Today saw the unveiling of the Government’s response to the NBN tenders submitted by what seemed like everyone in Australia — except, paradoxically, Telstra, the company with the most at stake. While Tasmania’s tender apparently passed the sniff test, everything else missed the mark so completely that the Government has chosen to go it alone, opting to create a new monopoly, a 21st-century broadband behemoth promising fast access for all Australians.

Before we get into the political and economic ramifications of a further concentration of the Australian economy — a national debate we’re sure to enjoy for some months to come — let’s consider the Government’s proposal at face value. For 90% of Australian homes, that is, city-dwellers and those in regional centres, the government promises “Fibre-to-the-home”, or FTTH, the holy grail of communications technology. FTTH abandons the copper wiring used for DSL and ADSL — and its associated speed limitations — for the nearly limitless speeds available with fibre optic cabling and modulated beams of light.

Which is what makes the Government’s self-tender so strange. Although FTTH could theoretically connect Australian homes at unheard-of speeds — many tens of billions of bits per second (for comparison, a DVD contains about fifty billion bits), the Government is only promising a hundred million bits per second. Which sounds fast, but this is already bog-standard in Japan, Korea and Scandinavia. OECD estimates predict average household demand to be “around 50 Mbit/s downstream and 10-50 Mbit/s upstream for the period 2010-2020”.

Rather than leapfrogging the OECD, Australia will simply strand itself in the middle of the pack. Given it will take up to eight years to roll out the NBN, it’s likely that by the time the majority of us are enjoying our 100 Mbps speeds, much of the world will have moved on into the gigabit (1,000 Mbps) range.

This isn’t a fatal error in the Government’s proposal for the NBN. FTTH can be easily cranked up to higher speeds (though it will cost money for new equipment, both for the carrier and in the home). Yet it does demonstrate a certain short-sightedness and a lack of vision. Instead of inspiring Australia and the world with a truly world-class next-generation broadband network, the Government promises to dish up only what our trading partners have already got.

Conroy may be keeping an eye on OECD statistics, but those statistics never, ever take into account the sudden bursts of innovation that parallel developments in technology. Broadband was a solution without a problem before Napster came along; suddenly everyone needed a megabit or more to share music. Very high speed broadband will present similar opportunities — opportunities that the Government seems perfectly content to let slip by.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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