The IT Debate: NBN

I attended the ACS National IT Debate held at the National Press Conference. Senator Conroy was there as well as the Shadow Minister and a Greens Rep (who was surprisingly coherent). The debate mainly focused around the NBN. I'm still out on whether it's a good idea, though I'm not sure the Liberal policy is any good either. Here my thoughts so far:

  • There is no business plan for NBN Co! That's right, an organisation that is spending 43 billion dollars of your hard earned cash has no business plan on how they will spend it. Worse, the cost-benefit analysis has not been made public. It's not clear what uptake rate they need to achieve the break-even point
  • Given Labour's track record are we sure this is only going to cost $43 billion? Are you telling me that a government run 8 year project is not going to have a single delay or cost blow out. After 8 years, we could have a much heftier bill if the BER and Batt's policies are anything to go by.
  • The one question that both side's of politics couldn't answer is what will we do with all that bandwidth. There answer - 'If you build it they will come'. I understand that companies will find new and innovative ways to use all that bandwidth, but 43 billion dollars needs to have some kind of pre-determined benefit. If they said "We're putting teleconference capability in every school" or "We are building telecommuniting offices in regional and outer suburb areas" or something to that affect then we could determine if it's going to be worth it. But they haven't so we just have to *hope* someone uses all that bandwidth for something other than inventing the next Twitter.
  • Conroy likened the project to building the national highway system. It's an apt comparison as both costs lots of money and probably couldn't have been completed by private companies alone. However, the difference is that we had a clear idea of what people would use the highway for. Interstate commerce, reduction in rail usage, holidays etc. As I mentioned, we aren't that clear on what we will use the NBN for.
  • Conroy also couldn't stop talking about dishwashers. Supposedly in Holland they have these dish washers that can communicate with the local energy companies and determine which has the cheapest price and when and then finish that load of washing then. This he says is an example of what we could use the NBN for. I'm sorry, but if your dishwasher needs 100mbps to communicate with the energy company, then your software engineer should be shot (and told to stop using XML). It also fails to realise that this would also require the energy companies to provide an API to access this information and would also require legislative changes to allow me to change energy companies as needed. The NBN doesn't solve these problems at all.
  • What happens in 10 years when fibre is obsolete? I realise it's a scalable technology but eventually we are going to have to rip it up and replace it. Do we pay the bill again?
  • Is the Liberal policy better? Yes and no. It's not as expensive but doesn't give us the higher speeds. It simply allows competition to continue as normal in profitable areas (capital cities etc) and then grants to ensure the service is provided to everywhere else. It's a far more market-friendly policy and with the right regulation should provide a cheaper network. There will be areas (particularly in the bush) that don't get anything but ultimately that's always been the problem of national systems in Australia.

In the end, I can't work out which policy is better. They both have problems and it's tricky to determine which is best for the future of Australia. $43 billion is a lot of money to spend without a business case and without any clear idea of what we will use it for. What government services will be improved by this? eTax won't have a speed improvement (as it's all local) and even if they worked out how to make a safe web app the bandwidth requirements wouldn't be much more than the average ADSL connection. Let's face it, high bandwidth is only required for video. So whilst bittorrent may be a bit faster can't we just wait a few extra hours for a movie and save all this money and trouble?


Submitted by nemesis on Sat 21/08/2010 - 13:25

As much as it hurts me to say it, the best way to improve broadband speed and access would probably to have a functional separation in Telstra -- into Telstra Infrastructure/Wholesale and Telstra Retail.

At the moment, there's not much incentive for Telstra to do anything particularly innovative. Consider this: Telstra were to invest hundreds of millions of dollars in delivering Fibre to the Home in say, Gungahlin. It's not benefiting BigPond by doing this, since the residents there will likely just go and sign up with other ISP's like iiNet or TPG, who offer dirt-cheap broadband on everyone else's infrastructure. End result: Telstra gets nil return on investment.

In splitting Telstra, you're creating an incentive now for the Infrastructure/Wholesale arm to invest in different technologies, since the retailers/ISPs will eat it up.

Of course, as a Telstra shareholder, I never wrote this.