Australia doesn't need the NBN

Australia doesn't need the NBN

Summary: As someone who is very pro-technology and likes to be on the cutting edge, I find myself staring at many of my colleagues and acquaintances in the industry with disbelief when the topic of the National Broadband Network comes up.

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commentary As someone who is very pro-technology and likes to be on the cutting edge, I find myself staring at many of my colleagues and acquaintances in the industry with disbelief when the topic of the National Broadband Network (NBN) comes up.

People I know (and some who just email or tweet me) ask if I've bumped my head and forgotten what I do for a living. It even has had me re-thinking my views, but ultimately I keep coming to the same place.

$43 billion is a ridiculous sum of money to spend on anything. It is even crazier when the country finds itself coming off a $22 billion surplus and staring down the barrel of $100 billion of debt. I don't think this is at all right now about need, but is entirely about our ability to cover the cost of such a thing.

Our federal government, no matter who wins the upcoming election, is going to be spending about $5 billion to $6 billion per year just servicing that $100 billion debt — on the $30 billion of debt on the NBN, you'd be looking at close to $2 billion of servicing costs per year alone!

Why not get back into surplus then revisit this whole situation? If the US economy fully recovers, Europe looks stable and forecasts for the Australian economy look good and project us paying off that massive debt, then awesome, let's come up with a plan and build a world-class network.

The next problem I have is around the actual execution. Does anyone think that having this big capital works program run by a guy with a hardware vendor background and some consultants is a good idea? Not only that, it seems like they are doing it on the fly. If we're going to spend all this money, couldn't we at least see a coherent plan of what's going to be built before they start awarding contracts?

This is the exact same mess Labor created with the Insulation Program and the Building the Education Revolution: lots of spend, very poor controls, not enough safeguards and very poor oversight. I'm not a fan of the NSW Labor Government (they don't have many fans) but thumbs up to Premier Keneally for spending a bit more money on project management and diligent execution. My kid's school is getting six new classrooms, on time, which presumably in construction (of which I know a bit about) is probably on budget.

When I hear NBN Co talking about satellites and all kinds of other unplanned crazy, this starts smelling like many other IT projects: $42 billion will quickly become $50 billion and so on.

I have an issue with the necessity as well. Many of my colleagues and friends in IT are running around crazily screaming that 100Mbps isn't enough for people. We need 10Gbps.

Huh? That's just stupid. Right now, most people are operating on their home internet connection at under 2Mbps and some have gone up to 8Mbps with ADSL2+. Take-up on ASDL2+ hasn't been 100 per cent; many people have chosen to remain happily on lower speeds. I've had Telstra Cable and used to routinely get 15Mbps or more. It was good enough for me, and I'm about as much of a power user as you're going to find. Right now I'd venture a guess and say that for the next 10 years, 100Mbps is going to be more than enough to meet the needs of the average person.

Capacity is my other issue. I don't have figures to back me up, so I'm openly winging this bit — let's call it an educated guess. My understanding is that a significant majority of traffic consumed by Australians comes from overseas and, presumably like most other countries, the US would be a big part of that. The NBN plan does nothing to increase the capacity between the US and Australia, so aren't you just building a giant fat pipe to try and suck a pea through a straw? As I've said on Twitter, if the NBN included a fibre run to Guam/Hawaii and onto the US, then I'd be more excited. This would go a long way towards getting rid of usage-based rates for internet connectivity and provide a more, "all you can eat" style.

I also don't fully understand the use cases for all this bandwidth. One of the first things you hear talked about is remote communities getting better medical care. OK, maybe we'll be able to move high-resolution x-rays and MRI results around, but I think you'd have a better chance of finding a unicorn than finding a doctor willing to remotely diagnose a patient over a high-speed internet connection. Insurance companies will step in and crack down; I mean we struggle to keep obstetricians from leaving the industry because of malpractice, imagine what this would create!

The other big use case is improved education. Again, I don't understand this. The technology exists today to record lectures, stream them live or have them up for download and with the use of stuff like Skype, people can participate remotely. What are we talking about here, better resolution? Come on!

The final use case myth is around the magical undiscovered future technology that is going to require bigger bandwidth or we'll all move back into caves and be forced to live like Bear Grylls. That is Future FUD (fear, uncertainty and doubt), nothing more, nothing less. People who want this to go through use the fear of "falling behind" as a passive-aggressive sales technique.

