COMMENT:What the Coalition has rolled out as an alternative broadband policy for Australia is a bet on the safe affordable side as opposed to the high risk, high cost proposal being proposed by Labor’s Communications Minister, Stephen Conroy.
Fast broadband is a necessity, however super fast broadband is not a necessity for a lot of Australians as a recent SmartHouse survey revealed. Under Conroy’s National Broadband plan the Federal Labor Government was quite happy to spend a record $43 billion dollars on the roll out of a fibre broadband network and that was without any cost overruns or budget blow-outs.
What the Coalition is proposing is a $6.3 billion dollar plan that will deliver broadband speeds of 100Mb per second to 97 per cent of Australians.
Opinions are mixed on the Coalition proposal. Ovum Australia research director, David Kennedy, said the Coalition plan was “quite good bang for the buck”.
“On the face of it, it looks like value for money … if you’re excited about value for money then you should be excited about this,” Mr Kennedy said.
Telecommunications analyst, Paul Budde, said although the Coalition’s broadband policy was not a total failure; it ran the risk of severely damaging the competitive promises outlined in the NBN plan.
“It’s not a total NBN kill because there is still a strong emphasis on regional and rural needs, so in that respect it’s not a major difference to the government’s plan,” Mr Budde said.
A recent SmartHouse survey revealed that 89 per cent of those surveyed said that they had no problems with the current speed of their broadband connection. 46 per cent said that they downloaded video content on a regular basis.
Of the 89 per cent who said that they were content with their broadband speeds, 86 per cent said that they used broadband to surf the web access sites like YouTube, send emails while using applications like Microsoft Office.
As expected, Communications Minister Stephen Conroy described the Coalition’s broadband plan as a “second-class” broadband policy that will leave Australia in the “digital dark ages”.
The difference between what Conroy is proposing and what the Coalition is putting forward as an alternative is a whopping $36 Billion dollars. This is a lot of road works, hospital beds and capital for much needed infrastructure.
Australia has only 22 million people and six million households but unfortunately we have a massive country to cover when it comes to rolling out a fibre network. What the Coalition is proposing is that private enterprise wears the cost of rolling out a network.
In fibre broadband developed countries, like Japan and Korea, the uptake of fast fibre broadband has still not passed 38 per cent.
Under the Coalition plan, 97 per cent of homes would have access to networks which would deliver broadband at speeds of between 12 Mega bits per second (Mbps) and 100Mbps by 2016 through a combination of technologies.
Under Conroy’s plan, the Federal Labor Government is looking for an uptake from over 50 per cent of Australians at a cost of over $65 a month in an effort to start recovering the cost of the network.
If you want services like IPTV or entertainment content, it could cost as high as $85 to $100 a month. You would also have to pay for access to the content with this adding an additional $50 a month. If you are a Foxtel customer this could run up to $100 a month.
When it comes to critical mass, Australia is a very small country and to outlay a massive $43 Billion on a broadband network is a massive risk and one that could cost Australians a lot of money for decades to come .
On the other hand competition among private companies will drive the roll out of fast broadband networks. It will also deliver competition which, over time, drives prices down, not up.
By incentivising private companies, the high risk associated with the Conroy NBN plan is minimised.
During a recent trip overseas, I was shown both wireless and fibre networks running at speeds up to and over 100Mbps and as more people move to 3G networks with their iPads, netbooks and notebooks I suspect that a lot of people are going to be satisfied with 100Mbps delivered via a wireless network.
At a commercial level many organisations in manufacturing, medical and media markets are going to need speeds in excess of 100Mbps especially in the health market where remote analyses and the transfer of video is essential.
Conroy said of the Coalition plan that it “will deny 1,000 towns across Australia access to fibre technology – the gold standard broadband network”.
While many people aspire to own a Ferrari or a high end luxury car, the reality is that you only get access to these sorts of goodies if you can afford it or are in a position to fund such a luxury. Broadband is a bit like this.
Opposition communications spokesman, Tony Smith, defended the Coalition’s plan in a communications debate at the National Press Club earlier today.
He says Labor is spending too much on its broadband network. “We will deliver better broadband in a responsible, affordable way that delivers direct government intervention where necessary, modest investment where appropriate [and] importantly in ways that drives competition,” he said.
“Our plan would deliver quick improvements for those who get an inadequate service today.
“In delivering an economic framework that encourages rather than stifles ICT (information and computer technologies) industry, we’ll continue to foster innovation, research and collaboration.”
Mr Smith says the Coalition’s plan favours a mix of fibre optic and fixed wireless technology.
“Together these components will ensure that 97 per cent of the population has a baseline minimum 12Mbps service peak speed. Of course many will have higher speeds,” he said.
Right now I suspect that several carriers are running the ruler over how much capital investment they will have to outlay in an effort to compete in a 100Mbs broadband environment under a Coalition led Government.
Telstra who ran the numbers last year as part of their backup plan, in the event that no deal was struck with the Federal Government and the NBN Co is in a box seat to deliver a fast 100Mbs broadband service.
On the other hand Optus who are a Singapore owned Company are still looking for Government handouts in an effort to roll out their offering.
The battle-ground could be Telstra Exchanges where much of the new broadband gear will be housed. This is a contentious environment that has to be regulated by the ACCC in an effort to deliver a fair and balanced environment.
At the end of the day it is competition and the desire to earn profits from an environment hungry for broadband that will result in all Australians getting fast broadband at an affordable cost.
$43 Billion was the cost put on the table by a Labour Federal Government. There were no safeguards against multimillion blowouts nor were there any companies sticking their hands up to be an investor in what could have been a massive loss making vehicle, a lot like the toll roads around Australia are today.