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The Forum > Article Comments > Broadband baloney: Kevin Rudd's unhealthy addiction to ICE > Comments

Broadband baloney: Kevin Rudd's unhealthy addiction to ICE : Comments

By Jonathan J. Ariel, published 4/4/2007

Kevin Rudd's broadband plans are a clear, present and future danger to the economic security of Australia’s workers.

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Jonathan political pundits like Michelle Grattan weren't upset at Mr Rudd's idea for tapping into the future fund see http://www.theage.com.au/news/national/sugar-coating-on-bitter-pill-turns-libs-sour/2007/03/21/1174153159548.html
Posted by billie, Wednesday, 4 April 2007 9:15:33 AM
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How is it possible to conflate the idea of the Internet with a mega central supermarket? Do we not already have a paucity of retailers in the news business - with the prospect of even less to come?

The very existence of Online Opinion trumps the essence of this piece.

As long as control of the Internet remains in public hands, then even an old toss-pot like me can give the lie to a media mogul's worst excesses.

Populist? You bet!

You're right about one thing though. The price of fuel ain't going anywhere but up.

- and the Internet will go a long way towards repairing the economic and social fallout that must follow.
Posted by Chris Shaw, Carisbrook 3464, Wednesday, 4 April 2007 9:16:10 AM
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Is Kevin Rudd "raiding the Future Fund" ?

Given that the Telstra (Transition to Full Private Ownership) Bill 2005 specifically allows the Govt. to sell its shares from the future fund, I think not.

The Govt. always intended to sell these shares, why else was this section in the act?

Costello was being too cute, he has lost Howard $2 billion of pork by telling porkies.
Posted by Steve Madden, Wednesday, 4 April 2007 10:00:26 AM
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He is correct in stating that Rudd's policy is not the best but the Coalition have been pretty useless in that department too.

The main benefit of Labor policy will be to prod Senator Coonan into ending the current stalemate in broadband investment. The sharemarket is full of money eager to be invested in infrastructure. Relax the rules a little and the network will be built. There is no need to raid the superfund.
Posted by Rob88, Wednesday, 4 April 2007 10:17:52 AM
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I'm a tax payer and via that, I'd have to guess that some of that tax is going into the Future Fund, but I keep asking myself just how the Future Fund is going to help me? I thought it was, in reality, a slush fund for the retirement benifits of poilticians, therefore it most likely won't help me in the slightest, apart from the fact that Howard/Costello can plunder it at any time they like to prop up their own hideous agenders.
However, I am an Internet user, just the same as most others who read this post and Internet speed is appalling out where I live. Since I rarely ever go anywhere, don't smoke and live pretty lean, I'd prefer to pamper myself with high speed Internet than lose my tax to the whims of Howard & Costello.
When the economic bubble finally bursts (and it will) all that money in the Future Fund will evaporate within a very short space of time. I'd much prefer to have some of that money spent on the 'people' now instead of waiting until peak oil, Global warming or some other catastrophe destroys the World economy and with it, the Future Fund!
Mr. Ariel, I rather think you, as a public servant, might be more concerned with keeping the Labor Party's hands out of the fund that will secure your retirement.
Wildcat.
Posted by Aime, Wednesday, 4 April 2007 10:24:05 AM
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a cute 'opinion' piece jono - try sprinkling it with a few more facts so we can take you more seriously...perhaps
Posted by stormont, Wednesday, 4 April 2007 10:25:47 AM
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Another piece of trite ALP-bashing from Jonathan Ariel.

While I'm not an ALP voter, I'm moderately impressed by Rudd's willingness to invest taxpayers' money into the future infrastructure needs of the nation.
Posted by CJ Morgan, Wednesday, 4 April 2007 11:14:02 AM
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Steve Madden states that the government may be going to sell the Telstra shares from the future fund. That may be, however if the returns from that sale are retained in the future fund, then they would actually be increasing the value of the future fund. That however, is just speculation, on my behalf and Steve's, anyway.

The motivation of News Ltd et al to push this is obviously so that they can ensure that more people will have access to the rather unregulated 4th form of media. I don’t think that News or Lachlan Murdoch have any real worries about their access to high bandwidth networks.

