Do rural Aussies deserve a less-capable NBN?

Do rural Aussies deserve a less-capable NBN?

Summary: Do rural Australians really want, expect, and deserve less from their broadband than those of us in the cities? Some private-sector telco execs seem to think so. But, of course they would.

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TOPICS: NBN, Telcos
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I do not live in a rural area — but if I did, I would be horribly worried by comments like those made by CEO of telco Vocus Communications, who believes that rural residents simply don't want or need city-grade broadband.

They'll both get the job done, eventually — but does that mean a horse is good enough for everyone?
(Modern John Deere Tractor image by Elcajonfarms, CC BY-SA 3.0; Farmer plowing in Fahrenwalde, Mecklenburg-Vorpommern, Germany image by Ralf Roletschek, CC BY-SA 3.0)

"The customer in the bush requires something very different, to someone in a mid-sized town, to someone in a CBD," CEO James Spenceley reportedly said.

"They also have varying amounts as to how much they're willing to pay. I think that's the biggest folly ... of Senator Conroy's is not looking at technology for the right application."

That's a line straight out of the Coalition playbook; but coming from a commercial telecoms provider, it has entirely different implications.

After all, I and others have long argued that the most important purpose of the National Broadband Network (NBN) is not so much the speeds it will deliver, but the fact that it will provide a completely open infrastructure, with the same performance and service characteristics whether you're in Kings Cross or Karratha — and it will do so free from the interference and control of Telstra, which long ago proved that it couldn't be trusted.

This is a far more important goal than debating matters of FttN versus FttP, which is what Malcolm Turnbull has made this whole debate about. And if Telstra's copper network were to be given at no cost to NBN Co to be merged with its FttP infrastructure — rather than carrying a price tag so high that Turnbull dares not speak its name — it might be a different discussion.

But Turnbull's debate is financial and political. Companies like Vocus must focus on doing what they can with what's available — and Vocus has, for years, built its services around laying fibre in the cities and delivering wholesale DSL products over iiNet, Telstra, and Optus DSLAM networks.

Are rural residents really reluctant to spend as much on broadband as their city counterparts? Are they really not as equally interested in running their businesses more efficiently by using online services? Or are they simply corn-bred hicks that don't know their ADSL from their ARSL, so to speak?

That's why Spenceley's statements are so surprising: while it's nothing new to suggest that FttN is better for rural residents, Turnbull tends to base his claims on technological reasons, rather than suggesting, as Spenceley does, that the rural market is simply .... different.

I ask you: are rural residents really reluctant to spend as much on broadband as their city counterparts?

Are they really not as equally interested in running their businesses more efficiently by using online services, or by communicating better with suppliers and customers in capital cities and overseas?

Do they not want access to IPTV services, remote healthcare and specialist diagnosis, usable videoconferencing, online education, and web-based applications that work properly?

Or are they simply corn-bred hicks that don't know their ADSL from their ARSL, so to speak?

I don't think that's what Spenceley was trying to say — but if it was, he would be dead wrong.

Indeed, many of the NBN's applications are even better-suited for rural homeowners and businesses than those in the cities. They are, after all, the only way for rural residents to access many city-grade information services.

They're designed to improve access to urban medical specialists, whose availability is severely restricted in rural areas (and I mean severely — many rural areas only get fly-in specialists visiting on just the one day per year).

Healthcare. Education. Entertainment. Social contact. Business opportunities. Are we really to believe that rural Australians are really not interested in these things, and the many others that the NBN will deliver, usually, for the first time?

When all you have is a hammer, everything looks like a nail. But Vocus' goals — like those of so many of the other private-sector players that Malcolm Turnbull blindly believes will magically fix Australian telecoms – are at cross purposes with the broader objectives of Labor's NBN. Vocus, like any other private company, will go where the money is.

To suggest that rural residents don't need these services, is horribly short-sighted.

To suggest they won't or can't pay for them, is prejudiced and wrong.

To suggest they don't have the technological sophistication to understand why it's better to wait a few years for a 100Mbps fibre service, than a 5Mbps wireless service, is downright insulting.

