Coalition broadband safer than NBN: analysts

Coalition broadband safer than NBN: analysts

Summary: In wake of the Opposition's broadband policy announcement today, some analysts said that Liberal's plan could potentially be safer, more flexible and "give more bang for your buck" than the National Broadband Network (NBN).

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In wake of the Opposition's broadband policy announcement today, some analysts said that Liberal's plan could potentially be safer, more flexible and "give more bang for your buck" than the National Broadband Network (NBN).

While industry analysts Paul Budde and IDC's David Cannon argued that the Opposition's policy built on "old technology" lacked vision, IBRS's Guy Cranswick and Ovum's David Kennedy said that a lack of market demand, uncertainty and complexity in the telecommunications market meant that the Liberal's policy could come out trumps.

Kennedy believed that the parties' differing approaches are indicative of two different philosophies in addressing broadband. He called the government's policy a "big, snowy mountains style" infrastructure scheme. He believed that the plan could easily provide all the bandwidth Australia will ever conceivably need.

He said that it "was hard to tell" which one would be best for the long term and that both policies had advantages and disadvantages. Both hang on what "is going to happen in the future" particularly in terms of demand for high-speed broadband.

The Opposition's policy

"The Coalition views the NBN as too big a risk," said Kennedy, explaining that it had put forward a more "incremental strategy" than the government and was "prepared to let the market work where the market is working well". The main strength of the Opposition's policy was that it was "much cheaper" with its projections of "$6 billion" as opposed to "$43 billion", according to Kennedy.

However, Cannon believed that the Opposition's plan of "leaving it up to the market to decide what the last mile will be means leaving it up to Telstra which simply is not going to happen".

Budde also slammed the Opposition's policy claiming that competition on infrastructure didn't make sense. Instead what mattered "for competition are services delivered over that infrastructure". He argued that the Opposition could not achieve this by "referring back to the failed policies of the past".

Cranswick claimed that giving the market more power would not necessarily be detrimental, as long as the government had a role to play in regulating and guiding the market for broadband where necessary.

According to Kennedy, the Opposition will need to focus on intervening in "backhaul monopolies" and "rural and outer metropolitan markets" as outlined in its policy.

The Opposition's policy did not surprise Cranswick, who believed that it was consistent with the Liberal's beliefs in reducing waste and maximising efficiency. The policy, with its lower cost, may be a sensible option and ties into larger debates about best approaches to broadband, he said. But he said that it is a complicated argument without a clear answer.

Cranswick believed that the modularity and flexibility of the Opposition's policy may also mean that it will be the safer option in the short term. However, he expressed concerns that a new (and costly) bureaucracy may emerge to replace NBN Co.

The case for the NBN

In terms of technology, the Opposition's policy is largely trumped in terms of performance and reliability by the NBN, according to Budde and Cannon. Fibre networks are also easily upgradeable, Kennedy said.

More importantly, for Cannon and Budde, the NBN is already being rolled out.

For Budde it was clear cut that the government's policy is better. He said it will provide a solid framework for the future.

"The fibre backhaul plan is certainly a good policy," he said, adding that while current, "old" technologies can be used "as a bridge to the future ... everybody else in the world acknowledges that the future is [fibre technologies]".

Budde believed that the Opposition's plan will stifle investment, saying that old technologies cannot be used as a plan on their own.

"The current plan will not deliver the security investors need to put their money on the table," he said.

This idea was supported by Cannon, who slammed the Opposition's policy.

"The Coalition are really clutching at straws with this policy. It only seeks to resolve some of the nation's market access woes with a piecemeal technology approach and the key backhaul portion of it to be delivered in the long term," he said.

Cannon claimed that the Opposition wrongly believed the existing structure of the "telecommunications market is sound and that the current exchange based DSLAM technology via copper is sufficient going forward".

"The government's NBN vision is quickly becoming a reality at a much lower cost that initially quoted. This is a 50-year vision for Australia's communications future where comparatively the Coalition simply has no vision," he said, adding that it was necessary infrastructure for e-education and e-health.

Yet Cranswick believed that economic volatility, uncertainty and a lack of demand for 100Mbps internet may mean that the Labor Government's plan will deliver very little (or no) return on investment. Cranswick advocated that while a few sites, like health, media and education relied on super-fast broadband, this may not be the case for all Australian businesses.

As far as Cranswick is concerned, considering the current demand for broadband, the government's network is a lot of investment for "little, if no, return". In his view, questions relating to efficiency and waste need to be addressed when considering the NBN.

Kennedy also stated that currently there isn't a lot of demand for 100Mbps internet, citing low take-up of Telstra's cable service in Melbourne. However, Kennedy believed that this could change in the future, adding that it was early days yet.

