1Gbps a 'marketing gimmick': Turnbull

1Gbps a 'marketing gimmick': Turnbull

Summary: Shadow Communications Minister Malcolm Turnbull has labelled recent announcements of 1Gbps fibre-to-the-home services as 'a marketing gimmick'.

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TOPICS: NBN
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Following Sony's announcement in Japan of 2 gigabit-per-second (Gbps) services and NBN Co's announcement on Friday that it plans to offer 1Gbps services by the end of this year, Shadow Communications Minister Malcolm Turnbull has said that 1Gbps services are just "marketing gimmicks".

Under the Coalition's AU$29.4 billion NBN fibre-to-the-node proposal, all residences would have access to at least 25Mbps speeds by 2016, and at least 50Mbps by 2019. Opposition leader Tony Abbott, in announcing the Coalition's policy earlier this month, said that 25Mbps was "more than enough" for the average Australian household.

Speaking on ABC radio in Newcastle on Friday, Turnbull said that download speeds in excess of 1Gbps were "useless" for residential customers.

"It's a marketing gimmick," he said.

He said that it was better to postpone spending money rolling out fibre to every premises if the applications requiring 1Gbps speeds weren't available yet.

"Let's assume that we can spend $900 on average to get a premises up to the most part [to] 50Mbps, but no-one less than 25Mbps, and we can do that now. And let's assume it's going to take us the best part of another $3,000 to get them up to 100Mbps and up to 1Gb with fibre to the premises, but let's assume that there's not going to be any demand for that very high speed in those residential areas for, say, 10 years," he said.

"I'm saying you would be better off postponing that investment, keeping that extra $3,000 in your pocket, earning a return on it somewhere else, or not having to borrow it; and then when the demand is there, making the investment then. It's just labour costs; labour costs will rise with the price of inflation, but so will everything else."

The issue of what residents can do with 1Gbps download speeds is something many countries and companies across the world are currently grappling with. In March, when Slate visited Kansas City, where Google has rolled out 1Gbps fibre services, the residents in that town couldn't explain how to fully utilise 1Gbps services.

Turnbull also rejected the analogy that is frequently cited in the national broadband network (NBN) debate, comparing the project to building the Sydney Harbour Bridge.

"But the big difference is, if you build a bridge, you cannot build a bridge with demand just 10 years ahead because you can't just keep adding lanes every 10 years. You've got to think ahead 30, 40, 50 years," he said.

"With a telecoms network, you've got the ability to build it for now and the foreseeable future, and you've got the ability to upgrade it progressively over time as demands change, and you don't really know what the demand's going to be, and above all as technologies develop.

"And so while postponing investment until it's needed may seem a bit hard-headed and sounding too much like a canny accountant than a visionary politician, it actually makes great sense, because if you postpone that investment until it's needed, the opportunity cost on the money that you haven't invested and that would have earned no return in that time, so you've got your investment in your pocket or doing something else. But also when you do come to invest, you're using the latest technology, and that's a powerful argument to take a more steady and businesslike approach to it."

On Friday, Turnbull said that should the cost to run fibre out to every premises be significantly lower than the AU$3,400 per-premise cost he has forecast, than many more premises in Australia could receive fibre to the home under a potential Coalition government.

Topic: NBN

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Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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42 comments
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  • Demand for it

    The reason there's no demand for it is that there aren't any services that make full use of it. The rhing is, there aren't any services using it because nobody has it. It's one of those "if you build it, they will come" situations.
    45yoyos
    • Please explain...

      Other than for businesses, schools, hospitals and universities, I can’t see anywhere on the web where building fiber networks has created these new services. It just seems like a big investment for a dream...

      The analogy of cars and bridges doesn’t properly work here as we have kept on increasing the speed of the cars crossing the bridge. The copper wire (the bridge) initially had data (cars) traveling at 300 bits / second. We now have data at 8,000,000 + bits /second. I am glad that when we had speeds at 300 bits /second we didn’t assume that that was it.
      sparky_l
      • Nice one.

        "We now have data at 8,000,000 + bits /second. I am glad that when we had speeds at 300 bits /second we didn’t assume that that was it."

        You proved his point for him ;o)
        Tinman_au
        • aaaaah no, good try

          Try again in context with the article above.
          sparky_l
        • Simple Physics

          That's now how electricity works. They are not speeding up the electrons to get higher throughput (analogous to driving cars faster), they just increased traffic on the copper before needing to add more lanes (spectrum).
          MrTalent
      • Bridges Require Maintenance

        Trouble is many of our neglected, rickety wooden bridges are now load limited to 1 tonne with just one lane & a speed limit down to walking pace.
        Turnbull wants to waste $30B patching them up for the next 10 years before replacement when we could have all new bridges now for $37B.

        Also, services require customers. Not much point in developing them when there's no means of delivery.
        grump3
        • "we could have all new bridges now for $37B"

          Another fine example of how the "rumours" being spread by the LNP media machine create a dumbing down of the subject...

          1. The money is not being SPENT by government or the taxpayer for any of the NBN.
          2. Bonds are being issued and paid back at 7% to fund the NBN...that is why it's not part of the budget. It's an investment not an expense...it's like buying shares in a company.

