Opinion editorial for the Australian Financial Review
There are now overwhelming signs that all is not well with the NBN, through its ACMA intervention the government now also admits that all is not well.
ACMA will investigate the war that is going on between the nbn company and its customers, the retail service providers (RSPs). Furthermore, there are large numbers of premises that are being put into the too-hard basket for a connection to the network. And perhaps as much as a third of premises that are connected are having short- and long-term connection problems.
These issues are now being even being discussed in those media outlets that supported the changes this government introduced to the original NBN. The problems all directly relate to the change from a plan based on a future-proof all-fibre infrastructure to one that largely depends on using the old existing telecommunications infrastructure.
In my discussions with the Prime Minister during the 2012/2013 period, when he started to flag the change in policies, he clearly indicated that he also saw fibre-to-the-home (FttH) as the ultimate solution.
However his argument was that we couldn’t afford it – the costs were simply too high.
My suggestion was that if that was the case then perhaps the investment should be spread out over a longer period, but we should stick to the FttH technology, as it is future-proof and will provide Australia with the best possible infrastructure to further build out its digital economy and digital society. Furthermore the government should also take the national benefits into account in calculating its return on investment, this would significantly reduce the affordability issue that is at the core of the current NBN war.
It is well established that as a modern country we need to transform our economy, healthcare system, education system, government services, etc. And digital infrastructure is essential for that transformation. As we already can see, digital services are taking enormous costs out of our economy, and it is essential, especially for the above-mentioned sectors, to keep these services economically and socially viable.
But such an environment requires infrastructure that has enormous capacity, is highly resilient, has plenty of redundancy, is reliable and affordable, has low latency, and is ubiquitous. The only technology that fits this bill is FttH. Therefore starting on a plan that does not deliver this ultimate outcome is doomed to fail.
The role of government is to provide the vision for the country in relation to the role digital infrastructure will have to play in our economy and society – what role does it play in e-health, e-education, digital government services, e-commerce, etc?
Once this vision has been formulated it should then be handed over to the technology experts to select the technologies that are needed for this, and it is these experts who should design the infrastructure. Based on their costing models, time planning estimations can be added to it. So far we have been doing all of this the other way around.
The experts should be selected according to their skills and not their political persuasion. They should look at what other countries are doing, study their plans, seek collaboration and sharing of knowledge and insights. For example, many engineering experts indicated back in 2012/2013 that, based on international developments, the costs related to FttH would decrease by 30%-40% over the following five years – and looking at FttH deployments in New Zealand, UK and USA this prediction is on target. At the same time the costs of maintaining old infrastructure will go up, as a large part of these costs are labour-related.
We are now starting to see that the cross-over costs points between old technologies and new technologies (FttH) are within reach. We are not quite there yet but certainly over the next few years this will happen. At that point in time Australia will be left not only with technology that is out-of-date but also with a network that will, on an annual maintenance cost basis, be more expensive.
So while countries with FttH networks will see their retail costs going down, Australian users will see theirs going up. The nbn company is already struggling with its financial situation and this will only get worse with time.
As the network is a patchwork of technologies it will be impossible to provide a ubiquitous level of service quality needed for commerce, entertainment, healthcare and education; and this will hamper innovation and other new economic activities because organisations will not be able to deliver the necessary high-quality services to all Australians. There will be a sharp divide between those with high-quality broadband access and those with poor access.
It is never too late to press the reset button. The only solution is to take politics out of the equation and base decisions on a sound vision from the government on where it sees Australia’s digital future in relation to the services it will need to provide.
Then leave it to the engineers to develop the technologies that are needed for this.
Paul Budde