The Liberal and Labor approaches may be quite different, but Kennedy said that both had a mutual desire to tighten up the competition regime.

While the Opposition doesn't support the functional separation of Telstra, it supports all the other measures being put forward in the Senate, which Kennedy believed is "bad news" for the telco.

Topics: Government, Broadband, Government AU, NBN

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Talkback

16 comments
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  • If the goal is just simply to be safe, then why not stay status quo instead? Surely, it will be 100% risk free investment because you do not have to spend anything at all.

    What people should realise is that investment in infrasture is both risky and expensive. Despite this fact, it is a necessity to ensure and guarantee Australia's competitiveness in the future economy. One should not ignore the trend and direction and the changes in the economic order that the internet has created and Australia must be prepared for the next wave of change. Australia has already lagged far behind from the US in terms of the economic opportunities that the internet and related technologies have provided in the past during the Dot Com Boom.

    So really, if one thinks about it, the real question is, in the future, when new economic opportunites will be presented, will Australia be in a competitive advantage with a Labor NBN or a Coalition patch technologies? In the future, can Australia provide the right technology to come up with pioneering companies such as Amazon, Yahoo, or Ebay as what happened in the Dot Com era? Or, the situation would be that, as in the past, we would be contented with a dial up connection when our European and American counterparts were already running ISDN (RIP, Thank Heaven!) and DSL and accessing their websites because Australia had very few online sites then?
    joelmccoll-25409
  • To be completely honest, I work for the big T. The NBN causes some real uncertainty for myself and other workers in that particular company. That being said however, any other alternative is going to be obsolete within a very short amount of time, and anything less than fiber will put us behind the rest of the world.

    So, regardless of personal worries about what it could do to my company, I believe for the absolute vast majority of Australians the NBN is the right thing to do.

    Risk or not, its a bigger risk becoming a technological dinosaur.

    Spending any kind of money on a solution that will be obsolete quickly is worse than spending a lot of money on something that technically could last us for at least the next twenty to thirty years.
    Pablosan-1a609
  • Seriously I believe the Libs don't, and are planning for no broadband plan for Australia at all...

    WTF you say...?

    Well, it is common knowledge that the Greens will in all probability, hold the balance of power in the senate.

    As such, the Greens have stated that they support Labor's NBN and are against the filter.

    This being so, the filter is dead, no matter what. Libs win = no filter. Labor wins, filter goes to Senate, Libs + Greens = no filter, cool!

    Bit isn't it the same with the Libs Brodband plan?

    Labor wins = NBN full steam ahead. Libs win, they stop the NBN and when their broadband plan goes to the Senate, the Greens and Labor vote against it.

    Which leaves us, umm, exactly where we are right now, Abbott, puts the $7b under the mattress, ala Howard and says, look what an economic genius I am... and idiots believe him too, LOL!!!
    RS-ef540
  • Ask any CIO in Australia (or the world for that matter) and they will tell you that software as a service (SAAS) and infrastructure as a service (IAAS) are part of IT strategies to optimize services and reduce cost, and the only way to achieve this is by having bigger internet connections. If we want Australian companies to compete globally in a sustainable way then we must have a proper infrastructure. Maintaining old technologies is a short-term solution that will require more money in the long run.

    I had higher expectations of the Libs policy, this shows that politicians care more about public image than long term vision for the country.
    ivan.romero
  • No NBN = No future for this country in technology or technological advancements

    All the growth economies are able to put in new infrastructure at half the price (They don;t have to replace existing infrastructure just build it) and they are many generations ahead of Australia and the western world who are sitting on 50year old technology.

    It is time we stopped being so selfish and give to future generations instead of thinking in 3 year blocks which get us nowhere.

    I want my kids to be able to compete against the rest of the world and win not just to wait on their tables or work in their mines
    clinnd
  • As a home internet user I'm all excited and want access to the NBN. But as an IT person I feel the Opposition plan has a slightly better grasp of the community as a whole.

    I don't feel the Oppositions policy is as backward thinking as everyone makes it out to be. They seem more focused on Wireless development. I think Wireless has more of a future than fixed broadband. We are using SmartPhones, netbooks and laptops more and more nowadays. With these kinds of devices on the rise we don't want to be locked into a single access point for our internet. We need to have freedom of movement.
    shanelp
  • Wireless = Latency, Latency = Realtime lag/jitter in realtime applications... It's not all about throughput Doesn't matter if its 3G, LTE, WIMAX or Satellite.
    scrantic
  • @shaelp,

    While wireless may serve individuals doing incidental tasks, it will not be able to keep up with the mutimedia bandwidth to be expected in the near future. Its advantages now are immediate connection after purchase and better upload speeds (at least with NextG).