Doubly so, because rural residents can already get 5Mbps wireless services. Even NBN Co will happily point rural residents to its Interim Satellite Service, which is rated at 6Mbps and is already in use by tens of thousands of customers. By 2015, when NBN Co flies its Ka-band satellites, they'll be getting 12Mbps and decent upload speeds.

The choice Spenceley is offering the bush, therefore, is no choice at all. Like anything you would expect to hear from a private-sector operator, it is motivated by an infrastructure provider whose self-interest leads it to criticise any NBN that will challenge its own business model (at least, until it starts reselling NBN services).

As they say, when all you have is a hammer, everything looks like a nail. But Vocus' goals — like those of so many of the other private-sector players that Malcolm Turnbull blindly believes will magically fix Australian telecoms — are at cross purposes with the broader objectives of Labor's NBN. Vocus, like any other private company, will go where the money is, as with its recent decision to invest heavily in trans-Pacific undersea capacity.

Labor has been recently working hard to blow citizens' thought bubbles around potential rural applications of the NBN: witness Armidale's SMART Farm, the 1800 residents that have dropped into the Armidale Digital Hub; or the $12.5m investment in a University of New England facility that will use the NBN to access medical lecturers in the US. Look at the satellite ground stations to be built in rural WA; the announcement of new NBN branches in Cairns, Mackay, and Townsville; or the residents of Tasmania, who are scheduled to all have FttP in three years from now.

Are all these Australians any less deserving of modern communications infrastructure, just because they live in areas where private companies like Vocus can't justify the expense of installing fibre? Really?

The key to making the most of the NBN is to not marginalise one group of Australians by assuming they do or don't want something in particular. It is about engaging all Australians — rural and urban dwellers — to look towards the future on the same terms. If we could all do that, I think even Spenceley would find that rural customers require a lot more than he's giving them credit for.

What do you think? Do rural Australians really require "something very different" than their city counterparts? Or is Spenceley right, and they just want a connection that works, even if it's slower than city broadband?

Topics: NBN, Telcos

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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31 comments
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  • Spenceley's comments appear reasonable

    Spenceley's comments about different customer requirement for CBD customers (predominantly commercial) and regional users appears simply stating the obvious. Is this even contested?

    Look at all of the infrastructure supplied to the CBD (electricity, water, sewerage, data, transport, etc), it is all supplied acknowledging these difference.

    From this position clearly services can be provided to these different customers using a variety of technologies.

    The issue isn't whether rural customers are happy to spend as much as CBD customers; but what type of services they require and whether they prepare to spend considerably more to have it delivered to them (or subsidies require to absorb the cost differential). They last point is a least in part acknowledged by the variety of technologies the NBNCo will be using to deliver data service to small regional communities (do they "deserve it").

    It's telling the examples supplied can be done using today's data infrastructure. Exactly what's the additional $63+b of money buying? We'd look to the CBA, but sadly one wasn't performed.
    Richard Flude
  • It depends on how you define "rural"

    So, should rural towns and cities have something less than their major city cousins? Probably no. Should outying houses in rural areas have something different? Probably yes.
    Wakemewhentrollsgone
  • It's about economy of scale

    Do rural customers want the same as their city cousins? Yes. Are rural customers prepared to pay the same as their city cousins for the same service? Yes. Does it cost the same per customer to provide a service to a metropolitan area with millions of people compareed to a country town with a population of 1,000? There's the rub.

    Even with cross subsidisation, there comes a point where the economics just don't stack up. That is why even under the NBN plan, 7% of Australians are going to be stuck on wireless or satellite with a 12Mb service. Do these people want the same service as thise in the local town? Yes. Would they be prepared to pay the same for tge same service? More than likely.

    Would the other 93% of Australians be happy to pay more to extend fibre to 100% of the population?
    BRC-4c5c4
    • "Would the other 93% of Australians be happy to pay more to extend fibre to 100% of the population?"

      Eventually that would most likely just naturally happen anyway, assuming the NBN is built as planned of course.
      Hubert Cumberdale
      • ???

        Would it? Why? Where did you get that from?
        BRC-4c5c4
        • Quigley

          That comes from Mike Quigley himself. Once NBN Co has paid back it's 107.1% to the government, the rest of the profits will be poured back into the network.