The FUD runs so deep that you can't say things like, "I can't think of anything that could cause that disruption", because the FUDsters jump in and say, "Of course not, it hasn't been invented yet, that's why you should plan for it". Sorry, I don't go in for that kind of thing. When we get to that Minority Report-style, 3D holographic future, then we'll surely have seen it coming via a small series of increasing evolutions and we should then react accordingly, but technology normally doesn't have such abnormal disruptiveness: technology is an ecosystem of continual progress, standing on the shoulders of giants.

My last issue is with the evolution of technology. Right now the Net Neutrality debate is raging in the US. One ugly aspect of where the discussion is headed is wireless falling outside the scope of Net Neutrality agreements. This is simply because the carriers know that the best way to solve the last mile issue is with better wireless technology and that's where the R&D is going.

Digging up trenches and running fibre across telephone poles is a 20th century method of solving a 21st century issue. Then you have the same "technologists" who say we need all of this fibre to protect from "future unknown technology" while also saying that wireless and copper technology won't evolve. You can't have it both ways, you can't know what the limits of copper or wireless are while saying some undiscovered tech will come along and obliterate our bandwidth.

Overall, the best part about my position is, if I'm wrong, we wait a little and then the country just needs to get on with building it. However, if Labor is wrong and spend $43 billion on this network and it is underused and becomes a great big white elephant for the next 15 years, then what? You can't get that money back again.

Sean Kaye is a senior Australian IT executive. It first appeared on his personal blog, Sean on IT, and is republished here with his permission. Kaye also blogs at Startups Down Under.

Topics: Broadband, Government AU, Networking, NBN

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  • This is ridiculous. Australia's network is a pure ripoff... Coming from Europe I can see the difference. Also, check the level of eCommerce here...
    Of course, you need the NBN if you want to become a strong nation.
    TomEuro
  • This is ridiculous. Australia's network is a pure ripoff... Coming from Europe I can see the difference. Also, check the level of eCommerce here...
    Of course, you need the NBN if you want to become a strong nation.
    TomEuro
  • Sean, I hear the point about undiscovered future technology, even though it is inevitable, but yes, hard to plan for things that don't exist, point taken. It's quite disingenuous though. we don't know how many cars are going to be on the road tomorrow so perhaps we should only build 1 lane freeways and just wait until it is a real problem, and then make a plan.

    There are certainly plenty of current technologies that are in use today that are severely hampered by our limited infrastructure and capped internet access. For example; online/offsite backups, SaaS (applications, desktops, back office infrastructure), cloud computing (private and public), disaster recovery sites, telepresence, and digital media distribution.

    Have you ever worked in a small business that has multiple sites? Ask any small business how much they pay for their current services to link up their sites. These costs don't really matter to medium to large businesses but they are critical issues for the small businesses. Small business doesn't want to spend $1000+/month for a 2mb (yep, 2mb!) link (SHDSL).

    Have you ever tried to work remotely and needed to edit that huge pdf, not much fun, oh you got disconnected again.. start over thanks.

    In regards to the international links, there is plenty of untapped capacity on the current links. I believe that PIPE networks has only lit up half it's capacity/fibre and can be upgraded when required to 1.24Terabits per with out having to replace any hardware. This is just one cable, there are a few more that also have headroom available. I'm sure Southern Cross Cable has spare capacity too.

    Also, i think you are mixing up the words "cheapest" and "best" in this section of your article: "This is simply because the carriers know that the best way to solve the last mile issue is with better wireless technology and that's where the R&D is going."
    secretpants
  • TomEuro,

    I tend to agree with Sean. Albeit, I would change "Australia doesn't need the NBN" to
    Australia can't afford the NBN.

    Spending $43 billion to provide Broadband to a population of 22 million spread out on a continent the size of Europe is the ridiculous bit.

    You may find the following link of interest and my response to the point.

    http://www.businessspectator.com.au/bs.nsf/Article/Election-2010-Julia-Gillard-Tony-Abbott-politics-L-pd20100811-87SGM?OpenDocument&src=sph&src=rot

    "Vasso Massonic wrote:

    Keating and Howard were right that "if you change the government, you change the country."

    On this occasion, however, I think the catchcry should be: If you don't change the government, our grandchildren will be paying our 'Never Never' debts (See Small-change campaign, August 11).

    I agree, the $43 billion NBN is Rolls Royce stuff in itself. Gillard today threw in another $2 billion for a NSW transport fix. That makes $45 billion in debt for just two projects.

    11 Aug 2010 1:05 PM"
    Vasso Massonic
  • As I have said in my posts regarding the NBN, why?

    The wireless internet revelation is the next direction of broadband - why do we need a fixed service to be able to access the internet?