    ADSLx just does not have the upload speeds to properly support SMBs, which need symmetrical speeds. 30Mbps will just not serve an SMB with just a few people, and in the country ADSL can supply nowhere near that!

    Now, if 100Mbps fibre is supplied to every premise throughout metropolitan and country town Australia, people can work from home easily, and SMBs can be connected without necessarilly going to expensive connections.

    With the Opp's policy, at what cost is a country town SMB going to have to bear to get 100Mbps connections? Many IT people and companies could be out of the cities with high speed connnections, but that would be a very long time off under the Opp's policy.

    Waiting for infrastructure until immediate demand is there is showing a lack of foresight in IT. High speed broadband is an enabler for a radical shift in populations, allowing much better use of the space resources in this country, but unless it's there already, no one will move.
    Patanjali
  • It's also "safer" staying in bed, and not risking going outside and getting hit by a car crossing the street - doesn't mean you shouldn't do it...
    mwyres@...
  • Wireless is a stopgap measure. it will *always* lag behind wired. that's the nature of it. It is insecure. even wpa-2 can be hacked (hacking into wired/optical is easy too but needs to be directed, which is to say you need to choose your target).
    But tens of billions on something that may or may not fill a need? I mean really. This is not the snowy mountain scheme of the 21st century, its an expensive vote grabber. and of course the IT companies are going to be on board. I am in IT but I can't see the risk/reward balance is fair enough. IT companies want a free ride. that's why they support it.

    That's not to say I support the oppositions plans either. wireless is a great stopgap but that's all. I would be behind the oppositions plan 100 % except for one thing. They won't break Telstra up. they created that monster and it would be admitting failure if they broke it up. but that's the only way broadband will progress in this country.

    DC
    DeveloperChris
  • SAAS? How very 1960's

    One reason why "CIO" want to use SAAS is because they can out-source the responsibility for when things go wrong. It's not the only reason, but a significant one.

    For those considering using SAAS for mission-critical (that's a 1980's paradigm) applications, there's always the wayward back-hoe to keep in mind.
    berfel
  • I'm astonished. How on Earth did you arrive at the 30 Mbps for an SMB?

    Although there are no doubt *some* SMB that will indeed need that, the vast majority of SMB barely need an Internet at all. They use it for looking up things like email, phone numbers, addresses, street maps, prices from suppliers, perhaps some voice and on the odd occasion, some video.

    Perhaps you can explain how a plumber can unblock your drains over the NBN or a baker deliver bread.

    And the NBN won't be symetric. Not at 100 Mbps. Just 8 Mbps out of the initially vaunted 100 Mbps. Which is only 4 times that of what can be done on DSL over copper.
    berfel
  • Those who actually observe what happens in the real world, will have noticed that many larger installations already have fibre running into the building or business parks. That's not just new ones.

    When one of my customers upgraded their WAN to SHDSL from Frame Relay, there "magically" appeared a fibre node on their premises. From which sprouted fake ISDN and DSL connections. The fibre is locked to that provider so when the customer chose to upgrade from a pathetically-slow ADSL to a cheaper, faster one, it had to be over copper wire all the way back to the exchange instead of being switched via the fibre to the same place.

    That's only one example. I have half a dozen others.
    berfel
  • A wayward (or malicious) backhoe will break a rural copper line and you have to drive fifty miles to find it. But bounce a signal down fibre and it tells you where the break is. Much quicker and cheaper to fix.

    How much is the coalition factoring in for the ongoing maintenance and 3-5-yearly hardware replacement cycle of its tens of thousands of wireless towers? Fibre to premises is lay-once-and-relax technology.
    umbria
  • But this IS the next snowy river infrastructure scheme! I'm from rural Vic, and I am thrilled to bits to have gotten access to ADSL (only because I live less than 5 kms from the nearest exchange that was upgraded to give the local primary school ADSL. I am truly in the middle of nowhere!) after struggling with slow speeds and pitiful limits with satelite, but even I can see a need for more speed. High speed access to internet will change our way of life just as the car did. It will change the way we work, shop, get education, health care, entertainment, talk to one another...there isn't a bit of our lives it won't change, just like the car has. Now just imagine if the government of the day had said 'we really think roads aren't good value for money, so we will instead upgrade all the bike tracks. More bang for your buck!' Where would we be then? Everything will change as technology takes us into a new way of doing things, and we can't be left behind. We just can't afford not to upgrade!
    Dusted-a0afc
  • Libs = Win = Tony Abbot = Conservative Catholic = Listen to ArchBishop = Filter Squared
    JoelMcColl