We need the NBN because business does

We need the NBN because business does

Summary: I shouldn't have to write this column, but the persistent, uninformed comments I keep hearing show that far too many people simply have not considered what the NBN really means for Australia: the future of business.


The NBN is here: it's being used in Tasmania, it's about to be rolled out on the mainland, and it will — unless Tony Abbott is elected — be coming to your home or business within the next few years. Yet as far along as we are into the NBN, it's still amazing to me that I can sit at a table with a group of intelligent and experienced IT experts and have more than one voice dredging up the same tired arguments against the NBN: it's only for downloading movies, it's too expensive, it's too ill-considered, it's just a big expensive gift to Telstra.

These myopic, knee-jerk reactions are no better than Stephen Conroy's habit of branding anybody who opposes Labor's internet filter as advocates of child pornography. Just as there are perfectly valid arguments against the filter that have nothing to do with pornography, there are perfectly valid arguments for the NBN that have nothing to do with movie downloads. Ignoring them does a disservice to everything that the NBN promises, and will deliver — which is nothing less than a generational leap forward for every business in Australia.

Online economies will bring businesses into blue-sky territory, but they need the NBN to eliminate communications tyrannies of distance once and for all.
(Credit: David Braue/ZDNet Australia)

Even if you don't own a business, you probably work for one. And that's why it's important that every voter understand that the NBN wasn't designed just for everyday Australians' internet usage. Sure, it will become your home's primary communications lifeline to the world, but that's just fleas on an elephant compared with its total use. Unfortunately, consumer uses for the NBN are also the thing that gets the most attention, because the discussion has been directed by politicians trying to make the network relevant to the voters whose support they depend upon.

For whatever reason, those politicians have struggled to step back from the consumer discussion enough to clearly articulate why it's important that every one of Australia's millions of businesses — from mom-and-pop shops to the rarefied end of the ASX — have access to fast, reliable broadband. And this isn't just so their bored employees can download movies when things are slow: today's world of electronic payments, paperless shipping, on-site Wi-Fi, and so on all but demands that every business have reliable broadband.

Even if you don't own a business, you probably work for one... Unfortunately, consumer uses for the NBN are also the thing that gets the most attention, because the discussion has been directed by politicians trying to make the network relevant to the voters whose support they depend upon.

The biggest companies can shell out for expensive fibre-optic services available in specific parts of our largest cities: Telstra, for example, just announced it will install extensive fibre throughout South Brisbane in a move that will slightly expand the footprint of business-ready fibre services.

Millions of small and medium businesses (SMBs), however, can't afford the complexity or expense of such solutions. This has left them relying on whatever service they could get through conventional means — typically, whatever ADSL2+ is available in their region (remember that Telstra and Optus focused on households for their hybrid-fibre coaxial (HFC) network roll-outs, not business areas, so any cabled-up small businesses are more by accident than design).

With an absolute maximum of around 20Mbps download and a paltry 1Mbps upload, it's a big stretch to call ADSL2+ business-ready. The limited upload speed is of particular concern: while it's easy for businesses to set up 1Gbps networks inside their four walls, they've constantly had to compensate for slow wide-area network (WAN) connections. In the past, this meant figuring out how to link branch offices over ISDN or Frame Relay services running as slowly as 64Kbps; the answer, often, was to back up a branch-office server to tape, then physically courier the tape to a capital-city office for archiving.

If you think that's inefficient, today's systems aren't much better: 1Mbps uploads, like those provided by ADSL2+, are still just 0.1 per cent of the likely speed of a company's internal network; rarely-used synchronous flavours of DSL are no better, working only at 1, 2 or 4Mbps. And, unlike in a download-heavy home situation, upload speed is essential for businesses to seamlessly network their offices without suffering from WAN bottlenecks. In practice, linking branch offices using ADSL2+ is like racing your Ferrari down the freeway most of the way to work, then getting out and carrying it on your head as you pick your way through city gridlock.

Unlike in a download-heavy home situation, upload speed is essential for businesses to seamlessly network their offices without suffering from WAN bottlenecks. In practice, linking branch offices using ADSL2+ is like racing your Ferrari down the freeway most of the way to work, then getting out and carrying it on your head as you pick your way through city gridlock.

