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National Broadband Network: backhaul « Previous | |Next »
September 27, 2010

When I was down in Victor Harbor on the photo shoot last week I noticed that NextGen had begun the National Broadband Network's regional backhaul build to Adelaide. This part of the Regional Backbone Blackspots is due to be completed by March 2011.

I realise that backhaul for an FTTP is not sexy, but it is necessary. Currently, Telstra's stanglehold on backhaul means that everything slows down to crawl after 3pm, you cannot access ADSL 2+ due to the very high amounts of congestion. The download speeds really drop. Consequently, Suzanne finds it difficult to work from the weekender with a VPN connection when other devices are connected to the internet. Phone/video call’s are out of the question.

There must be thousands of businesses in regional Australia that have the same problems and if they are struggling, then they aren't competing properly, wealth generation is inhibited and job growth hamstrung. The internet is now intrinsic to media and communications, entertainment, politics, defence, business, banking, education and administrative systems as well as to social interaction. Telstra's efforts go into protecting its price gouging, legacy business rather than providing a modern, reliable service.

Australia’s NBN is the big daddy of public broadband plans around the world. Telstra, the incumbent, in principle, is now inside the tent.

The poor backhaul infrastructure is the consequence of market failure. Market failure is what News Ltd overlooks in its relentless attacks on National Broadband Network, its astroturfing of broadband wireless and its vested interest in a one way information delivery from them to us.

It is rather ironic that greater emphasis on the regional elements of the NBN was first promoted by people such as Barnaby Joyce, Fiona Nash and others within the National Party, but these people have now been totally silenced by the 'kill at all cost' attack from their Liberal partners who see it as an opportunity to wound the Gillard Government.

Yet, as the UN Broadband Commission for Digital Development Platform for Progress report highlighted, high speed broadband is essential infrastructure for the digital economy. It states:

To achieve the best results, broadband needs to be coordinated on a countrywide basis, as a national broadband network (NBN) — which, in order to optimize the benefits to society, can also be an open network to which service providers have access on fair terms, regardless of who owns the infrastructure. Eventually, this can lead to broadband being considered as highly advanced and essential infrastructure, similar to electricity and water distribution networks.

Broadband, in the form of an open-access fibre-optic network complemented by rapidly-evolving wireless infrastructure for convenience, is an enabler of economic and social development. It enables the provision of a wide array of services in areas as diverse as public health, education, commerce, smart electricity grid, and climate monitoring.

Knowledge is now the very engine of economic growth, public policy, business practice and the informed citizen, not to mention the sophisticated consumer, in a ‘knowledge economy,’ ‘information society’ and ‘media culture. We are experiencing a reordering of the field of knowledge as a whole--creative destruction--- and a questioning of older forms of knowledge.

| Posted by Gary Sauer-Thompson at 7:44 PM | | Comments (4)


In the increasingly sterile and partisan debate about the NBN there is rarely any mention of the digital industry, which estimated to be worth $19 billion, and includes software, computer games, digital videos, websites and animation.

Creative Australia does not appear to exist for the critics of the NBN.

The development of the internet is increasingly driven by its users. YouTube, Facebook, Twitter, Flickr and many other emerging applications are shifting the way we express ourselves, communicate with our friends, and even engage with l politics.

The creative industries are seen as the arts or the high cultural sector. The core of the ‘cultural industries’ are the creators of pure art and culture. Moving out from that are layers of associated services and derived value industries that are ultimately ringed by the purely commercial aspects of the industry. In this model the cultural/creative core creates the value that others parts of the industry exploit.

Many would see the creative industries as essentially a political movement bent on rent seeking or rent protection. There is no a priori reason to favour these industries with special treatment.

One criticism of the NBN is that it is being undertaken by the government when it should be left to private enterprise. So the issue is reduced to government v market even though the commercial reality is that no Australian telco is willing to invest in, or build a wholesale fibre-to-the-home broadband on a national basis.

Turnbull's argument is more sophisticated. He says that:

The NBN is not a public good, like a school or hospital, provided (essentially) free of charge to the public. It is a commercial business which will charge for its services. The Government has held it out as being so commercial that the private sector will want to invest in it and in due course buy it from the Government at a price that will recoup the Government’s investment.

He adds thatthis is not a case of my characterising a non-commercial government project as a commercial one, rather it is the Government that has claimed it to be a thoroughly commercial project. It is important to bear in mind here that almost invariably telecommunications networks (including optical fibre to the home networks) are built by the private sector as commercial projects. He adds:
t is not a case of the Government doing something the private sector would not do (provide free school education) but rather it is doing something which is almost invariably done by the private sector in developed economies.The NBN is a case of the Government going into business. So we first need to see the full financial model for the NBN, we need to be able to debate and test the assumptions on which it is based and in particular the assumptions relating to market penetration and the average revenue per user expected.

So he is arguing for the need for rigorous cost-benefit analysis of Government projects. Does that include roads?