    Most of the time, these fixed services terminate at wireless access points anyway, and with the new wireless broadband docking station that Phone Zone has been selling, its even more proof that investing in, or even constructing a fixed broadband network is a major waste of resources.
    amckern-b0f83
  • And that ironically is why the Liberals plan actually isn't too bad. They are focusing purely on the backbone, and that will leave the retail carriers to delivery 3G, LTE, and whatever comes after that.
    Tezmyster
  • Because home users are just one small part of the NBN's potential customer base and wireless (a) has too much latency and (b) is too slow and (c) faces very real spectrum issues. Hook up a small business that has even a light dependency on the Internet to a 3G wireless broadband service and they will be pulling their hair out within minutes.

    Wireless broadband docking station? Do not confuse the wireless access points in your home - which are rated at 54Mbps (802.11g) and 300Mbps (802.11n) maximum speeds over very short distances - with the kinds of wireless that the Coalition is talking about. WiMax is a very different kettle of fish and LTE, a faster but still speculative option, is still years from even possibly being rolled out. The wireless you're using in your home is only as fast as your ADSL2+ service (if you have one). That's why as long as we work in offices and live in houses, fixed broadband remains hugely relevant - and fibre was already long ago proven to be the best way to deliver it.
    braue
  • Stuffed if you do, stuffed if you don't! Seems to be a NO v YES debate of the complete left and complete right.

    As a resident out Western NSW, over the divide, and with very little choice when it comes to decent internet, then I have to err on the side of we must join the 21st century and stop acting as a 4th world nation, as we are in this debate over decent internet. Every time I do a speed test I grate my teeth at the result, places I've never heard of in supposed 3rd world countries have faster broadband than we do, Australia is ranked WAY down the list of line speed.

    Business, education and home users (I am trying to do an online Masters Degree from home), need decent, cost effective broadband, not this rot I put up with.

    As Telstra see fit to put me on a pair-gained line, brand new estate 1.5km from the exchange, I can only have wireless (hopeless on again off again crap), or ADSL1, and don't they punish anyone who has to have ADSL1, double the price for 1/8 the speed and 1/4 the GB download allowance. Go figure I'm not going to err on the side of lets spend.

    Oh, don't stop reading yet, I do think though, it should be rolled out as we can afford it, but as a priority none the less, as we do not need a debt. But also, we don't want Abbot to get in and take us even further backward toward the 50's as some of his policies are going to do. Fancy having 22Billion in the bank and lousy roads, lousy rail, lousy Broadband, louse public schools, etc etc...what use is the money sitting in the bank doing for our way of life and our way of living.

    There has to be a happy middle ground instead of this far left and far right attitude.
    stufire
  • Stuffed if you do, stuffed if you don't! Seems to be a NO v YES debate of the complete left and complete right.

    As a resident out Western NSW, over the divide, and with very little choice when it comes to decent internet, then I have to err on the side of we must join the 21st century and stop acting as a 4th world nation, as we are in this debate over decent internet. Every time I do a speed test I grate my teeth at the result, places I've never heard of in supposed 3rd world countries have faster broadband than we do, Australia is ranked WAY down the list of line speed.

    Business, education and home users (I am trying to do an online Masters Degree from home), need decent, cost effective broadband, not this rot I put up with.

    As Telstra see fit to put me on a pair-gained line, brand new estate 1.5km from the exchange, I can only have wireless (hopeless on again off again crap), or ADSL1, and don't they punish anyone who has to have ADSL1, double the price for 1/8 the speed and 1/4 the GB download allowance. Go figure I'm not going to err on the side of lets spend.

    Oh, don't stop reading yet, I do think though, it should be rolled out as we can afford it, but as a priority none the less, as we do not need a debt. But also, we don't want Abbot to get in and take us even further backward toward the 50's as some of his policies are going to do. Fancy having 22Billion in the bank and lousy roads, lousy rail, lousy Broadband, louse public schools, etc etc...what use is the money sitting in the bank doing for our way of life and our way of living.

    There has to be a happy middle ground instead of this far left and far right attitude.
    stufire
  • Typical FUD Vasso...

    Just when we thought you had finally awoken from your 2005 Sol brainwashing, here we are with a new 2010 Liberal brainwashing.

    But of course, both brainwashings were welcomed by you, being both a Telstra and Liberal minion.
    RS-ef540
  • Typical FUD Vasso...

    Just when we thought you had finally awoken from your 2005 Sol brainwashing, here we are with a new 2010 Liberal brainwashing.

    But of course, both brainwashings were welcomed by you, being both a Telstra and Liberal minion.
    RS-ef540
  • To all the wireless proponents, here's a post from CW from a gent named warren (I hope he doesn't mind) but this analogy explains the fixed/wireless argument, brilliantly, imho...

