Public Finance

Public Finance

The economy rationale for the government construction of a National broadband Network and the characteristic of such a network which are lkely to be consistent with the achivement of an effective and equitable outcome

The previous Australian Government had proposed to build a National
Broadband Network (NBN) that involved connecting households

to a fibre optic network (a so called ‘fibre to the node’ network). Identify and discuss the
economic rationale for the government construction of a NBN and the characteristics of such a network which are likely to be consistent with the achievement of an efficient and equitable outcome.

In your answer you should clearly define what is meant buy a NBN. Your
discussion should consider the properties of a NBN that are consistent with the

achievement of efficiency and equity objectives. Your answer should represent
a critical discussion of the NBN using economic principles canvassed in

Public Finance.

Starter references:

Despite being under review, the following website provides good background

information and an overview ofthe National Broadband Network.

http:llwww.nbnco.com.aulabout-us.html There are also a series of articles in the following journal that may provide some useful background information:

Australian Economic

Review volume 43(2), June 2010.

Finally, there are a number of perspectives that one may take when examining
the economic rationale for a broadband network and what role government

should play in its development. The following article provides one perspective
though there are others which can be identified with appropriate research:

Czernich, N. et al. (2011), ‘Broadband Infrastructure and Economic Growth’,

The Economic Journal 121(552), pp. 505-32.