The most important thing about the NBN isn't its speed — even though its fibre-optic services will easily provide 1Gbps or eventually 10Gbps connections for those who need them. No, the value of the NBN is that it will raise the lowest common denominator and allow every business in the country to link with every other branch office, business partner or telecommuting employee at the same speed as they would use over their internal network. When even your remotest offices have 1Gbps access to the rest of the company, your data can live in Sydney and be backed up there, and remain instantly accessible by your remote staff as if they were sitting in the same office.

As a WAN, in other words, the NBN will resolve decades of compromise to enable businesses to implement the applications they want, where they want them, as their growth and strategy demands. Consider something like cloud computing, which is offering businesses significant promise as a way of providing access to high-end applications without spending millions on infrastructure.

Cloud computing is quickly becoming the way businesses will compute, but Australian businesses will miss out on its possibilities if they can't get reliable WAN links that are fast enough to let them participate in the cloud. The other bottleneck for cloud computing is Australia's international fibre links, but investments such as the $447 million recent Pacnet-Pacific Fibre undersea cable will go a long way towards improving that part of the equation.

Business needs better broadband and most businesses are already painfully aware of this fact. That's why the Australian Information Industry Association and industry bodies of all stripes have come out wholly on the side of the NBN, noting that it's critical for industry and business development and calling for a bipartisan approach to the network.

I shouldn't have to write this column, but the persistence of uninformed comments makes it necessary. The only people I really hear arguing against the NBN any more are those who dismiss it offhand as too expensive or useless for anything outside their own narrow home use; but they are out there, and they do vote. And if they vote for Tony Abbott and his minions, they will be voting against nothing less than the future of Australian business.

Perhaps the biggest irony of all this is that Tony Abbott's abstruse resistance to progress, in the form of his blind determination to axe the NBN, will hold back business development in a time when we really can't afford it. For a party that's supposed to be all about private-sector promotion, light-touch and hands-off policies, Abbott's Liberals seem happy to tie one hand behind the backs of Australian businesses by taking from them one of the primary things they need to succeed.

What anybody weighing in on this debate needs to understand is, firstly, that the private sector will never deliver the kind of NBN that Australia really needs; and, secondly, that the real benefits the NBN will provide lie not in its speed, but in its ubiquity. Raising the bar for all Australian business communications, regardless of source or destination, business or home use, will pay off in ways we cannot even imagine.

Topics: Broadband, Government AU, Telcos, NBN


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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  • You are exactly right with your NBN views.

    The business I work for, currently has five offices across Australia with our HQ in Sydney. We pay just over $10,000 PER MONTH for an awful 2mbps connecting these offices.

    We cannot perform centralised backups of the "remote" servers. Staff at the other offices constantly moan about the slow speed of just loading an email, sending an email, opening a spreadsheet file, browsing the web and so on.

    The amount of work, time and money I spend every day trying to squeeze just a little bit more optomisation out of our WAN is quite wasteful.
  • David, while I agree with the thrust of your argument that a multi billion dollar investment by taxpayers should ultimately deliver faster, cheaper and more ubiquitous broadband for small business, the picture today is perhaps not as bleak as you suggest.
    I refer you to this recent announcement from Telstra http://exchange.telstra.com.au/2010/05/27/better-broadband-for-business-and-why-it%e2%80%99s-important/
    Private enterprise can deliver (- and could deliver more cheaply and widely with some Govt incentives.) I welcome your support for an informed objective discussion.
    Rod Bruem
  • I find it interesting that your claim for the most improvement is for SMB's, yet how many SMB's have multiple sites let alone a need to transmit large amounts of data between sites? Does your local green grocer need it? What about the hairdressers or the local newsagent? I doubt any of them have multiple premises let alone large data sending needs.

    Granted there are businesses (like the one GTR works for) that could save a lot of money and have increased services from a national high speed network. One question that hasn't been answered is how many NEED this (either now or projected to over the next 10-15 years). By need, efficiencies can be considered a NEED as it makes the business more competitive.

    The more important question is at what COST. Worse case scenario, let's say GTR's workplace is the only one that needs the NBN. Is it right for taxpayers (you & me) to be paying in excess of $43 billion dollars (not to mention potential cost blows outs!) to have this one company connected to a superfast network? Sure- there's more than one company in real life that would benefit, but if there were so many to make it financially sound, why wouldn't the government just commission a cost-benefit analysis to shut up all would be critics for once and for all?? That's right, if they actually thought it would come back with a positive report, no government would hesitate to throw praise on themselves, but all governments want to avoid embarrassment, thus uncertainty is the best defence for an incompetent government!!