    9/8 - "Bottled water, whilst convenient to pick up whilst you're out and about, is quite expensive on a per-litre basis compared to mains-based household water supplies. You certainly wouldn't use bottled water to supply your shower, flush your toilet or wash your clothes in. But when you're on the go, it's great to be able to grab a bottle to quench your thirst.

    If broadband were water, the Liberals would be focused on improving (probably by subsidising) the shipping of bottled water to rural and regional areas, rather than upgrading and extending existing inadequate water mains and supply infrastructure to 93% of the country, so that it will last the next 50 years.

    Broadband, like water, isn't a zero sum game... just because people buy bottled water, does not mean that they don't want mains supplied water at home" {END}

    Kudos again warren...
    RS-ef540
  • I know which one I think is more preferable and more cost effective - building a world class future-proofed network that will pay itself off (the money is not just being chucked into a hole you know), or providing grants to patch up an old 20th century system.

    If we don't build a fibre network now (and we will need to build one at some stage - the laws of physics are physically against wireless over wired) imagine the cost of doing it in the future. It is not going to get any cheaper to build.
    nomadtales
  • Mr "Senior IT Executive" - you forget one crucial point on your rant. Its called "infrastructure investment". This is something Australia is really bad at doing, thanks to our government's lack of vision. We don't seem to want to invest in ANYTHING! Not education, not healtcare, not roads, not fast trains, not even broadband.

    So we take your advice and save our billions. Sure what we have now is barely managable now. What in 5 years, 10 years ? Do we have to wait for our broadband to end up like CityRail before we think of doing something ? What will be the cost then ?

    You also forget - if you spend on infrastructure, you create local jobs. This in turns makes the economy better which of course helps the government recover the money it spend.

    What is the point of not having a defecit if the entire country's infrastructure is falling apart ? Besides, when exactly was investing in infrastructure cheap ? Did we ever get a special discount for infrastructure ? If Australia fifty years ago thought the same way as you did - where would we be now ?

    I used to wonder why technologically, Australia is so lagging behind even our "backward neighbours", now i know. Its because of the mentality of "professionals" like you.
    Azizi Khan
  • Sean, I do believe you have indeed bumped your head - this is quite a rant.

    You continue the furphy about Government debt, it is minuscule - the problem in Australia is that we have not spent enough on infrastructure in recent years - you need to borrow to invest in productive capacity - the ships off our ports waiting to load is just one manifestation of this problem. "$43 billion is a ridiculous sum of money to spend on anything." - We manage to find $22b for defence year in year out and that does not contribute to productivity, so I am sure we can find a way to find $42b to invest in a productive asset. Further, our capacity to service debt is about the best in the OECD. What you are presenting is an argument about a particular level of debt divorced context like how incurring debt may benefit us. Do you have a mortgage or are you so concerned about debt and the costs of servicing a loan that you rent?

    Re satellites - the Coalition is setting aside $700m to serve just 3% of the population!

    Just because you find 15Mbps is good enough for you at home does not mean that others find it adequate, or businesses for that matter which have different requirements.
    Re capacity you are inconsistent saying that the Government/NBN should be investing in submarine cabling – this completely contradicts your hardline position on debt. Usage charges are more about competition between telcos, not submarine cable capacity.

    “I think you'd have a better chance of finding a unicorn than finding a doctor willing to remotely diagnose a patient over a high-speed internet connection … Insurance companies will step in and crack down” Your argument is about nothing other than creating fear and anxiety. Perhaps you should ask doctors and those in remote communities for their views on the utility of this application.

    “The other big use case is improved education” – Sean, your examples are laughable Interactive education is possible with broadband, more applications and services for non-metro communities.

    “The final use case myth is around the magical undiscovered future technology that is going to require bigger bandwidth" - well many years ago people said that dial-up was perfectly adequate – you are in fact the one creating Future FUD (fear, uncertainty and doubt).

    “When we get to that Minority Report-style, 3D holographic future, then we'll surely have seen it coming via a small series of increasing evolutions and we should then react accordingly, but technology normally doesn't have such abnormal disruptiveness” – oh yes it does – the future is here, it is just unevenly distributed.
    Sean, are you a Liberal Party stooge?
    ralph12
  • Hi Sean, you said "Huh? That's just stupid. Right now, most people are operating on their home internet connection at under 2Mbps and some have gone up to 8Mbps with ADSL2+. Take-up on ASDL2+ hasn't been 100 per cent; many people have chosen to remain happily on lower speeds. " this clearly show that your knowledge of broadband and the industry is very limited. People are not happily to remain at low speed, because a majority of people CAN'T get access ADSL2+, due to Telstra pair gain technology. Also majority of older people exist in this country who doesn't cares about the Internet.
    tim222-e6078
  • Why thanks :D I don't mind at all and I'm glad my analogy works for you - I've struggled to explain to non-technical users why we need both kinds of technology, which is why I came up with it in the first place.

