Coalition's NBN beats Labor's says analysis; Oracle sued for US$200 million

Australia would be $16 billion better off under the Coalition’s multi-technology mix NBN than under the Labor’s fibre-to-the-premises (FTTP) plan, according to a cost benefit analysis commissioned by the Coalition government.

The analysis found that Coalition’s NBN model would deliver a net economic boost of $18 billion to the country, compared to the $2 billion offered by Labor’s version, according to the AAP.

The panel that produced the analysis was headed by former Victorian Treasury head Michael Vertigan.

“When you do the cost-benefit analysis, which takes into account all of the social benefits to the whole society - e-health, education - even on that basis, the approach we’re taking is $16 billion better,” Communications Minister Malcolm Turnbull told the ABC.

“You don’t need one gigabit per second to video conference with your lecturer or to have a video conference with a health professional.”

The analysis found that providing wireless services to the bush would exceed the benefits by almost $7000 per household, the ABC reported.

But Turnbull said the government was prepared to wear that cost, according to the ABC.

“The cost of providing telecommunications to regional and rural areas is dramatically higher than people’s capacity or willingness to pay, hence there’s a big subsidy,” Turnbull said.

The Shadow Minister for Communications Jason Clare criticised the political leanings of those chosen to produce the report.

“This is not the independent cost benefit analysis by Infrastructure Australia that Malcolm Turnbull promised,” Clare said in a statement.

“Instead of appointing Infrastructure Australia to do the cost benefit analysis, [Turnbull] has hand-picked former staff and some of the most vociferous critics of the NBN. This includes well-known critics of the NBN Henry Ergas and Kevin Morgan, former adviser to Malcolm Turnbull Alex Robson and former Liberal Party staffer David Kennedy.”

Computerworld quoted IBRS analyst Guy Cranswick as saying: "The Vertigan panel is full of acolytes and sympathisers with the broader fiscal aims of the current government.”

However, Cranswick added that the report “does make a sound analysis of relative marginal investments and efficiencies to be gained over time with the mix of technologies”.

“That is not appealing in an ideal telecoms sense but it is pragmatic; tariff thresholds and service delivery had to be assessed,” Cranswick said.

Oregon sues Oracle

The US state of Oregon has sued Oracle for more than US$200 million dollars in damages, over the company’s role in the troubled Cover Oregon website, the state’s implementation of the federal Obamacare initiative.

The lawsuit alleges that Oracle officials made false statements, breached contracts and engaged in “a pattern of racketeering activity”, the Wall Street Journal reported.

Oracle worked as a technology contractor on the Cover Oregon health insurance enrolment website, according to the WSJ. The site was never launched and the state had to hire hundreds of people to process applications by hand.

“Today’s lawsuit clearly explains how egregiously Oracle has disserved Oregonians and our state agencies," Oregon’s Attorney General Ellen Rosenblum said in a statement. "Over the course of our investigation, it became abundantly clear that Oracle repeatedly lied and defrauded the state. Through this legal action, we intend to make our state whole, and make sure taxpayers aren’t left holding the bag.”

The lawsuit names Oracle itself; six Oracle executives including President and CFO Safra Catz; and Mythics, an Oracle reseller and consulting firm that acted as a middleman between the vendor and the state.

Oracle reportedly called the lawsuit “a desperate attempt to deflect blame from Cover Oregon and the governor for their failures to manage a complex IT project”.

“The complaint is a fictional account of the Oregon healthcare project,” the WSJ reported the company as saying. “Oracle is confident that the truth - and Oracle - will prevail in this action.”

The Oregon lawsuit follows a suit filed by Oracle in federal court, which alleges breach of contract and seeks more than US$23 million in disputed bills, the WSJ said.

Image courtesy Peter Kaminski under CC