The NBN's Asian imperative

When politicians add up the benefits of the NBN, they should also consider our Asian neighbours and their thirst for knowledge and growth. By 2020 Asian connectedness could be a major driver of GDP.

The Federal Opposition’s position on the NBN is well known: it’s frequently the subject of door-stops by Opposition leader, Tony Abbott, and more lengthy and considered statements by Malcolm Turnbull.  

Joe Hockey’s recent comments that the national broadband network was Australia’s biggest off-budget expenditure takes a more nuanced position, but he refuses to see cost of the NBN as an investment in infrastructure.

The opposition would do well to pay attention to broadband issues outside the limited horizons of Canberra politics.  Many countries see broadband communication infrastructure as an asset not an expense, an investment for future prosperity.

South Korea and Singapore are societies and economies that are being connected to broadband in the way they were connected to telephone in the 1960s and ’70s.  Singapore plans to have a 100 Mbps service to every household by 2015, and Korea is not far behind, and both use fibre optic cabling.

And broadband connectivity is not far behind in much of Asia.  Those countries we somewhat condescendingly refer to as 'third world' countries are not being left behind in the way those who foresaw a permanent digital divide may have feared.

At the CommunicAsia2011 Conference in Singapore last June, British telecoms analyst Oliver Johnson of Point-Topic, presented a paper that detailed ‘the factors that could see fixed broadband household penetration in markets such as China, the Philippines and Vietnam surge past the 50 per cent mark by 2020’.  That is much the same time as the NBN is expected to be operational Australia-wide, if future governments on either side of politics remain committed to it.

Key factors shaping growth in a national broadband market, Johnson says, are gross national income, the growth of urban populations, national regulatory environments and the spending plans and policies of governments in the region.  The continued growth of China and India would have a flow-on effect throughout the region.

Johnson told Technology Spectator that: "In theory the figure of fifty per cent was for all Asian households, with the urban penetration much higher in most markets". 

He says that given the urbanisation of much of Asia, often over fifty percent, and in some cases as much as eighty percent or ninety per cent, the roll-out of fixed line services will reach one in two Asian homes by 2020.

Essentially the challenges are not so much how to deliver ever-faster broadband services in urban areas, but how to provide services across entire nations, Johnson says.  In these circumstances, he sees a mix of technologies would be needed to respond to local needs.  Wireless technologies riding on 3G, and then 4G mobile telephone facilities with satellite or fixed line back-haul from local concentrators hold significant promise ahead of the fixed line roll-out to the home, he says.

These 3G and 4G solutions would only approach wired broadband speeds if the cell sizes were kept down because the more users of the service, the slower it runs.  According to Johnson: "While it’s a good solution to get people access to the internet and some of the applications enabled by broadband, in a perfect world you would want to give them higher speeds than 3G or even 4G can offer".

Johnson also sees a continuing role for ADSL technology on existing and planned copper networks in Asia, linking concentrators set at the limit of range for high speed ADSL to hubs and using microwave solutions, WiMax or other forms of wireless solutions to extend the range of the ADSL lines, building out from population centres.

But there is the question of who pays for the roll out, especially in countries where the average income is measured in dollars a day for many citizens. 

Some inspiration can be taken from the UK experience where the initial broadband roll out lifted the nations gross domestic product by 2 per cent, increasing the tax base, and making more people more productive.  In fact, Johnson says if that 2 per cent increase had been taken and used to ‘fibre-up’ the UK, it would have paid for the roll out, and any further increase in GDP would have been free.

However, the less mature industrial economies of Asia present differences, especially a difference of priorities. But, according to Johnson if you want to increase your revenues as a government, giving your people access to broadband is a very good way of doing it.

He sees broadband development as a joint private-public sector project.  The private sector develops profitable markets in denser urban regions, and governments support the extension of services to new geographies.  "Some markets are at risk of being left behind and will need some central intervention to avoid that outcome," Johnson says.

But the problem of cost remains for many Asian countries.  Broadband connections yield benefits: a boost in the GDP, health, education and entertainment, but the front-end cost of wiring the nation before the benefits can flow is huge.  So where does the initial injection of capital come from?  Johnson has no particular answer, but says the countries that find the money will benefit a long way into the future.

Something is possible for Australia.  The planning and implementation experience we are gathering in the NBN roll out has export potential, comparable with the engineering experience of last century’s great infrastructure project, the Snowy Mountains hydro-electric scheme.

So when politicians add up the benefits of the NBN, let’s consider, too, the knowledge we can sell, or perhaps give to our Asian neighbours, to help them cross the digital divide.

That way Mr Hockey’s $36 billion can be discounted by the contribution to overseas aid.

Dr Vincent O'Donnell is the media policy editor at Screen Hub and an executive producer at Arts Alive. 

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