tip off

Conroy’s blueprint for a digital economy … that doesn’t need an NBN

Oh here we go. The National Digital Economy Strategy (NDES) will position Australia as a “leading digital economy” by 2020, says communications minister Senator Stephen Conroy. His shadow Malcolm Turnbull calls it “Conroy’s Digital Economy Con”. Con. Conroy. Geddit? Twenty-first century politics, that is right there.

So, Mr Turnbull, I’ve repeated your framing. Mission accomplished. Can we all go home now?

The NDES launched by Conroy yesterday is two documents in one. First, it sets some goals. In 2020, Australia will be one of the top five OECD countries in eight specific metrics. Then there’s a bunch of supporting material that explains the benefits of broadband and shows how various government and industry initiatives would supposedly support these goals in what is really a promotional piece for the National Broadband Network.

The goals themselves are measurable, sensible — even rather modest, in my opinion.

The first goal, for example, is about the proportion of households that connect to broadband at home. Back in the early to mid-1990s, on the vaguely-similar-if-you-squint measures of average internet bandwidth and computing power per head, Australia was third in the world after the US and Finland. Then noted internet entrepreneur John Winston Howard took the reins and we dropped out of the top 10 entirely; out of the top 15 even. Returning to the top five some two decades later isn’t just sensible, it’s a matter of national self-respect.

Goal six, to pick another, is to double our level of teleworking to 12% of employees. That’d be easy to achieve if just a few big employers dropped their need to herd everyone into fluorescent-lit cubicles. Experience shows teleworkers are happier and more productive —  though the main challenges aren’t technical, but about training, occupational heath and safety and the social aspects of the workplace.

Other goals relate to activities already under way, such as e-health records, getting more government interaction happening online, and increasing bandwidth to schools, TAFEs and universities. A lot of it we’ve seen before. It’s almost motherhood stuff; hard to argue against. And indeed Turnbull concedes the Coalition “broadly supports the eight goals outlined”.

Australia, as The Economist pointed out last week, is one of the wealthiest nations on the planet. Aspiring to be top five in a few metrics should be far from controversial. Indeed, I don’t understand why we can’t even aspire to be Number One for a change, like we do in such vital economic and social metrics as … erm … cricket.

But, alas, the NDES is a political document, and at its heart is a political disconnect. Turnbull spotted it on day one. Now there’ll never be any discussion of the merits of the strategy’s goals because Turnbull can repeat one easy-to-understand message: taken individually, none of the goals specifically require a fibre-to-the-premises (FttP) network like the NBN. Pretty much everything listed, individually, requires less bandwidth than the NBN’s 100Mbps.

What the government still hasn’t articulated — at least in a way that cuts through the simpler-to-understand if sometimes disingenuous messages of the naysayers — is why, from all the potential approaches to fixing Australia’s lagging broadband infrastructure, a FttP network would be such a good long-term investment, and what new possibilities that opens up.

That in turn means Turnbull can repeat the words “expensive”, “risky”, “over-capitalised”, “anti-competitive” and the rest until our ears bleed.

And that, in turn, means there’s little chance of any discussion about the NBN moving beyond where it seems to be stuck. That other great internet entrepreneur, Anthony John Abbott, wins again.

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  • 1
    zut alors
    Posted Wednesday, 1 June 2011 at 4:27 pm | Permalink

    … noted internet entrepreneur John Winston Howard…’

    Thanks, Stilgherrian, that made my list for today’s Top Ten Laughs. It’s remarkable how the mere mention of his name lights me up…

  • 2
    Mr Pajama Pudding
    Posted Wednesday, 1 June 2011 at 4:33 pm | Permalink

    Any service which involves bi-directional video requires synchronous, contention-free, highly available connectivity. ADSL and Wireless cant do that.
    Fibre to the home also ensures everyone with fibre gets an equal service with equal performance. ADSL and Wireless cant do that either.

  • 3
    tinman_au
    Posted Wednesday, 1 June 2011 at 4:47 pm | Permalink

    Indeed, I don’t understand why we can’t even aspire to be Number One for a change”

    Like in finally having (again!) a decent national communications network? :o )

    The NBN as fibre is the best solution for large scale networks (which is why even “wireless” depends on it as a backbone), and Australia being such a large place will need it.