          I wish I could find where he said that now... but it is common knowledge for people who've been reading the more informed news sources.
          karl_w_w
          • Please look

            Pouring money back into the network is one thing, but premises that are uneconomic to service with fibre today (hence the need for wireless and satellite) are not going to be magically economic to do tomorrow. It is a huge leap to assume that that is what Quigley was suggesting unless he explicitly stated it.
            BRC-4c5c4
  • How much $ is to much?

    Its not finding millions that would be hard, its finding multi billions.

    Once you decide that cost should no longer be a consideration you have to connect everyone.

    Since its "unfair" to leave out small rural towns billions more are found to connect them. What aboput the people 10km outside of that town? Find some more billions to ensure everyone else in the same situatution is now connected.

    What aboput the people 20km outside of that town? Find some more billions to ensure everyone else in the same situatution is now connected.

    What aboput the people 40km outside of that town? Find some more billions to ensure everyone else in the same situatution is now connected.

    What aboput the people 100km outside of that town? Find some more billions to ensure everyone else in the same situatution is now connected.

    Due to my distance from an exchange I get 4mb/sec and I manage to do a great deal. 12/1 is not going to be all that bad (similar to FTTN speeds in New Zealand) for the foreseable future.

    If everyone in Australia could already get similar speeds it's inlikely we would feel the need to build the NBN this decade.

    When 93% of Australia is connected by fiber, apps that take advantage of the NBN will slowly become normal. In a decade+ I can see myself and a future gov (probably not LNP...) agreeing that it's time to upgrade the remote rural links, be it by fiber or magical wifi or just satelites with far greater bandwidth.

    I would agree to it right now, If the opposition didn't think that the money already being spent was excessive. Get the LNP onboard with spending another 20 billion to reach all towns over 100 premises and you wont have to contend with a gov trying to limit costs to stay in gov. You could even pay for the extensions out of the 7% profit that the NBN will make when completed.

    If you really want fiber, you need to ring your local member.
    Paul Krueger
  • Most replies so far.

    Seem to be from city slickers. I'd argue country area's need high speed internet more than city folk.

    Martin
    martin_js
    • Do only "city slickers" raise the issue of cost?

      "I'd argue country area's need high speed internet more than city folk."

      Go on then, support that point.

      Country users may benefit more from the delivery of services over IP networks but does that require high speed broadband? What are they prepared to pay? What about the costs?
      Richard Flude
      • Lonewood said it better than I could

        So I'll defer to his post.

        Martin
        martin_js
        • Doesnt cover any of the points raised

          Are you answering a different post?
          Richard Flude
      • Re-read a lot of your arguments Richard

        A lot of what you argue for is a basically a breakdown of society (effectively "screw them, they don't need it cause I'm ok") based purely on a profit/loss basis. Actually, you and Mr Spenceley are arguing for an either further breakdown than the one that's currently occuring "in the bush" (google up "rural youth suicide" and "outback towns dying" just for a few examples).

        Along with things like Medicare, the dole and universal access to quality education, the NBN will actually lead to a better connected Australian society, and it's very telling that I've never seen one argument from you that has anything at all to do with the benefit (or not) to actual society...
        Tinman_au
      • Of course

        Thats the answer. Of course regional and areas need high speed broadband. They miss out on many of the educational, health, welfare etc that the city benefit from. For example trying to see a specialist in a regional area takes a very long time. They only fly into certain places certain days of the week. High speed video conferencing would enable a lot better access to health services because it would reduce the reliance on needing to rely on expensive flights, accomodation costs, consulting room rental etc for medical specialists. The reverse is also the case if a person, and their support carers need to travel to metor areas for check ups and consultations. This can be expensive, time consuming and sometimes physically painful. Its not like in the city where its often a short trip to access these services. The same can be said for educational services. Business services. Specialist business advisors are sparse on the ground in those regions. High speed internet video conferencing and webinars would allow regional and rural businesses to benefit from their services.
        There are many more examples of why regional and rural people need the same level of service as city people in relation to internet, it could be argued that many of them are even more important in those areas than in the city.
        Its very shortsighted and ignorant to suggest only the city should get high speed internet.
        CommonSense-e9dea
    • I am from the country

      But I also see a need to be pragmatic about the potentia cost.
      Wakemewhentrollsgone
    • Roll on the NBN

      Of course rural/regional areas need the NBN - I would argue even more so than city areas where this is already more choice. It is just insulting for city-slickers to assume that farmers and other people who live in regional Australia do not need the level of service that city dwellers take for granted. It is insulting and WRONG!!

