NBN should be free, says economist

NBN should be free, says economist

Summary: Why the National Broadband Network should be free, and other stories from another day of the Senate Select Committee on the Rudd Government's telco infrastructure baby.


Joshua Gans from the Melbourne Business School says the media are missing the main game when they keep harping on about the need for the NBN to make a commercial return.

He says the social benefits are the real story, no one is going to make money from selling access, so it should be given away from the start. Independent consultant Kevin Morgan has a different view. He says the whole project lives in the realm of fantasy and secrecy.

These are just a couple of the views expressed at the Senate Select Committee on the NBN's public hearing in Melbourne earlier this month (7 October). In this half hour summary of the one day talkfest you'll also hear from:

  • Greg Wyler from 03b Networks says low orbit satellites can provide the backhaul

  • Elizabeth Barnet from Vernet doesn't want the NBN to be built without considering the high bandwidth needs of the education and research sector

  • Folks from Ballarat ICT Limited tell us what a great place it is to live in — did I miss something?

  • John Dubois & John Weston from Senatas ask for encryption to be built into the network

  • David Ryan and Sharon Tonkin from the Grampians Rural Health alliance talk about the benefits they're seeing from their own regional fibre network

  • Brad Wynter from Whittlesea Council had the foresight to put conduits in greenfield sites, but the carriers still wanted a subsidy to build.

See the full line-up of the day and transcripts of all sessions here.

You can listen to our other podcasts of the Senate Select Committee on the NBN: Sydney 3 March, Canberra 4 March, Canberra 1 October. Got something to add? Be sure to leave your comments, and be nice to each other please.

Topics: NBN, Broadband, Government AU


Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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  • Cheaper Beats Faster

    Someone in the podcast uttered the above words of common sense.

    Most of the rest was vendors talking about what they had to sell to those NBN folks with AUS$43 to spend.

    I guess that was the point of the Podcast.
  • NBN

    Joshua Gans is right. The public conversation is facile. Of course we will improve society and possibly in ways that we cannot yet imagine. It is the content and apps that will provide economic returns to those smart enough to create them. A Ferrari still drives on the same road as the Ford. Self-serving luddites are fighting over the last war. They should be irrelevant.
  • Please no satellites...

    Perhaps my math is off, but it would seem that even with a satellite @ 8,000km, we're still talking a minimum of 50ms round-trip to you next-door-neighbour - and that's assuming the satellites, your PCs and your routers add no latency themselves. Combine that with our existing latency problems routing locally then out of the country - it just is NOT a viable solution for a high-speed, low-latency network.

    Moreover, what's the capacity of these satellites? How soon will it reach it's full capactiy? What speeds are we talking? Can we flash a firmware upgrade and all get 1Gbps? 10Gbps? This is what FTTP offers... potentially infinite bandwidth. Why go for a stop-gap solution that will put us in the same situation we are now in 10 years?
  • NBN should be free, says economist, pfft!

    how do u convince people to invest in a network and guarantee them a 0% return? NBN should be free.. pfft there goes a flying pig, FREE BACON!
  • easy

    you sell them telstra shares.
  • Always best to listen

    ..rather than work off a headline
  • Free beer and bikkies.

    Yippee lets make everything free. That way the cycle of business will pick up and the economy accelerate.

    Let's give China our minerals for zilch that way we will get far cheaper imports from them. It's a wacko world.
  • @Always best to listen

    good point. all these telstra morons did was see the headline and react. of particular immaturity and stupidity, free beer and bikkies. it takes all kinds, hey.
  • even when you read further...

    It still says free. In which case it's going to be worth what you pay.
  • NBN Not Quite Free

    Jonathan Gans is on the right track in stating the obvious that Australia will be much better off if the NBN is not justified on business lines - and the proof of this is that Telstra operates on justified business lines; which has resulted in non-metro areas getting virtually NOTHING since about 1982...

    We can only hope that some sanity reigns (rains) in government ears and they too realise that the NBN is not to be justified by "internal" commercial P&L but has to be justified by "external" P&L: savings made in other areas of the continuing Federal / State / Local budget - like less Social Security into non-metro areas because of higher employment opportunities; more work in non-metro areas meaning higher tax returns; better health standards meaning less drain on the medical bucket; less physical transport requirements replaced by far more productive Internet transport, which in turn opens the door to radically improve farming and grazing profitability - which brings in more taxes!

