Assessing the benefits of high-speed broadband: Lessons from Australia's National Broadband Network (NBN)

Andrew Sinclair

Information Economics and Policy, 2023, vol. 65, issue C

Abstract: This study reviews the economic benefits analysis conducted in 2014 for the National Broadband Network (NBN), one of Australia's largest ever public infrastructure projects. The review identifies that the NBN's benefits were overstated due to error by an estimated $17–20 billion in 2014 present value terms, an amount sufficient to eliminate the NBN's forecast net economic benefits. To provide an updated view on the benefits of high-speed broadband in 2022, a stated choice experiment is conducted, finding that the WTP has grown since 2014 at an annual real rate of 8.8 percent for download speeds and 11.5 percent for upload speeds. Even at these growth rates, however, the benefits of the NBN remain materially lower than forecast in 2014. Further, the analysis finds high heterogeneity in the household WTP, with smaller and lower-income households reluctant to pay a premium for speeds much faster than 50 Mbps, indicating that the adoption of the fastest available broadband speeds is likely to remain low. The study highlights the potential value of cost-benefit analyses, but also the risks, particularly where they are relied on to justify enduring extensions of government ownership and control. The paper concludes by identifying learnings for policymakers and cost-benefit analysis practitioners seeking to assess and optimize the economic value of public infrastructure investments.

Keywords: Telecommunications; High-speed internet; Fixed broadband; Willingness-to-pay; Choice analysis; Cost-benefit analysis; Public infrastructure; NBN; Australia (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:65:y:2023:i:c:s0167624523000471

DOI: 10.1016/j.infoecopol.2023.101062

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