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COMMENT: The Labour Federal Government’s idea of a $43 Billion dollar fibre optic broadband network is already running into problems with one Internet Service Provider AAPT claiming that it could cost householders who use it up to $200 a month.

On top of the base access fee those who want access to movies, music and other online content such as a live IPTV subscription or access to first run movies will have to pay more because a great many content providers have held back offering their services in Australia because of the lack of a fast broadband service.

While the Government is claiming that the new network will be 100 times faster than what is currently available, what they are not telling business or consumers is that within the 8 year build timetable companies like Cisco will be delivering Wireless broadband capability that will be equally as fast if not faster.

This technology will allow users to access fast broadband both inside and outside a building eliminating the need for the laying of fibre optic cable to every home or business in Australia.

Paul Broad, chief executive of Australia’s third largest Telco, AAPT, is convinced broadband bills will rocket to at least $200 a month under the Government’s plan and says consumers simply won’t pay.

Also telling the Federal Government that their plan is not viable under the auspices of a Government owned company is Malcolm Turnbull the leader of the opposition. Leaving politics aside, Turnbull does have a decent pedigree when it comes to broadband and Internet issues.

 

Back in 1995 Turnbull was an original Investor and board member in OzEmail one of Australia’s first ISP’s which was sold in 2003 to WorldCom netting Turnbull a profit of $59 Million dollars . He and people like Sean Howard who were the early pioneers in delivering both dial up and broadband connectivity in Australia were way ahead in understanding where the Internet and the networking of the Internet was set to go.

While Australia has a poor reputation in the mass broadband market, it does have  an excellent reputation in the Wireless broadband market with the Telstra NextG network which is now capable of speeds up to 21Mbs. This network is now being described as the best wireless mobile network in the world by overseas carriers who are currently trying to roll out their own 3G networks.

While 3G Wireless technology is fairly new, it is growing in popularity around the world for the simple reason that you don’t need costly fibre optic cable to access the fast speeds it is capable of delivering. One can also build it into devices which several notebook vendors such as Toshiba, Fujitsu and Acer are currently doing.

By Christmas, Telstra are confident that they will be able to deliver 100MBs over a wireless network and have already allocated $300M in capital expenditure to achieve this, along with fast speeds to their existing fibre optic network – which is already laid in the streets of several capital Cities.

Wireless is a critically important Internet technology moving forward and later this year we will see a new generation of flat panel TV’s being sold that will be HD wireless enabled this will allow content to be streamed to and from these display screens  without the use of wires. Companies like Sony and Panasonic have already demonstrated this technology at the recent CES show in Las Vegas.

The big danger for the Federal Government is that the technology they are proposing is very expensive for a country of only 21 Million people and 7Million households. While it would work in a country the size of the UK which has over 50M nationals to tap into and is a country that fits into Victoria several times over making the laying of the cable cheaper it also allows the operators to access an audience over 4 times larger than Australia.

 

At the end of the day we do need a new broadband network however we do not need the likes of Ken Henry the head of Treasury who is urging the Federal Government to spend $53B on a new network telling us to put ourselves into hoc to the tune of $43B for the sake of speed over a broadband network.

Henry, with respect, would not have a clue about what new broadband technology is coming or that superfast wireless is a significantly cheaper option going forward.

As a footnote, I am sitting on a balcony in Thredbo writing this story with full access to Telstra’s NextG network. The speed is excellent for what I want and what all Australians have to be careful of is that we are not being sucked into a political pipedream that will result in expenditure on health, education and commerce being slashed to pay for a broadband white elephant.

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