    All these productivity gains pay for the NBN wholesale infrastructure, so it can be onsold (on-rented) to at low wholesale rates to retail resellers like Telstra and Optus etc who can then make a killing in retailng to the general public.

    As Graeme Samuel said (about the draconian institutional investors stuck in last centuries' blinkered 'bricks'n mortar' mindset); "Methinks the Protesteth Too much"!
  • Satellites are Unnecessary

    If the NBN engineers were to put in a solid inland fibre backbone from Darwin - Tennant Creek - Mt Isa - Cloncurry -Winton - Longreach - Baracline - Blackall - Charleville - Cunnamulla - - Bourke - Cobar - Lake Cargellico - Griffith - Mildura - Broken Hill - Peterborough - Port Augusta - Port Lincoln; this would pick up almost all the eastern inland "outback" and provide a major link towards Asia/China/ India / Europe; take the load off the coastal backbones and provide the spine for a high capacity grid to connect to most large coastal cities.

    This simple backbone spine infrastructure would obliterate the need for Internet based Satellites and provide a high capacity bypass between capital cities (Adelaide, Malbourne, Sydney, Brisbane, Darwin)

    Coastal cities like Cairns, Townsville, Mackay, Rockhampton, Maryborough, Gympie, Lismore, Grafton, Port Macquarie, Newcastle, Batemans Bay, Meribula, Lakes Entrance, Portland, Mount Gambier, Victor Harbour, and Port Lincoln would be connected by spurs off this spine and have a very fast Internet capability - not tied fibre star networks out of Sydney, Brisbane and Melbourne!

    The spurs to these coastal cities will pick up the localities of (at least) Richmond, Hughenden, Charters Towers, Atherdon. Mareeba, Emerald, Clermont, Moranbah, Blackwater, Roma, Miles, Kingaroy, Mooney, Dalby, Toowoomba, gatton; Ipswich, St George, Goondoowindi, Tenterfield, Brewarrana, Walgett, Moree, Inverell, Glen Innes, Narrabri, Gunnedah, Tamworth, Walcha, Gloustecer, Forster, Nyngan, Dubbo, Gilgandara, Dunnedoo, Denman, Cessnock, Maitland, Condoblin, Parkes, Temora, Young, Cootamundra, Wagga Wagga, Denelquin, Corowa, Wangaratta, Bright, Swan Hill, Ouyen, Warrackenabeal, Horsham, Hamilton, Portland, Renmark, Murray Bridge, Victor Harbour, Gladstone (SA) Kadinda, Yorktown, Iron Knob, Lock - and many inland from this spine too.

    With this spine it would be cheap to put Broadband into Birdsville without satellite as there is already fibre from Longreach towards Birdsville and if this were extended to Galway Downs ($3M), then this could cut into the existing backhaul radio link (Emerald to Birdsville) and "Whooska!"

    So - almost in all areas of ther eastern side of the continent Satellite is not necessary at all, and probably the same for the Western side of the continent too!
  • NBN

    Where exactly is the logic in using Satellites?? I really wish people would get "OMG IM GETTING 10,20,50,100 Mbps!!" out of their head.

    You can push as much speed as you want down a line but its not gonna make any difference at all.

    It's like having 50Mbps and a tiny ass pipe that extends for 26kms. You need a fatter pipe and shorter distance and compensation for lost data along with redudancy links.

    A Satellite in the sky certainly is a long way and there really is no form of repeater that would pick up the slack.
  • Satellites are vulnerable

    I wonder if they've thought of the physical risks of using Satellites... i.e. space debris; solar flares wiping them out; etc. In the case of the latter, although a fibre network is dependent on the electrical infrastructure around it, the actual media is only vulnerable to farmers digging graves for their cows/council workers/etc (avoidable given the right amount of redundancy/planning/protection); it would be just a matter of fixing/protecting the equipment and not having to send up another satellite for some ludicrous cost. See the following for some info on solar flares and possibilities/effects - http://www.engineeringnews.co.za/article/the-sunspot-cycle-is-not-science-fiction-2009-10-23#