Most Australians should currently have access to ADSL2+ (dependent on how far from the local exchange they are), however Telstra currently has not "turned on" these exchanges and won't until a competitor such as Soul (in regional NSW) adds their own DSLAMs to the exchange. This is what makes the propaganda I received with my last Telstra phone bill so laughable.

What I am concerned about with regards to the policy, is the lack of detail regarding what is proposed. For example, if a Rudd government is just planning to implement a Fibre to the Node (FTTN) network, such as that proposed by Telstra or even the G9 group (Optus, Telecom New Zealand (AAPT/PowerTel), iiNet, Macquarie Telecom, Internode, Primus, Soul and TransACT), how will they get past the impasse that currently exists to ensure that competition remains fair (well at least as ‘fair’ as it currently is)?

The policy from what I can see is basically “we will throw money at the industry and hope that they will come up with something that is not anti-competitive and will work”. A better start would be to see that Telstra switch on their ADSL2+ capabilities in regional areas and some fairer pricing that doesn't involve bundling home phone, mobile, Foxtel, electricity etc. just to get a decent priced connection.

cheers,

d
Posted by Deryck, Wednesday, 4 April 2007 11:29:53 AM
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Two Points:

1) The private sector has had years to get it's act together and improve the communications infrastructure and hasn't done so. This is infrastructure that is critical to the economy in the future and so it's important that the government show leadership on the issue, even if that means using tax payer money. Ideally any tax payer input should mean public ownership, and the government should receive it's share of any revenue.

2) Even if the government isn't able to gain a direct return on investment from the project, infrastructure investments help boost the economy which increases tax revenue and can provide an indirect ROI not available to the private sector. In your example if the government can gain enough extra tax revenue from the Super Mall to pay off all expenses, why shouldn't the politician push for the mall to be built?

Finally:

"He also proposes that the Super Mall offers the latest in customer conveniences, forgetting for a moment that he is talking of a small town in a mediocre state in a middle ranking country and not of a major city in a G8 nation."

Major cities in G8 nations got to where they are by making the hard choices and investing in the infrastructure required to drive the economy.
Posted by Desipis, Wednesday, 4 April 2007 11:43:13 AM
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My, what a sad piece of overblown rhetoric this is.

>>...Mr Rudd gleefully runs towards populism and 10-second sound bites that don't stand up to rigorous analysis<<

A pretty fair analysis of your own contribution to the discussion, Mr Ariel.

>>While Americans are united as one nation under God, Opposition Leader Kevin Rudd would seem to be keen on bonding us, as one nation under the fibre optic cable<<

Pretentious? Moi?

>>The extra bandwidth Mr Rudd offers [is] a bit like your daily home delivered newspaper publisher demanding you fund a bigger mailbox<<

Mr Ariel leans heavily on the argument that Internet speed and bandwidth only benefits the "media and entertainment industries and the telcos [by selling] more of their wares online"

Breathtakingly shortsighted. A position that can be imagined only by someone who has never in fact worked in the real world, where revenue and profit are of critical importance.

Over the past few years - this will no doubt come as a surprise to Mr Ariel - more and more businesses rely upon the Internet to conduct their day-to-day activities. These range from simple accounting stuff like sending out invoices or paying bills, to dealing with the taxman (www.ato.gov.au), ASIC (www.asic.gov.au) and their State equivalents (for payroll tax etc.)

At an individual level, I now pay more than 95% of my bills online, book hotels, book holidays, book airline tickets (after tracking down the cheapest on offer), find the best rate for CTP Green Slip insurance and so on. Plus a whole host of other information-based stuff, from checking Latin grammar (yes, you can) to researching the content of a prescription drug to see if anyone around the world has reported side effects.

Using a "Super Mall" as the principle example betrays the author's complete lack of understanding of what the Internet does, or is used for.

>>Clearly the politician has slept through the last decade...<<

Sorry, I think this charge is more appropriately levelled at the author of this shallow and ignorant piece.
Posted by Pericles, Wednesday, 4 April 2007 11:58:35 AM
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Sounds like Jonathon is gearing up to retire and is concerned his publically funded nest egg is aobut to be srcambled.

Most people know the future fund is a crock - if all the C'wealth public servants were to retire today ( we wish) there might be an issue with helping them make that final payment on the "shack" in Batemens Bay or Dromana - but we know they wont be doing that.