    Wireless _even now_ can’t handle the current load and will fall short by 300MHz by 2020 ( http://www.theaustralian.com.au/business/push-to-plug-the-gap-in-wireless-spectrum/story-e6frg8zx-1226049450443 ), and that’s without a “NBN as wireless” push like the Librals wanted.

    The copper PSTN network has been around since 1901 (though I believe the first exchange was even earlier in 1880), part of it are pretty old now, and the quality of the lines effect the maximum rate you can get from it (which is why we only rank 21st in broadband global ranking ( http://forums.whirlpool.net.au/archive/1557342). The PSTN was never designed with the internet in mind, the fact you can get “broadband” over it is kind of a “trick” which is also why you can’t be too far from an exchange (as in only a few kilometres) to get actual broadband speeds.

    Given the limitations of both those technologies, I think the government actually got this right, though from some of Mr Conroys other choices/ideas (like his retarded “Australia filter”), I think them picking fibre was probably just shear dumb luck.

  • 4
    Stuart Hamilton
    Posted Wednesday, 1 June 2011 at 7:47 pm | Permalink

    Just talking about education, a truly rich, interactive online learning experience available to Australians wherever they are does require high speed broadband using the sort of network to be delivered by the NBN, with upload as well as download speeds much greater than currently available . Then when you add all the other areas - particularly health services and better business productivity - the case becomes overwhelming. (Declaration of interest: I run a major online learning company. I have volunteered to the government to advocate the benefits of the NBN)

  • 5
    Greg Angelo
    Posted Wednesday, 1 June 2011 at 10:26 pm | Permalink

    The problem with the NBN is not the use of fibre optics which is the logical source of data transmission in any in network, it is the requirement for fibre to the home which has not been substantiated. Hybrid systems using wireless or existing cable networks the last kilometre or so are far more cost-effective but unfortunately due to the haste with which the government announced its proposals, as a consequence of its initial NBN tender failure, they have painted themselves into an expensive corner which does not allow any alternatives to be considered because of the political backlash. I currently have12MBS broadband using the Telstra coaxial cable network which I understand can carry at least 10 times that data speed without replacement. I am not opposed to having an optical fibre connection to my home, but for all intents and purposes I do not need it and nobody has justified the cost benefit of having such a facility to every home in the country.
    Aspiring to be number one is fine if you can afford it, but a more appropriate approach is what is the minimum amount necessary to be spent to generate acceptable level of service. The government should be able to demonstrate that its solution is the most cost-effective alternative and of course it cannot because it is politically wedded to the outcome of this chosen and is afraid

  • 6
    Greg Angelo
    Posted Wednesday, 1 June 2011 at 10:37 pm | Permalink

    Moderator This post was accidentally transmitted before completion. This is the full text.

    The problem with the NBN is not the use of fibre optics which is the logical source of backhaul data transmission in any in network, it is the requirement for fibre to the home which has not been substantiated. Hybrid systems using wireless or existing cable networks for the last kilometre or so are far more cost-effective but unfortunately due to the haste with which the government announced its proposals, as a consequence of its initial NBN tender failure, they have painted themselves into an expensive corner which does not allow any alternatives to be considered because of the political backlash.

    I currently have12MBS broadband using the Telstra coaxial cable network which I understand can carry at least 10 times that data speed without replacement. I am not opposed to having an optical fibre connection to my home, but for all intents and purposes I do not need it and nobody has justified the cost benefit of having such a facility to every home in the country with a complete replacement of existing telecommunications infrastructure, a significant proportion of which could be effectively used for many years in the future

    Aspiring to be number one is fine if you can afford it, but a more appropriate approach is what is the minimum amount necessary to be spent to generate acceptable level of service. There is an opportunity cost of overinvestment in one area of the economy and that is underinvestment in other areas of the economy such as health education and welfare.

    The government should be able to demonstrate that its solution is the most cost-effective alternative and of course it cannot because it is politically wedded to the outcome it has chosen and it is afraid to place the alternatives in an appropriate cost benefit analysis structure for fear that a more cost-effective solution could be generated, as is currently being advocated by the Opposition.

    Furthermore the government’s decision to exempt the whole NBN Co , arguably the biggest infrastructure investment project in the country from the requirements of the Freedom of Information Act would indicate that they have a lot to hide.

