searchTerm=sydney%20harbour%20bridge%20sums%20up&searchLimits=).

In 1931, before the bridge opened, the NSW Auditor General estimated the total project cost had already passed £8 million (http://trove.nla.gov.au/ndp/del/article/46623699#pstart3444730).

Different sources put the ultimate cost at about £10 million – but even at the lower £8 million, the blow-out was sufficient to completely invalidate any cost-benefit analysis. We ended up with a toll to cover the balance.

Finally, a word about “novelty”. Optic fibre is not a “novel” technology by any reasonable definition of the word. Australia began to take notice of the technology in the 1970s; there were deployments by Telecom in the 1980s. Optical fibre is, technically, no more novel than the design of the Sydney Harbour Bridge.

Bleating about the NBN opt-out again

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(Cue background music: “One of These Things is Not Like The Other, from Sesame Street)

Everyone’s up in arms about the “opt out” NBN, it seems. Here’s some snippets.

“The three biggest states have opposed the move by NBN Co to install fibre-optic connections to homes and businesses without asking permission” – The Australian Financial Review.

“The opposition communications spokesperson Malcolm Turnbull said the shift to an opt-out policy confirms that the NBN business plan depends on compulsion” – The Australian.

“Victoria’s … technology minister has confirmed that the state does not support the introduction of Labor’s preferred ‘opt-out’ model for the National Broadband Network” – Delimiter. 

“If Australian consumers want a fixed line for telephony or Internet access, they are going to have to use the NBN’s line” – Malcolm Turnbull on his blog. 

Customers “will be forced into connecting to the national broadband network (NBN) unless they ‘opt-out’” – The SydneyMorning Herald.

How many of these stories have a 2012 dateline? One. The rest are from 2010.

For whatever reason, The Australian Financial Review treated a years-old government policy as a Major News Announcement, duly handing a stick to three state governments, pointing to a piñata called “The NBN”, and letting them swing.

I wonder how the premiers would feel if the Federal Government challenged their water utilities’ rights to fix sewer mains running under private backyards?