Most ICT reports I have read support the notion in priciple

- some conservatives are a feared that Rudd is setting a precedent by raiding Peter Costellos slush fund - he has been scaring the bejesus out the nation about the unfunded super liability and the crap assumptions made in the Intergenerational Report for 5 years - because he and his mates are philsophically against government commiting to infrastructure development - they would sooner leave it to the private sector - well we all know when it comes to quarrying, building shopping compllexes and producing garbage magazines and commercial media we are great but when it comes to any thing else on a national scale our captains of industry just cant cut it.

Spend the money Rudd
Posted by sneekeepete, Wednesday, 4 April 2007 12:14:11 PM
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Allow me to clarify. High speed internet connection is a good thing. No, a great thing! Hey, I'm on ADSL2 and it's very, very bad value for $60/mth.

But, I don't see how see why taxpayers must fund an improved network. If the market doesn't produce such a network maybe there's a message in there for us. I do however see that media groups and telcos would welcome ever more gravy been spooned out to them.

If the government gets back into the telco business as Mr Rudd espouses, what industry will the government next go into? Where do we draw the line?
Posted by Jonathan J. Ariel, Wednesday, 4 April 2007 12:35:42 PM
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Associates of the Internet, compliments for a real good set of Commentaries, keep up the good work.

As a retired Old Cockie with still plenty of bush insight, could say that though Rudd still looks a bit like a learner, could reckon his hearts in the right place.

Personally gave Howard away when he showed his true colours by sidling up to Bush and Co.
Posted by bushbred, Wednesday, 4 April 2007 1:16:04 PM
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OK, now I understand you better Mr Ariel. You are in favour of Internet Connectivity Everywhere, but against the notion that the government has a role to play in establishing it.

In your article, you say "[t]he politician doesn't even consider that if [it] was such a good idea, it would have been picked up by the private sector. Evidently his passion for this... concept, while great, is dwarfed by his lust for populist policies regardless of its financial merits."

If you had even the slightest understanding of the nightmare regulations that (I even hesitate to use the word) "govern" the Telco industry right now, you would know exactly why the private sector has held back. Hey, even Telstra, until Ms Coonan twisted their money-grubbing arm in the wake of Rudd's proposal, had taken their bat and ball and gone home on this one.

The industry is in a mess. The sale of Telstra has been horribly botched, and every politician who has had anything to do with it is running for cover. The opportunity - to separate the infrastructure, which the Australian people have already paid for over many years, from the provision of services across that infrastructure - was wasted, and we are now seeing the results.

No-one is happy with the present setup except the overpaid fat cats who are sitting on the top of a virtual monopoly, held together by government indecisiveness and inaction.

I strongly suspect that by the time it comes for Rudd to deliver on the commitment, the present government will have bent the rules even further in favour of strengthening Telstra's monopoly, out of sheer spite.

But in the meantime it remains a good idea, and one that deserves intelligent discussion. Referring to it as a "monstrosity", and to Rudd's "lust for populist policies regardless of its [sic] financial merits" does not convince me that your approach to the topic is anything more than personal "look-it-me" grandstanding.

Incidentally, perhaps you would like to comment on how this fits into your argument?

http://www.smh.com.au/news/technology/coonan-could-set-broadband-pricing/2007/04/03/1175366243738.html
Posted by Pericles, Wednesday, 4 April 2007 1:23:20 PM
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Mr Ariel, you've totally lost me. That was about the strangest broadband metaphor since USA Senator Stevens' famous speech on net neutrality:

"It's not a big truck. It's a series of tubes."

http://en.wikipedia.org/wiki/Series_of_tubes

I'm no economist, but isn't the internet more like the roads than the mall? When the roads have fallen into disrepair, and the petrol prices are high, government investment into these problems is quite a normal reaction, isn't it?

(Not that I necessarily think Rudd should be spending quite so much on it)
Posted by Dewi, Wednesday, 4 April 2007 1:45:28 PM
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The writer is spot on. The idea of raiding the Future Fund is irresponsible, whilst the media companies (especially Newscorps) rush to endorse Mr Rudd's broadband policy is obviously opportunistic.
Posted by baldpaul, Wednesday, 4 April 2007 2:40:35 PM
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"The investment performance of the Future Fund would be judged independently of its Telstra shares until the Telstra stake could be reduced to a level that did not dominante the fund." Nick Minchin-Finance Minister.

