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Has the Federal Government got the Tiger by the Tail?

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The Federal Government is expected this week to announce the outcome of the tender for the roll-out and operation of a new open access, high-speed, fibre-based broadband network.

In its tender specification the Government confirmed the objective of having this new network provide minimum downlink speeds of 12 megabits per second to 98 per cent of Australian homes and businesses.

With a financial commitment of up to $4.7 billion of taxpayers funds and agreement to consider (and reveal) the necessary regulatory changes required to facilitate the network's roll out, there can be little doubt that this announcement will be a pivotal moment in Australia's telecommunications history.

Equally it will be a pivotal moment in our nation's economic history.

At the turn of the century there was much discussion in political circles about the idea of 'old' and 'new' economies - those based predominately on agriculture and mining contrasted with those embracing information technologies and depending upon human capital. As is often the case, this was a false dichotomy - a proposition crafted for the sake of political argument rather than rational analysis. Over time it was shown that the application and adoption of information technologies and investment in human capital across many industrial sectors could deliver greater productivity, higher incomes and more jobs.

As people and institutions, including governments, across the globe confront the task of generating economic activity in (hopefully) today's more sober and risk-aware environment, the significance of transaction cost and information asymmetries should be at the forefront of economic and political discussion.

There will surely be little rejoicing among populations if, at the end of a period of multi-trillion dollar government expenditure, the nature of economies - and societies - are not at least reformed if not fundamentally recast.

A high-speed broadband network should never be considered an end in or of itself. It is an infrastructure that enables and underpins economic and social activity. When supported by the adoption of policies that encourage investment in further information technology infrastructure - for example through tax investment allowance recognition for business expenditure on system and productivity software - a broadband network can enable economic activity and investment in valuable, productive, ecologically sustainable activities.

I sincerely hope and anticipate that the Federal Government will see the end of the NBN tender as the start of a period of public and private investment in the building blocks of a genuinely new and progressive economic infrastructure.

An infrastructure in which every school, university, hospital and public institution is connected to high-speed broadband. An infrastructure that supports the blossoming of on-line home based entrepreneurs and businesses. An infrastructure that embraces every citizen with tools and on-line applications that not merely connect people to government but which fundamentally enable participation in the processes of governing.

The NBN announcement will be neither the end of the start nor the start of the end of the age of information technologies. It will however be an opportunity - another opportunity - for our economy and our society to evolve and embrace the possibilities of a future much different from the past we have seen.

Simon Edwards Head of Government and Industry Affairs, Microsoft Australia

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