Maximising the NBN outcome during the 100 day review

Congratulation to the Coalition, it was as expected a convincing election win. We now have 100 days to maximise the outcome of the NBN. We sincerely hope that the new government will now put politics aside and does a proper technical review in order to properly investigate of what make sense and what doesn’t. This should now be taken out of the hands of politicians and handed over to engineers. While during the election campaign the Coalition argued for a FttN solution and for that purposed used information from other parts of the world to show that this is a valid option. I hope that they in the national interest now also will have a look at all of the other experts advising against FttN and that they now also take into account that VDSL vectoring is still a bleeding edge technology with large scale roll out delayed till at least 2014.  Again only just before the election further evidence has been presented that the FttH option remains the best solution for Australia.

The Government will also have to take into account that their election win was not a vote against the NBN as we have been rolling it out thus far; 70% of Australians are in favour of the FttH solution. As became clear just days before the election in relation to the filter issue, the government will certainly have a fight on its hand if it is going to ignore the will of the people here. The pro-NBN lobby has a very powerful and vocal following. Furthermore the industry has also made it very clear that no changes should be made to the position of Telstra. I am sure that also the ACCC will have some very strong views on this. Let us hope that the government does the most sensible thing and keep the current policies and regulations in place; starting to temper with them will lead to a very destructive process and will set us back many years.

As we have mentioned before it will be critical to set the right parameters for any such review.  It is well-known that whatever result may be desired can be achieved by the formulation of the scope of such a review. The outcome totally depends on what questions are asked and what questions are not included; if politically motivated the scope can be used to get whatever outcome you want.

The lack of a real vision of what is required of the NBN has been one of the reasons we have had such a politically-focused and confusing debate. On the one hand we have experts saying that FttH is the most cost-effective way to proceed while, on the other, there are those who advocate the longevity of copper and HFC infrastructure.

Below is a list of the review parameters as we published them before the elections:

  • The review should be independent and not motivated by political persuasion; it should be based on what is best for the country.
  • It should certainly not be just another telecoms review; it should take national infrastructure as its starting point, not just telecommunications.
  • The review should therefore not be dominated by submissions or lobbying from telcos and ISPs – all other sectors of the economy need to be properly represented and taken into account as well.
  • A key issue for the Australian economy is that its productivity has been slipping over the last five years. We cannot afford this. The review should indicate where the NBN can assist in increasing national productivity and international competitiveness (digital productivity).
  • The need for the NBN should be clearly expressed. Is it simply for access to high-speed entertainment, or are we talking about the ICT infrastructure for a modern digital economy? We at BuddeComm would like to see the review looking at infrastructure elements such as capacity, reliability, low latency, ubiquity, robustness and affordability.
  • From an infrastructure perspective it should be recognised that the NBN needs to support cloud computing, data centres, M2M, massive use of smartphones and tablets over in-house WiFi networks connected to the fixed network – in other words, not just consumers using high-speed internet. This should be seen as a national economy project, and the review should therefore not simply be a discussion about what speed is needed for consumers to access internet entertainment.
  • Massive ICT investments have been made by both the industry and the government (cloud computing, data centres, WiFi, apps, big data, analytics) and infrastructure planning needs to take into account what impact these developments will have on infrastructure. The review also needs to consider whether the NBN can actually facilitate these new technologies and applications, not only in the present day but over the next 5-10 years and beyond.
  • At the same time it should address the demand side and clearly state what we expect in relation to requirements such as healthcare, smart grids, education, e-business, etc. What social and economic benefits do we want to achieve, and what is needed at an infrastructure level to achieve those benefits?
  • In relation to the much-debated subject of cost, the review should look at the cost of infrastructure based on the entire lifetime of the infrastructure, say 25 years; fibre, copper and HFC alternatives need to be analysed in terms of long-term investment as well as on their ongoing maintenance costs.
  • If intermediate steps such as FttN are suggested the review should clearly indicate how the step to full FttH will be made. It would be disastrous if we were to become involved in another political debate in five years’ time to move the infrastructure from FttN to FttH. With the current bipartisan political support we have a once-in-a-lifetime chance, so let’s get this review right.
  • While costs are important the overall economic and social issues are far more so. Australia is standing at the edge of a fiscal cliff in relation to the costs of healthcare and our businesses are facing significant competition from overseas companies embracing the digital economy. We might be able to save $10 billion over a ten-year period by building a cheaper NBN, but that could mean losing the hundreds of billions of dollars that could be saved through digital productivity gains. Even if the cost of doing it right the first time is higher than the ‘cheaper solution’, does that cost difference make it a good reason to take the second-best course?

We at BuddeComm strongly believe that we cannot reasonably afford the reality of rising costs in healthcare, aged care, and smart grids (energy). Many businesses who fail to move towards the digital economy will not survive, but the winners are all investing massively in ICT, cloud computing, data centres, WiFi, apps, big data and analytics.  We would like Australia to get the best possible infrastructure for those new developments, We challenge the government to be bold in its review and do it right. The Prime Minister has indicated he wants to be seen as the builder of infrastructure, I hope that this is not just trains, ships and roads but critically also the infrastructure for the digital economy.

It would be a pity if a politically motivated beat-up of cost blow-outs of the NBN was used to deliver a second-rate infrastructure, simply because the review was exploited to prove those potential cost blows-outs. It would not be difficult to establish the negative viewpoint by using certain parameters and asking, or not asking, certain questions.

Such a review would not be in the national interest. As mentioned, it should be independent and positive, based on a visionary projection of where our economy and society is heading and how the NBN can best support these unstoppable economic and social developments. It should not set short-term gains as a priority if, in 3-5 years’ time, these gains are going to lead to major economic obstacles to moving the digital economy forward to an inevitable FttH future.

Let us hope that the review will be based on vision and good sense, and not on political motivations. If we get this right then BuddeComm is convinced that the outcomes will be very positive for the future of Australia.

Paul Budde

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