So I repeat The Future Fund is not being raided. The Govt. always intended to sell its Telstra shares. Now because of Costello playing political games it cannot, so 20% of the future fund is in one stock, very poor investment management.

Jonathon you may be able to get ADSL2+ in Darling Point but in regional Qld it is a pipedream. In fact ADSL is a pipedream for many.

With our Govt's handling of telecommunications over the past 10 years we have seen the PSTN network patched up. Even getting a 100 pair cable laid is impossible in some areas. Telstra have used pair gain to save on costs ect ect. ITU G.992.5 should be available to anyone who has a copper wire into their home (barring very remote regions), why is it not?

Governments should be all about building infrastructure, like rail, roads, ports, airports and telecommunications.

Intesting to note that the future fund almost exactly equals the amout Howard and Costello have made from asset sales in the past 10 years, no economic miracles, no real surplus bugets. Just selling the family jewels to merchant banks
Posted by Steve Madden, Wednesday, 4 April 2007 3:37:28 PM
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Jonathan we drawe the line where it suits us the circumstances of the day - I know some think it is written in stone that governemtns have no business being in business - but I would suggest there has been a lot achieved when they have done so - governments just dont pick the right time often enough to get out of it - and a lot of bad done when they are marginalised in some indutries - ie Health USA style.

There is no line
Posted by sneekeepete, Wednesday, 4 April 2007 4:08:57 PM
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You can never be too rich, or too thin... or have too much bandwidth.
Posted by Johnj, Wednesday, 4 April 2007 8:13:05 PM
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Maybe there is life in Dr Death.Kevin was infamous in reducing the bloated bureaucracies in Queensland,perhaps he could do likewise for the rest of Aust.I will vote for that!

We have a PS future fund for Pollies and Public Servants,does that mean the unwashed masses don't have a future?

We have too much Govt and suffocating bureaucracy,we need to sack the States and the rest of us will have a future.

Alas little Kev I fear will be nothing more than Dr Lipservice.
Posted by Arjay, Wednesday, 4 April 2007 10:28:02 PM
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Cook Shire had barely one computer in Council let alone one in the community at the turn of the year 2000. It is only in the past few years that people are finding the Computer Internet and Mobile Phones as a valuable resource here.

Thanks to the FARMWIDE - CONNECTING THE NATION - a drive on Partnerships and the opportunity of getting the first HUB with TGP.com.au.... that we are learning as a community, joining in with Australia and the rest of World.

WAKE UP!

The thing lacking is continuity. TPG had to pull out of Cooktown because of the lack of infrastructure in Telecommunications here (ie: wet season, STD's etc... plus ALL-the USER-fees involved) - as we are so isolated, and providing service over such rugged distances (+ old lines) is extremely difficult.

Loosing the initial Farmwide partnership HUB has meant we in this community are now vulnerable to AD HOC IPS service providers who can charge what they want. Most don't care two hoots for our technical problems, or how much it all costs. It is a major issue in communications, here in Cape York.

Perhaps if you just stuck to the facts Ariel under a call for "Liberty And Justice For All", you might trade some of your addiction to yuppy groove for a sensible analysis and;

a) you might influence the public service to help citizens everywhere achieve better allocations through the opportunity of improved resource distributions and;

b) influence either political party to help solve problems regardless of the brownie points locked between power struggles.

Ya Never Never Know If YA Don't Have a Go eh?

Also, anyone who claims the Future Fund would loose needs their denials read! The point is that it has been stated that it "could" come out of an income stream, not savings. The idea is one that would work to build on our nations future.... not the reverse.

This issue is too important to play wreakless with. We need those at the helm to solve problems not waste idiot time quarrelling smoke screens.

http://www.miacat.com/
.
Posted by miacat, Thursday, 5 April 2007 12:21:30 AM
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What a pathetic collection of eye grabbers you use for a title.

And you come to the conclusion a politician would do anything to get into office. Is this your thesis? Have you got your rewards academically? It's so insightful mate.

