The Liberals say their wireless-based NBN is cheaper and faster to build than Labor's fibre. What they do not say is that their policy would nationalise our 4G wireless spectrum, derail private investment in 4G networks, and force rural Australians to suffer the status quo until at least 2014.
The Coalition's broadband policy relies heavily on the use of wireless technologies to service regional areas with 12Mbps broadband. However, the party's chronic confusion over various wireless standards, and a reliance on currently unavailable radio-frequency spectrum, means that those regional areas won't see any new broadband until 2014 at the earliest and that an Abbott government could kill off the entire private-sector market for 4G wireless in the process.
Smith nervously shifting in his seat(Credit: YouTube)
Politicians and onlookers have regularly confused the differences between Wi-Fi, 3G broadband, WiMax and Long Term Evolution (LTE) technologies — all of which are wireless but not all of which have the same performance characteristics or usage models. Malcolm Turnbull, for one, committed this egregious error when he held up his iPad at the weekend internet filter forum, and said the NBN was outdated because all people are interested in these days is mobility.
That may be true, but there hasn't been an iPad, iPhone or smartphone yet invented that can connect to the WiMax or LTE networks the Liberals are relying upon. The party's formal broadband policy document makes the same mistake, citing the rapid takeup of wireless broadband in recent years as proof that they are a substitute for fibre-optic services.
Those wireless broadband services, of course, run on existing 3G mobile networks, which are already struggling to cope with the burden placed on them by millions of smartphones and iPads. High latency and suboptimal speed make those networks fine as complementary internet services, but they're far from ideal as the primary internet services into fixed properties.
Furthermore, they exist in a market space that is totally controlled by Telstra, Optus, and VHA; unless the Coalition is planning to subsidise the expansion of existing 3G wireless networks and use them as the basis of their expansion, they should stop talking about today's wireless broadband like it has anything to do with their future vision.
Better wireless, and its problems
Another practical obstacle is latency: as anybody who has ever actually used wireless broadband knows, latency over wireless is much higher than over landline connections. You might be able to get used to it on an individual basis, but when you start adding more users in a single premises, or try to do anything more complex than basic web surfing, the delays quickly accumulate.
Today's web pages, and tomorrow's online applications, require a growing number of back-and-forth web queries, and each one of those queries introduces its own latency when run over wireless. Add them up, and you've got one long series of delays. Put a small business on your typical wireless connection in the morning, and they'll be pulling their hair out in frustration by lunchtime. Throw in a networked server trying to do a remote backup at the same time, and they'll put up the CLOSED sign and go home.
Smith's [plan to] 'quarantine' the 'digital dividend' spectrum proved... the Coalition's policy is one of total inaction for the next four years.... Rural and regional residents will have to make do with whatever broadband they have now until at least 2014.
True, next-generation LTE technologies have a flatter architecture that reduces overall latency to something that only falls feet, rather than miles, short of that on a fibre network. But LTE has its own problem: namely, that it's not going to exist in Australia until 2014, when the analog TV switch-off releases "digital dividend" wireless spectrum for other uses.
The same problem plagues WiMax, the 12Mbps alternative about which Smith is actually speaking (although it's not clear whether he knows that); There simply is not enough free spectrum out there to build a national network footprint of the type the Coalition is depending upon.
Tony Smith showed his total ignorance of these issues during this week's debate, getting flustered when Stephen Conroy rightly asked him over which radiofrequency spectrum the Coalition's big wireless network was going to run. Smith's answer, a desperate throwaway that he would "quarantine" the "digital dividend" spectrum, proved only that the Coalition's policy is one of total inaction for the next four years.
Yes, four years. Under a Coalition plan, the first wireless broadband services will be hooked up until after the next election. An Abbott government would be able to do exactly nothing — zero, zip, zilch — to roll out wireless broadband in its first term in government. Rural and regional residents will have to make do with whatever broadband they have until at least 2014; in the meantime, the Coalition will focus its spending on patching up broadband blackspots where ADSL2+ services are currently substandard. That's hardly the kind of policy to merit a ringing endorsement, and you'd think the Nationals would be spitting chips over it.