    It also captures something a little more subtle: I believe that the wireless broadband market for the most part IS working in comparison to fixed line broadband. (I want to make clear that when I say wireless, I'm talking mobile, cellular based broadband, not 'fixed' wireless last mile, such as WiMAX)

    People are quite comfortable with the water supply infrastructure being in public hands, a fibre CAN is no different.

    The NBN will indirectly drive improvements in the mobile cellular network anyway, by ensuring that the open access fibre is there to feed the cell towers for the likes of Telstra, Optus or Vodafone.
    warren_s-e1b57
  • First of all- FINALLY!!! It's about time there was an article that also raised the negatives of the NBN. I'm all for a reasonable discussion, working out Pro's and Con's but it seems the vast majority of IT personal prefer the idea of $43 billion dollars of investment into their field then whether it's worth it or not (and let's be honest... if they government offered billions of dollars in higher funding to your speciality... you'd likely look on them with rose coloured glasses too).

    I'd like to point out that this Debt consideration needs to be a major point. We must consider at what COST is it worth saying well that's too much. So many people loving the NBN don't seem to even consider $43billion... IT's $43 BILLION DOLLARS... this is no pocket change we're talking about and whilst we're in debt, it's a lot more money going down the drain each and every year from interest!!

    On the Education front... HAHAHAHAHA!!! Are we all that blind to think that a faster network is going to benefit the education side of universities??? Don't get me wrong, some universities do take advantage of new technologies and advance their IT services to students. To take one example though that doesn't is RMIT. RMIT currently only has a program of voice recording a handful of lectures each semester. In an age where all information is presented digitally, this is OUTRAGEOUS... until you hear why... The reason they do not offer anything more advanced is due to infringements on COPYRIGHT... yeah that's right... good all AFACT as scared even our universities into covering themselves. So don't expect any further improvements on the education front just because bandwidth increases... for the majority of universities, it's simply not going to change their services.

    Also on the Coalitions policy, as stephen conroy mentioned, they're ripping off the NBN plan for backhaul. So yes, the Coalition are building much of the backhaul (the guts) of the NBN just like labor, which means in the future, adding a last mile network would be just as expensive as it is today. Providing a deal with Telstra could be reached for their underground tunnels, then deploying such a network would be just as 'easy' as it is today. It's just instead of doing one massive project over 8 or more years, the Coalition is attacking some of the major problems that exist today in a far more cost-effective manner.

    However as pointed out in the article, neither side is yet to announce a plan to improve international capacity, which is the biggest bottleneck in our current internet services. Don't believe me?? Just do a speedtest, first selecting your local capital city, then say LA in america... notice the massive slow down in connection (if you're on a fast service)... here's the funny thing, my friend got all excited when Telstra upgraded his cable to 100mbps... whilst he could easily get in the 90's for his local speedtest, he only got 3-5mbps for the o/s connection. Meanwhile, my connection went from a lousy 500kbps local to 450kbps international... so what's the point having a massive local connection when a majority of internet traffic is overseas?? And where's the economic advantage for our businesses if all their overseas customers have to deal with the low speed international connections??

    Whilst i'm all for future-proofing Australia, how about fixing the current issues of backhaul and overseas supply cheaply now and look at investing the capital for a well planned out NBN in 5-10 years time when our economic situation has improved??

    After all- there's no point accruing $2+ Billion dollars of INTEREST each and every year, for a network that doesn't improve overseas speeds for customers already on an ADSL 2+ service...
    AWY-7dfd5
  • As to the FUD about being left behind:

    Yesterday, I checked a number of ISP offerings in Germany and found none that offered generally speeds in excess of 16 Mbps. Low-cost packages are typically at6 Mbps. A number of ISP state that in some areas, only 1 Mbps or 2Mbps are available. Other connections maybe piggy-backed onto ISDN BRI (128 kbps) and there are a few, isolated holes with only dialup.

    The highest speeds are available on VDSL using copper to provide up to 50 Mbps. But those are offered only in a few, small areas.

    Quick table (in German - but the numbers don't need translating) http://dsl-portal.net/
    berfel
  • And here - http://www.zdnet.com.au/broadband/speedtest.htm

    it shows we sadly fall behind -

    Malta
    Latvia
    Bulgaria
    Romania
    Estonia
    Etc...

    So your point?
    RS-ef540