      The NBN in its current form is a good compromise between bringing a fantastic service to most of Australia with a very good service to the 7% without it being completely exorbitant in cost. Hopefully there may be some extension to the network over time but it is not really justified at this point - better to just get it built.

      What I think most are missing is the opportunity for decentralisation. It is just NOT environmentally sustainable to keep filling up the cities with more and more people. If some of these can get out to the regional centres and even the smaller towns, this will take a lot of pressure off the cities, give those people a much better quality of life and give more of Australia a chance for sustainable growth into the future. The NBN is a really important driver for this. There are lots of fantastic ideas just waiting for internet capacity to become available. Even in my own small business, I am limited by the download AND upload speed available to me PLUS the data quota available on satellite. Multiply my situation by many thousands of other small business operators and you have heaps of unmet demand.

      Rural customers should not be given a raw deal just because a big company gets it wrong - we are definitely prepared to pay for a better service and we will use every bit of it. What we have been missing is a private company prepared to offer a decent service. NBNCo will change all that and put everyone on a level playing field - finally allow market forces to really work out here to give all of us the benefit of competition in the telecommunications field.

      The Coalition lack of a plan is a real worry - to see these kinds of wrong assumptions echoed by relevant businesses is even worse.
      Lonewood
      • "What I think most are missing is the opportunity for decentralisation. It is just NOT environmentally sustainable to keep filling up the cities with more and more people."

        Totally agree. We have such a big country there’s no need to dump everyone in a few cities on the coast. Of course these days (and more so in the future) people are not going to want to move unless they know they can get the exact same services as they have come accustomed to in their current location. Before broadband this was electricity, water, phone and sometimes gas. Today broadband is included in that mix and is something people consider when moving. In ten years time (or sooner) the assumption will be fibre, if a premise does not have fibre the question will be "Where's the fibre?!?!". That's progress.


        "The Coalition lack of a plan is a real worry"

        The coalition at this stage have nothing substantial to offer. They are not looking beyond the next election. Any future needs are irrelevant to them, they've said many times such speeds are not needed and FttN is sufficient. They have failed to provide any details on a long term plan and if there would be any upgrade path to a proper FttH network with their "plan", it's an issue they want to deny and would prefer everyone just ignored for their political convenience.
        Hubert Cumberdale
    • "I'd argue country area's need high speed internet more than city folk."

      Certainly, you are right martin. The flawed logic of some is that regional areas need less speed simply because it's more expensive to provide backhaul to those areas but the real fact is that faster speeds are needed over longer distances not less. Consider a hypothetical scenario in a densely populated area, if you want to transfer a bulk of files you could put them on a thumbdrive an get a courier to take it if your network isn't up to the task. In a sparsely populated area or between two towns/cities it would be more economical and efficient to transfer those files on the network rather than use the thumbdrive option. Of course without the NBN neither city or regional users will get any of these benefits.
      Hubert Cumberdale
      • Not just backhaul more expensive

        Indeed this is the cheapest of the issues. Distances between customers larger, operations much more expensive to support.

        Would your hypothetical example not be justification that courier services in regional areas be improved to city standard? ;-)
        Richard Flude
        • You still seem to be "confused"

          "Distances between customers larger, operations much more expensive to support."

          So slower speeds are what you provide to these areas despite the same needs? Brilliant logic. btw how does this help people living and working in cities? If they want to receive files from a client living or working in a regional area and communication infrastructure it not up to the same standards it's not really going to be helping their productivity now is it?



          "Would your hypothetical example not be justification that courier services in regional areas be improved to city standard? ;-)"

          Apparently you quite don't grasp or understand the fundamental differences between the physical movement of objects vs data transfer.
          Hubert Cumberdale