          Therefore, you can't "use" the money on something else, it doesn't exist as an asset.
          viditor
          • Correction

            Actually, a better analogy than shares is that the Government is issuing the NBNCo a credit card, and NBNCo pays back at 7% interest as well as builds something that is helping us all.
            viditor
  • 1Gbps a 'marketing gimmick': Turnbull

    first time i heard a sensible argument from a political bureaucrat. kudos to him for using his head at this moment in time! but, when we managed to de-construct everything including living beings and transmit them to be re-constructed at the receiving end, then we need maybe even more bandwidth (terabytes/sec or more perhaps?) so far, a 100 mb/s can support high definition tv which at this time is the only application that hogs bandwidth.
    kc63092@...
    • 100 ... but only 50 is on offer (and not until 2019 - aka never)

      mmm ... "so far, a 100 mb/s can support high definition tv".
      Suggest you go read any of the vendors specs on the proposed VDSL offering, especially over the 800m distance. The specification shows a it a match with ADSL for distances under 300m.

      But you expect "a 100 mb/s" ... even Mr Turnbull limits his promises to "50Mbps by 2019".
      Wait until you want to view more than the 1 movie within your house, or get a decent gaming session underway ... but who would want that?
      CallMeCynical
    • And I thought Turnbull might have a clue

      I am seriously disappointed with the extreme shortsightedness.
      For those who don't understand modern telecoms (and it appear there are many), the most necessary and important part of the NBN is the upload speed. That is what allows people to become active participants in the internet and not just passive or limited viewers of it.
      Real-time backups, HDTV communication (transmitting AND viewing), opening a flat-file database across the internet, interactive small business, etc...and that's just today!

      4k TVs have just hit the consumer marketplace...and while they are priced in the stratosphere for now, just like the plasma screens that went from $50,000 in price down to $1,000 in the period of 4-5 years it is expected that 4k will drop even faster.
      4k requires 40mb/s for optimal transmission.

      If we had the ability to change from FTTN to FTTP in a year or 2, I would not be so worried about the LNP plans. But it will take an additional 5-10 years for the change to happen, which means that the majority of Australians will once again badly fall behind the rest of the world in the ability to compete in the Global Economy.
      viditor
      • Streaming

        "4k requires 40mb/s for optimal transmission."

        You've been listening to Malcolm Turnbull too much. He's been telling everyone that you only need 5mbps to stream HD. However Channel Ten uses 7-8mbps just for their SD channel and around 12mbps for their HD channel. Blu-ray has a bit rate of 48mbps. Sure you can stream low quality HD in 5mbps but it will have so many mpeg artifacts that it wouldn't be watchable on a big screen TV. 4k will require about 4x that bandwidth so about 200mbps for blu-ray equivalent quality. Streaming of HD content in 5mbps is a bodge for current internet confections that cannot handle higher bit rates and should not be used as a reason for not requiring higher bandwidth connections.
        OxleyDave
        • "You've been listening to Malcolm Turnbull too much"

          In fact I work in 4k quite often..."viditor" stands for video editor.
          40mbps is optimal for a single 4k stream (though by no means is it the maximum).
          However that is just ONE stream and also doesn't allow for any other bandwidth requirements...
          It is true that high compression causes a lack of picture fidelity, and this will be especially apparent in 4k (trust me, it looks terrible in high compression).
          viditor
    • Seriously kc63092@

      Quite ironically... not so long ago (just months) when 12Mbps was the Coalition's pledge, those like you use to scoff at the NBN's 100Mbps, but look now *rolls eyes*
      RS-ef540
  • Mr "gimmick" Turnbull's complaining about gimmicks!

    Being a senior rep of the gimmick party, why is he complaining about gimmicks!
    Kevin Cobley
  • 1Gbps *IS* a gimmick right now.

    But naturally, the subtext of the announcement isn't addressed- that the Labor network future-proofs the country whereas a Coalition network does not. It also completely ignores the chicken/egg nature of having super high speed internet available for all. Build it, and the innovation will come. There won't be a 'need' for high speed internet if the market conditions (i.e. demand) isn't created. It continually amazes me that this point is ignored by the party that's supposed to be business friendly/savvy. Ultimately, this is the point of difference between the progressive NBN plan and the regressive one.

    Throw in some misinformation about the 'cost' of the NBN for good measure (which, as we've said many times, if off budget and therefore doesn't have an opportunity cost) and it's really just business as usual for Mal and the gang.
    RealismBias
  • Using a future proof technology is a gimmick?

    What is more of a gimmick is saying you are saving money by rolling out a technology that doesn't meet requirements even before is complete. Fibre is capable of way more the 1Gbps, is that a gimmck? Should they artificially limit fibre speed not to show what a dead end solution FTTN is?
    Pilfer-52cec
  • 1gbps a gimmick? Someone should tell those network card manufacturers. For some odd reason the slowest available is 1gbit.
    Hubert Cumberdale
    • Sorry - I cant see your point

      Hubert, surely you can do better than that? For that effort I give you 1/10.
      sparky_l
      • Only because you don't want to see it

        Current computers are all gigabit Ethernet (in fact my work PC is already connected to the network at 1Gbps, it's amazing the difference it made to day-to-day operations compared to 100).
        Tinman_au