What a load of recycled QLD drinking water.
Posted by RobbyH, Thursday, 5 April 2007 10:25:30 AM
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The title inferred a drug? well it may well be a dope was involved in the story.
Conservatives must understand substance is what they need not such miss information as this.
The future fund Costello says is for superannuation for public servants?
My super tax's no one its going to keep me of social security and maybe the government should fund it own Dept's.
Having sold Australians something they already owned Telstra just maybe we could use some of the money to do what when publicly owned it was charged with doing?
Plausible denial is worn out this government and its supporters must forget the lie and find policy's.
Posted by Belly, Thursday, 5 April 2007 4:04:18 PM
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Jonothan, your analogy of the mall is spot on for what the Internet does, however you have completely missed the point.

The reason why the market hasn't yet rolled out a next-generation network is because of the absolute mess the government has made of the privatisation of Telstra. You appear to have no insight into or understanding of the current state of play in the telecommunications industry.

Now, I did write out a long and detailed reply, but for some stupid reason this site limits posts to 350 words and I had 509. Instead, I think you can get a good picture about how the Howard government has screwed Australia over with regards to telecommunications by reading the articles on the site here:

http://web.mac.com/simon_hackett/iWeb/Site/Technology/Technology.html

It is by Simon Hackett, the founder, owner and CEO of Internode/Agile - who has been an instrumental player in the telecommunications industry this decade.
Posted by shplorb, Thursday, 5 April 2007 7:24:14 PM
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To shplorb

Yes, the telco regulatory enviroment is a dog's breakfast, But no, not all the blame can be sheeted to the Howard government as so many would like to do.

The reality is: does the private sector deal with the current state of affairs as they are; or does John Howard try to unscramble the eggs? Or is there a third way that will not involve raping the taxpayer's wallet?

Of course the ideal situation would have been at the very begining to break up Telsta into its different business lines on the one hand and divorce them from the natural monopoly activites on the other.

But while that would have raised compettion, the sale proceeds would have been a fraction of what has been realised to date. And isn't that some pollies' only concern?
Posted by Jonathan J. Ariel, Thursday, 5 April 2007 8:12:58 PM
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The money that Rudd has promised is very little in the scheme of things. The Fed budget each year is over $200 Billion and the greater economy is over $1 trillion. If Howard can pull $10 Billion out of the hat without asking treasury, then a couple of Billion for broadband would be a snip.
The upstart of providing high speed internet to 98% of Australians is that it rapidly devalues Telstra's cable network as well as allowing people to bypass Foxtel / Austar's pay TV monopoly. The promised 12Mb/s speed is good enough for a couple of HD TV channels being streamed.
For a more in depth discussion of the issues surrounding wide scale deployment of broadband I would suggest people visit Whirlpool and the ALP broadband plan thread.
http://forums.whirlpool.net.au/forum-replies.cfm?t=706089&p=1
Posted by seaweed, Friday, 6 April 2007 10:06:32 AM
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I get the distinct impression that Jonathan Ariel has never run a business.

Firstly a good internet is an investment which will create wealth, the future fund is a liability. It does not follow that one is at the expense of the other. That proposition is just a smokescreen to hide the failure of the Howard government to develop a business future for when the mining boom runs out of steam.

An internet at the maximum speed would give business an opportunity to overcome the tyranny of distance. You would think any competent government would not leave us with an inferior system, but that is what the coalition has allowed. A private system is fine but this is not happening and our business is suffering as a result, I know I run one.

Kevin Rudd has at least run a consulting business aiding exporters he has had some real world experience and would know more than the academic lawyers and professional politicians on the Governments side.
Posted by logic, Tuesday, 10 April 2007 8:27:49 AM
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For a more in depth discussion of the issues surrounding wide scale deployment of broadband I would suggest people visit Whirlpool and the ALP broadband plan thread.
http://forums.whirlpool.net.au/forum-replies.cfm?t=706089&p=1

what a sick joke

WhirlPool is simply ONE of Howard's FireWalls, funded and set up by Howard to keep the mushrooms away from his nasty deeds

to see the truth about these deeds [deleted from Whirlpool of course] go to http://www.themediadoc.com > Combined Stuff > BigPond $100 million fraud

BUT that fraud ARRESTED by little old me
Posted by Divorce Doctor, Tuesday, 10 April 2007 7:50:56 PM
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