They do things differently in Tassie

Moonscape logging on my recent trip to Tassie

The government of Tasmania (that'd be the Lennon government, not Gunns in case you're confused) do things differently in Tasmania. They paid for a big DC power link from the island to the mainland, which was switched on just in the nick of time as Tasmania ran out of water to run its hydro dams. Apparently the link, built to export electricity to the mainland, has flowed almost exclusively in the other direction since it was built.

Anyway, when you're running cables it's very easy to stick a few fibres in the cable run, and that's what they did. Basslink includes a fibre connection to the mainland, which would be a boon to telecommunications services in the state. Currently the only active fibre is owned by the corporate gorilla Telstra, and as monopolies tend to do, they charge like there's no tomorrow. ISP Internode, which recently stopped selling residential ADSL2+ and 8 megabit ADSL1 plans, claims Telstra charges 6 times more for the Hobart-Melbourne route than they pay to ship data between Melbourne and the US.

This would, of course, all be solved if the fibre attached to Basslink were switched on. It's been sitting there since 2003, unused. Now it emerged that the company that Tasmania contracted to operate the fibre gets paid $2 million a year regardless of whether it's operating or not. So the company would need to guarantee at least $2 million in profit a year to do better than the alternative of letting the fibre sit on the bottom of the sea, dark.

This is the thing about privatisation which always ends up burning governments. The commercial world they're trying to entice holds all the cards, and has many other investment opportunities open to them. They have expensive and clever merchant bankers and lawyers, just waiting to negotiate the vendor (the government, that is, us) up against the wall. We see it time and again when previously "commercial in confidence" contracts between the private sector and governments are leaked or opened up: governments sell the family silver, but continue to take all the risks.

When negotiating these deals, the private sector always seems to manage to put in risk-avoiding clauses that leave the public sector carrying the can if it doesn't work out. With little risk, the private sector ends up just as bloated and inefficient (often even worse) as the public sector they replaced.

So if you're looking at the private sector to be more efficient, under the types of contracts that get signed, they're not. It costs more for private companies to raise money in the bond markets, so it's more expensive. And then they need a profit margin added on top. All up meaning it costs more, while tying the hands of governments for decades to come.

If you're a Tasmanian, check out Digital Tasmania and lobby your MPs to get this sorted. It's really very simple to fix. Just turn on the fibre!