    I for one would LOVE to have a 100mbps connection at my house and work. But NEVER would i want that to come at the expense of other more important and valuable contributions that the $43billion+ could pay for.

    * Currently struggling along on a 1.5mbps service... so yes, i'm not one of the lucky few on a great 24mbps connection...
  • AWY, Your local Markets are probably connected upto servers, thus would need a stable connection anyway, not to mention any data backup's.

    And you said it yourself, your one of the lucky few that get anywhere near 24mbit, so your view is very biased.

    What about the percentage of Australians who are less than
  • The big QUESTION is - Can we afford to spend $43 billion which we do not readily have and need to borrow it?

    A sure way to run the economy headlong into quicksand.

    Vasso Massonic
  • Hear, hear.

    What really annoys me the most is when people keep harping on about the expense (as above), like we will be paying off this thing for the next 40 years. Get a grip. They are building something that will actually pay itself off. It is an investment in the truest sense of the word. It is a wholesale network that retail ISPs will buy into. Read those previous words again - buy into.

    The government could even if they wish (and there was chatter originally) sell off this asset, but of course as we have seen with selling off Telstra, this is possibly not the best idea and it should, like any true national service (Australia Post etc) stay in public hands.
  • Vasso Massonic,

    SkyNews just said, that Coalition already spending $20 Billion, 10% of that on policies. How is it any different from Labor spending money? (And this is not including any Broadband Announcements!

    On top of this, RBA Interests just been decided to put on hold.

    Low Unemployment
    Low Interest rates
    Infrastructure Spending
    Low Debt
    Low Inflation

    Your selective in your articles Vasso.

  • As far as I'm concerned, if the government can get us back to surplus by 2013 or whatever they said, then where is the "expensive, we have to borrow money to pay for it" argument coming from?

    I can understand if you simply don't believe the government when they say we'll be back to surplus by 2013. But you can't just say "we have to borrow money, and we can't afford it".

    But the other point to consider is the fact that the Libs ran the economy at surplus for years and still didn't build anything like what we're getting. If a few years of debt is what it takes to get ubiquitous, fast broadband, then bring it on! Government is not like business, it does not have to turn a profit for it's shareholders.

    I'm usually in favour of smaller government, but I do believe that certain things need to be a public monopoly: things like health care, the postal service, utilities, transport and so on. The internet is fast becoming a utility.
    Dean Harding
  • David you have been the only other person I have seen to bring up the same point I keep making, which I think is the greatest thing about the NBN and the reason why ADSL2+ is not the right technology now or ever.
    That being - that the NBN brings up the lowest denominator and makes everyone have a minimum standard of speed. HD Telepresence for medical reasons or Uni lectures (just a example) will never take off if only 4 people by the exchange can use it.
  • For someone who likes big words like "ubiquitous" it's strange that you don't know what "surplus" means! In 2013, the govt "claims" it'll be in surplus, not that it'll have $0 net debt. You do know what a surplus is, don't you. It could take decades for the Liberal Party to pay off the Labor debt. At that point could they start putting money into an infrastructure fund that could be used for something like an NBN. It took Liberal about 10 years to pay off Labor's debt last time. Given that, I'd expect we'll be looking at around 2020 before we're a net creditor nation.
    Flem Spawn
  • To each his own.

    Spending $43 billion on top of our current massive debt level is a luxury we, clearly cannot afford.

    'surplus by 2013' in the prevailing economic climate is a fairy tale.

    Broadband is different to other essential services, in that, NBN will only provide the bare essential service which would require costly enhancements affordable by only a few big retail providers to create the goodies you wrote about.

    What will happen to the traditional 600, or so ISPs?
    Vasso Massonic
  • Flem there are a few things you should keep in mind...
    -The liberal party didn't pay off a damn thing.. they used our tax dollars to do it then after that used the money to entrench middle class welfare.
    -Public debt isn't neccessarily a bad thing.. conventional wisdom is that governments should borrow during a downturn when tax receipts drop off.
    -Australias public debt is very low as a percentage of GDP however private debt is very high... It will a lot later than 2020 before we are a net creditor nation regardless of what any government does.
    -Assuming the level of debt you carry is servicable the key thing is that the what you are spending the money on is worthwhile. In this case I think an asset that will encourage growth and productivity for the next 50+ years clearly is. By your argument no one should by a house until they have saved the full amount.
  • Maybe you should re-read my post... i said i'm on the 1.5mbps plan... as in the SLOWEST broadband plan available today. So yes, i have broadband (and i don't insinuate that those without broadband available should be neglected) but those of us with even the slowest broadband can get things done. AKA i am that percentage you speak about :p

    The point was that if $43 billion+ worth of investment was worth it, the government would've completed a cost-benefit analysis... i mean it's not like they've lacked hiring consultancy firms already for the NBN... adding a cost benefit analysis would've been childs play.

