[AusNOG] News: Minister Conroy contemplating Government-Fundedundersea cable?

[Mark Delany]

> Debt is debt is debt

A router is a switch is a hub; so says my accountant.

As with your real-estate investment, the rationale is that in the
long-term the NBN will actually return more money than it costs. This
contrasts with things like unemployment benefits where there is no
corresponding entry on the asset side of the balance sheet.

If you wish to disagree on an accounting basis, the two main arguments
dwell on the projected ROI. Is it a) too low to be worth investing in
and b) is it optimistically high for an infrastructure investment?

While fun and all, the accounting arguments are the trivial bit. It's
the economic arguments that are the true intangibles where the
costs/benefits are arguably much greater or much smaller than the
accounting outcomes. What are the social outcomes, blah blah blah.


For my money though, neither of these two arguments are as compelling
as that told by economic history. Namely that the glory days of
bit-carrying are obviously in terminal and irreversible decline. This
is the nature of an emerging utility. And, as with all early-stage
utilities there was much money to be made from the premium of
scarcity. At first. (c.f. turnpikes, railways, electricity, Ozemail).

But history says those days never last (powerful lobbying and
corruption notwithstanding). Bit-carriers will eventually go the way
of road-builders and electricity suppliers. Heck, the smart money has
already moved up the food chain, consolidated for scale or sold out -
all classic symptoms of a utility in the making.


The question of the NBN is not that there will be a transition to
utility. It's a question of whether an orderly transition with a quick
clean burial of the glory days is better than a messy, slow transition
that clings to the scarcity premium for as long as possible.


Mark.