Even when the wireless services become possible, they will come at a very significant cost: competition itself. After all, Smith confirmed that the Coalition's nationwide wireless broadband policy is based on the idea that the government will take over what would have to be the entire 126MHz of digital dividend spectrum: much less, and there's no way they could even contemplate servicing an entire town.
The thing is: the mobile industry is counting on this spectrum being auctioned off so they can build the next generation of LTE mobile services. If the government moves in and "quarantines" this spectrum for specific uses, carriers will lose a key competitive weapon and the Liberals will have introduced a serious disincentive to wireless competition.
Losses from this action — direct, from the loss of billions in licensing revenues, and indirect, from the opportunity costs of stifling proper private-sector competition in the 4G wireless space — would be absolutely massive. The policy is like buying up houses through a suburb to build a highway, then charging the residents with picking up rubbish off the nature strip. Most of them will simply move elsewhere.
The devil in the details
Then, there are the practical issues: as a shared spectrum topology, wireless is a shared resource and trying to service an entire town using a finite amount of spectrum is always going to present its own issues. You may be able to alleviate things by adding more towers, but both Abbott and Smith were absolutely devoid of ideas as to just how many towers they might need to set up to fulfil their dream.
The government will take over what would have to be the entire 126MHz of digital dividend spectrum ... but the mobile industry is counting on this spectrum being auctioned off so they can build the next generation of LTE mobile services.... Carriers will lose a key competitive weapon and the Liberals will have introduced a serious disincentive to wireless competition.
The answer, of course, is: quite a few. And these towers don't come cheap, nor does the backhaul to connect them. The Coalition's inability to explain details of its towers strategy suggest that aspect of the policy has simply not been considered. Abbott and Smith expect the market to take their word for it that the roll-out will still be cheaper than a fibre-optic NBN, but have no numbers to back their arguments.
Tony Smith knows this: he seemed embarrassed, and shifted in his seat several times when Stephen Conroy raised perfectly reasonable questions about the wireless plan. Despite his entreaties that the Coalition will take "a proactive approach to spectrum", Smith conceded a significant shortcoming of the Coalition's broadband policy: that it's putting all its hopes for broadband equality on the supposed promise of a relatively low-speed technology that won't be available for years.
That is, however, a distinction that seems to be lost on many others, who seem perfectly happy to shout from the rooftops that the fixed NBN is a waste of money because all anybody wants these days is mobility. This is an egregious lack of understanding around wireless and it comes not only from politicians but from all over the place — in online forums, public debates, chats I've had with friends and relatives and people on the streets.
Sure, mobility is important. But it is rightly a complement to, and not a replacement for, fixed internet services: as long as we live in houses and work in offices, we're going to need fixed broadband. If you're one of the people that thinks the NBN should be scrapped to focus on mobility, just take a moment to think about how your school, or your workplace, or your local council, is connected to the internet. If you think it's over wireless, you're wrong. And if you think it could be, unfortunately, you're wrong again.
So is the Coalition. Its policy says we get good enough broadband over copper; common sense and everyday experience says this is utter rubbish. The Coalition wants to stop the country's roll-out of future-proof fibre to put regional broadband on hold until four years from now, when it will start trying to roll out a nationwide footprint based on a technology that has never been used at the scale the party is talking about.
Common sense says this is a risky bet with massive opportunity costs; by 2014, after all, the fibre NBN will be half built and will have connected most regional areas if NBN Co pursues an outside-in build. Risk-averse observers need to consider all the implications of the Coalition's wireless policy before buying into it and consider that, no matter how good mobility is, it will always only be a complement to future-proof, effective broadband services that can connect all of Australia without interfering in and destroying our highly capitalised, massively successful wireless industry.
This is the first in a series of seven election rants, one for each deadly sin, aired each business day until the big day.