    Furthermore, as far as i'm aware the $20 billion spent by the coalition is currently funded by savings aside from the NBN. Furthermore i heard a report that said the NBN (or at least the majority of it) isn't even listed on the budget. I'm yet to go through the budget papers myself (i certainly will before the election), but if both points are true - then it makes for an interesting read :D (please note- not stating this as fact; and if you've got some sources that prove or disprove either of these
    by all means reference them :D - mind you i'm picky and don't consider newspapers as legitimate sources... just good starting points
    On one hand- you have to wonder whether the liberals think labor is 'wasteful'. On the other, how can we possibly be "back in surplus" in 3 years, if they're meant to spend a significant portion of $43 billion dollars that they've yet to declare (on the budget).
  • No disclaimer from Mr. Bruem that he is an "official Telstra Spokesman"? Or in laymans terms a paid purveyor of Telstra's propagandist spin and FUD.

  • Dean, getting the budget back into surplus does not mean that the debt we have racked up will be magically paid off. Whilst we may get back to surplus by 2013, it will be many years after that to pay off the huge debt levels we've made in the past couple of years.

    I'm not against an NBN, but I think that 43 billion is excessive. It's even scarier that the real cost will be much higher, as admitted to by the head of NBN.
  • Conventional wisdom IS that governments should borrow during a downturn and typically invest in large infrastructure projects such as roads, schools or in this case the NBN. The problem is that this government spent the surplus up on pink batts and school halls, then wanted the NBN. The spending has to stop somewhere.
  • mwil19, achieving a budgetary surplus by 2013 with a possible faltering of our main source of revenue - COMMODITIES is scary business indeed. In the real world, even in our neck of the woods, retail activity is not at all hot. Harvey Norman has a store-wide 40% discount, with nothing to pay till 2014, from memory.
    Vasso Massonic
  • There are a number of ways in which you can argue the pro's and con's of the NBN debate. At the end of the day the technology shuttle has already left the platform and Australia needs to decide now whether we make a run for that shuttle or we stare up into the sun as the shuttle slowly disappears.

    Even the US Government have recently released their own plans for a National Broadband - http://www.ictliteracy.info/rf.pdf/national-broadband-plan.pdf

    At the end of the day, it is about bringing better minimum standards and minimising the digital divide amongst all Australians which, let's face it, will benefit not only our current business but the future generations of our proud nation.
    Sally Webster
  • I agree Businesses need faster connection we struggle at times especially with up loads and during peak time our rim sucks. But Being as we are rimed there is a much cheaper path to faster broadband and that is the newer versions of dsl and an upgrade of the fibre to the rim. But even if we were in need of fibre why run it to all the Mums and Dads? Why not start by rolling the system out to business areas? Wouldn't that be smarter if that is where the return is? The answer is simple to this. The voters live in residential areas and the labor party would be loathed to put in something that would help businesses so they give to to those who don't need it. and will never use it to make there supports (the Unions) happy.
  • @Nunya77,

    You link to a pdf which you says show America is doing the same thing but in actual fact they are doing EXACTLY what people who are against the NBN are saying here. Let private enterprise build the network. An put legislation and subsidies in place that will encourage them to do so. The market will decide the best form of action and for this point Tax payers will not have to foot the massive bill for something like the NBN. Remember The Liberals before the last election had a full funded plan for the bush which would have cost a fraction already have been implemented and be run by private enterprise... (not that the end of that funding has stop Telstra or Optus from providing the service anyway, we will see this competition really heat up over the next 2-3 years as Optus moves to have the same foot print as telstra and lte is released)

    In the last 3 years investment in infrastructure by ISPs has fallen because of the NBN is this good for Australia? Innovation has basically stop with bonding being the only thing which has been added to a ISP's product line up.