I am very disappointed with the Minister for Communications.
Those who have followed my NBN analyses over the years will have seen, on one hand, my strong views on the need for good quality digital infrastructure – which I see as critical for Australia’s economic and social future – and, on the other, my respect for Malcolm Turnbull as a strong leader who regularly expresses a sound vision for the future of our country.
Because of this I have given him the benefit of the doubt in the hope that he would make the changes that would satisfy the political reality while at the same time working towards a sound outcome – one that would see Australia taking a lead position in building the infrastructure that will give the country the best opportunity to be a leader in the digital economy.
As I have reported before, most developed economies are now building fibre-to-the-premises (FttP) infrastructure and in particular other resource-rich countries have been – and still are – among the leaders in investing in FttP infrastructure, as a means of helping their countries to diversify their economies.
In my analyses of the NBN and the political changes in government I provide a range of suggestions for preserving the visionary elements of the original NBN plan, with options to satisfy the political reality that required change. On various occasions Malcolm Turnbull showed his clear understanding of the long-term need for fibre-to-the-premises; and his integrity, credibility and popularity also put him in a very strong position to build an NBN that would still be able to give Australia a broadband infrastructure at least equal to, or preferable better than, our trading partners, in order to give our country that competitive advantage.
Our suggestions included:
- Extending the build-out period, basically spreading the investment over more years.
- Maintaining ADSL2+ and HFC networks for a longer period of time.
- Opening up the greenfield market to competition, and
- Using VDSL for multi-dwelling units.
This could all be done without adjusting the end-goal of a national FttP network.
This would have done away with the need for the complex and far more risky and difficult to develop multi- technology mix (MTM). Instead, rather than the government forcing NBN Co to use the old copper network, it could have allowed them to continue with the FttP network in those areas where fibre upgrades made the most sense. As we see in countries such as Germany and Belgium, rolling out VDSL-based technologies over copper networks (which is similar to the major part of the Australian MTM) is easier said than done; and based on some early experiences in Europe, indications are that such a roll out will take longer, and cost more, than predicted by the vendors and incumbent telcos involved. The incumbents here don’t mind this as it simply prolongs the period where they can dominate the market. In Australia we see that the roll out the MTM is also strengthening Telstra’s position in the market.
You don’t roll out such networks every 5 or 10 years. This is a once-in-a-lifetime event. That being the case it should be done properly. What we are getting now will not last more than 5 to 10 years and then it will need another national overhaul. What a waste – particularly because we did have a perfect future-proof NBN plan in the first place, and the minister had a great opportunity to build on this and deliver it.
Rather than championing broadband infrastructure as President Obama is doing, our minister keeps talking down the need for a first-class 21st century broadband infrastructure. Initially I thought this related to political ideology, and for a long time I believed our minister stood above that. But looking at his actions I can only conclude that he, too, seems to be part of this partisan pettiness, and that he has not been able to look at the NBN from a national interest point of view.
Have you ever seen Mr Turnbull being passionate about the NBN and the economic and social opportunities it can deliver to our country? Compare that with the passionate speech of President Obama, or the fervour displayed by the previous Minister for Communications, or the former EC Commissioner for telecommunications and the digital economy Neelie Kroes.
One of the reasons the previous government embarked on the NBN back in the mid-00s was that, because of Telstra’s monopoly and its lack of interest in building high-speed broadband infrastructure at an affordable price, we were at that time around the 25th position on the international ladder signifying the quality of the provision of broadband. We accepted that embarking on the NBN wouldn’t see an immediate improvement – since it would take time to build an FttP network – but that in say 5-10 years’ time Australia would end up in the top 10 on that ladder.
Now, ten years later, because of all the politicking around the NBN we have dropped from the mid-20s to the mid-40s on that international ladder. And because of all of the delays it will get worse before it gets even a bit better. I am saying ‘a bit better’ because most of our trading partners have not been sitting still, and by the time we begin to catch up they will have moved on to more and more FttP quality networks. The international bar has been significantly raised since Australia embarked on the NBN, yet we still seem to look at the bar as it was set a decade ago.
So, with the current MTM we will remain permanently at the bottom of the list, as we will be stuck with a national infrastructure monopoly without any mandate or funding or investment plans to move beyond MTM.
In the meantime the USA is moving ahead with FttP networks in their cities. Interestingly, in that country this infrastructure is now deemed to be critical for healthcare, education and other services. Google has been so successful with its FttP network that it has announced four more rollouts.
Reports from a range of countries involved in FttP networks indicate that there are no single applications that require fibre, but that it is the total capacity that is needed as a utility in order to ensure the usefulness of the applications and services to the end-users. Within households multiple users are simultaneously using broadband more and more, and also simultaneously using a range of devices. FttP allows for good user experiences at these peak-hours. It is not that each of these users or apps requires a gigabit of capacity, but the overall performance of all of the activities can be much better guaranteed if there is sufficient capacity available.
While the jury is still out on mass market demand of 4K TV, at the Pacific Telecoms Conference in Hawaii earlier this month NHK already demonstrated the next level up; Super 8K HD TV. It received great reviews but requires a 90Mb/s channel for delivery. As we speak IPTV is taking Australia by storm, whatever way we look at it there is no doubt that every single year more capacity will be required, as the importance of this market, and its size in the number of (video-based) services and applications, continues to grow.
There is no way that the MTM network, as it will be rolled out in full earnest from yet another delayed starting date of 2016, will be able to handle the capacity needed in 5 to 10 years. By that time Mr Turnbull – as the Minister for Communications – will be gone and forgotten, but his legacy as the Minister for Lost Opportunities will remain.