Sending the wrong NBN message

The current political debate on the NBN is mired in miscommunication and a misplaced focus on costs rather than the benefits of the network.

 With the NBN inching closer to reality it’s regrettable that our politicians seem unable to agree on some fundamental principles in relation to Australia’s telecommunications infrastructure.  These principles are:

  • optical fibre offers the ultimate in fixed line performance, and all other technologies converge on FTTP as they are pushed to their performance limits;
  • Australia needs a long-term vision and strategy for replacing as much of its fixed-line networks as practical with optical fibre – how we get there, when we get there, who does what can be the focal point of debates; Labour’s NBN initiative is one approach for delivering the end-result; we have yet to see a comprehensive Coalition plan;
  • some of Australia’s existing infrastructure (for example, where there are short copper loops or high-speed HFC networks) is quite capable of meeting needs well into the future with just modest upgrades;  these areas need not be a priority for fibre replacement;
  • fixed line connectivity will always carry the bulk of the traffic, but broadband wireless connectivity is become equally important, and for some Australians, is sufficient to meet all of their needs.

In the period between 2005 and 2007 both the coalition government and the Labor opposition (as they were at that time) were talking about an investment of around $5 billion in broadband networks for regional Australia. I supported both these initiatives. The details were different but on a high level they would deliver much needed network improvements.

At that stage I argued that our politicians should look at the social and economic benefits of the emerging digital economy and since then we have been talking about the trans-sector concept, which would facilitate e-health, e-education, smart energy and environmental services, etc.

Analysis of the requirements of such services shows that a robust network is required – one that has large capacity, low latency, high reliability and security; and one that protects privacy.

If Australia is to avoid limits on its telecommunications future this we should aspire to the best possible network, and that means fibre. There is no argument about this from any technology expert – all are in agreement. It is a universal given and as such is also accepted by organisations such as the OECD, UN, ITU, World Bank and so on. It would be helpful if Australian politicians would accept the simple physical aspects of the issue.

The world cannot be fibred-up overnight and in some of those international fora BuddeComm has taken the position that local circumstances – policies, economic and social environment, finances, geographic nature, and so on – will determine how each country develops its own plan for the broadbanding process. This is also precisely what the UN has indicated in its broadband targets.

The first thing that is needed is for each country to develop its own national broadband plan. If there is agreement on this internationally, why we can’t get a high-level agreement on it in Australia?

The GFC was that ‘opportunity knocks’ moment

Clearly ideas regarding the implementation process will differ in accordance with political perspective. As indicated we could have worked with the previous government’s $5 billion plan, but, with a Labor government in residence the flavour is different from that of the Liberal party. No surprises or problems there – the GFC offered the chance of stimulus investments in infrastructure and with a broadband infrastructure plan more or less ready to go these infrastructure investments became the spearhead of that stimulus policy.

It is not too difficult to see that many of the old systems we have in place are beginning to crack and crumble, and most leaders will agree that the future is pointing to continue growth of the digital economy that started changing our world more than a decade ago. And broadband is the infrastructure to support its continued evolution.

So  developing a bold national plan for improving broadband infrastructure makes sense.

The quality of broadband has been a discussion point for over a decade, and in the past there has been bipartisan support for the need for better quality infrastructure.

The issue of the social and economic benefits

However, I have consistently criticised the government for not better integrating the social and economic benefits of improved broadband into its legislation, and into the business plan of NBN Co. The Parliamentary Commission and the Productivity Commission have also directed criticism at the lack of clear economic and social policies and strategies.

On the positive side, the government has clearly articulated the importance of better broadband as important infrastructure in relation to healthcare, education, etc, and they see the NBN as a catalyst for the transformation of these sectors. So the government is certainly paying attention to those social and economic benefits. There is also clear evidence of this in subsequent policies relating to these sectors as well as in the investments made by the government in the various sectors of the digital economy.

In a roundabout way the opposition is also addressing this issue; however, so far they have not indicated that their vision includes the trans-sector approach to the digital economy.  As far as we know they have not yet signed up to the principle behind the idea of social and economic benefits. Without a high-level agreement on that principle any discussion on this topic becomes difficult, as apples are not being compared with other apples. We see this as national infrastructure but our interpretation is that the opposition still sees it as telecoms infrastructure.

I, personally, have been trying to have a discussion about this with the Opposition since 2007, but they have never agreed to a meeting. In the past I had been in regular contact with the previous Minister Helen Coonan, as well as with many others in the coalition (in particular National Party members).

FttH vs HFC and FttN

Moving now to the question of ‘how to skin the cat’, it makes sense to use existing good operational infrastructure such as HFC and FttN for as long as it makes economic sense. For at least the next five years most of what we want to achieve within the context of the digital economy and the trans-sector concept can be accomplished through these technologies– as indicated by the opposition.

This does need to be placed in the overall context that eventually these technologies will need to be upgraded to FttH, but there is certainly no rush to do so any time soon.

Where there is no HFC and no FttN, it does not make sense to first upgrade to FttN and to return later and upgrade to FttH. If there had been some communication between the opposition and the industry we believe that such a recognition might have become part of the original NBN plan.

Even at this stage it would not be too late for the government to acknowledge this; and we would not even be surprised if NBN Co bases its rollout on such a plan – ie, no rush in areas where HFC and FttN is in place. The fact that Telstra is investing heavily is a clear indication that this company is under the same impression.

Perhaps by making this clear we can rid ourselves of some of the political clamour.   

Paul Budde is the managing director of BuddeComm, an independent telecommunications research and consultancy company, which includes 45 national and international researchers in 15 countries.