    It has become increasingly obvious at the NBN’s priorities in terms of rollout has more to do with pork-barrelling and political advantage than logical economic development. I suspect that in decades to come analysts will look back on this project and wonder how the country managed to get itself involved in such expensive solution when there were cheaper equivalent alternatives available making use of existing infrastructure. Paying Telstra over $10 billion to destroy its existing network is not good economics.

    Furthermore placeing the whole Australian telecommunications infrastructure under the control of one Minister with the ability to filter data and block access is a very dangerous step. Just consider the possibilities of Kevin Andrews as Minister for Broadband and how much democratic freedom would be left in the system.

  • 7
    Posted Thursday, 2 June 2011 at 10:35 am | Permalink

    @Greg Angelo: You’ll get no argument from me about the lack of transparency in spinning out the NBN to a separate NBN Co. However your information is out of date. In February The Greens negotiated the government into declaring NBN Co prescribed authority under the Freedom of Information Act. FoI rules now apply.

    You’ve asserted that hybrid fibre-then-wireless or fibre-then-coax networks are “far more cost-effective”. I’d counter that they’re “cheaper”, but they have nothing like the same capability. There are two important factors for me.

    One, those hybrid systems will eventually — and, I contend, quite soon — top out at maximum download speeds of a few hundred Mbps. Fibre can just keep ramping up the speeds to gigabits and terabits per second.

    Two, they have quite dreadful upload speeds when compared with fibre. The hybrid systems entrench the idea that most locations are passive consumers of “stuff on the internet” that other people make, whereas fibre provides more symmetrical bandwidth such that everyone is as much a producer as a consumer. If the future is about multi-point video, as many seem to think, the hybrid approach wouldn’t cut it.

    It comes down to whether it’s better to spend more up front to create the longer-lasting network, versus spending less now but having to do another significant upgrade in a just few years. We’re trying to catch up after a decade and a half of neglect, and I certainly don’t have a problem with spending more to catch up.

    I do have trouble understanding why, when we’re one of the richest nations on Earth, the framing is about only needing to build something “adequate” and “if we can afford it”. We can afford it. We’re filthy rich by world standards, and the entire expenditure on the NBN across the years that the project rolls out is equivalent to less than half a percent of tax revenue.

    The scare-stick of Kevin Andrews is a nice distraction from the argument, but don’t we already have telecommunications handled by one minister?

  • 8
    Mr Pajama Pudding
    Posted Thursday, 2 June 2011 at 7:04 pm | Permalink

    The point about synchronous speeds is the the single biggest factor which constantly eludes all those who carry on about “waste” or cost. I think this is because most people simply lack understanding of how the internet functions, resulting in an inability to comprehend the need for synchronous, contention free, noise free, interference free data pipes _to the home_ for delivery of high bandwidth services.
    It’s very difficult for most people to understand what is meant by “upload speed” compared to “download speed”. As far as most are concerned, it’s ALL download, like a TV receiving TV shows. But that’s not how the internet works. In my experience, many are unwilling to learn about this, no matter how patiently you try to explain - they have already made up their mind based on whatever populist rhetoric they last heard that sounded good at the time.
    The people who really do get this are usually those at the pointy end of providing WANs and services over the internet where ADSL or wireless is the only option, like Stuart Hamilton who commented above….

  • 9
    tinman_au
    Posted Saturday, 4 June 2011 at 12:09 pm | Permalink

    ADSL and Cable both suffer from issues relating to upload speeds.

    Bigponds 100 Mbps plan for example, only allows an upload speed of 2Mbps (and is limited to certain areas of Sydney and Melbourne). To put that into terms of usage, you can download a movie from the Bigpond Movies website in seconds on 100 Mbps, but you can’t run a website on 2Mbps (you can, but only if you expect one or two users at a time, hardly the basis for a “digital economy”).

    ADSL will never get anywhere close to fibre, or even close to wireless. I live 3.5 Km from my exchange, and the maximum download speed I could expect to get from ADSL2+ would be 2.5Mbps. Better than dialup, but not good enough for anything serious like running a business.

    As to what the benefits of the speed/bandwidth of fibre are, the biggest plus to the fibre plan, and Australia as a nation IMHO, is that people will have the opportunity to host and run their own internet business from home. If they do we’ll at it, then the NBN would have exactly achieved one of it’s biggest objectives and we may not necessarily be reliant on just mining to balance our books.

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