It is great to see that the Government is finally backflipping on its denial on fibre optic networks. It has announced a $3.5 billion plan to bring fibre deeper into the neighbourhoods. The overall costs of a full upgrade have been estimated at around $16 billion.
What the Government plans to do is to bring fibre to those neighbourhoods currently connected to fibre to the node network (FttN), but only run it through the streets. The next step will be the so-called lead-ins from the street to the individual house, but this will only be done on a demand basis. This is achieved in a similar way in New Zealand and the UK.
Furthermore, NBN Co will work together with states and cities to roll out fibre networks in regional towns. We have seen that many cities are looking at technologies to create so-called smart cities or gigabit cities and for that, a fibre optic network is essential.
In all, 75 per cent of the country will be within reach of fibre optic connections. Furthermore, it will also upgrade other parts of the network — the fixed wireless and satellite users are not covered in this upgrade.
This residential plan followed on the announcement of a $700 million package to bring broadband fibre to more than 700,000 businesses in 240 “business fibre zones”. Businesses with speeds of up to one gigabit per second is very welcome indeed.
Fibre into rural areas is especially a great boost for economic viability for businesses operating outside the metropolitan cities. The current COVID-19 crisis is shown how important it is for businesses to be able to operate digitally as well as physically. The announcement includes 85 business fibre zones located in regional areas.
Up till now, fibre optic networks were not available in these areas or where they were available, at costs that are far too high for small and mid-size organisations. The initiative will also transform the regional zoned pricing structure.
As mentioned many times before, technology is only half the answer — affordability is as important. For businesses, the promise is to reduce wholesale pricing by up to 67 per cent for businesses in zones operating outside metropolitan centres. CBD-equivalent wholesale pricing will be offered across all business fibre zones, promising business-grade services to become more affordable in the regions. It will also boost healthcare and community facilities that are often also situated in these business precincts.
The question will be how access to the fibre optic service will be made affordable for residential users. So far, the wholesale price charged by the NBN company to its retail service providers is such that truly high-speed services are not affordable to the majority of residential users. So, this is still an area under contention.
The actual implementation of the plan has still a lot of questions attached to it and will need to be nutted out with the industry and also with other parties such as the states and various cities involved in upgrading their infrastructure. Nevertheless, the Government has indicated that it will finish the infrastructure before the end of 2023.
We had a decade of denial from the Government that fibre networks were not needed and they instead used fear, uncertainty and doubt. After arguing that there was no demand for it, that is was not needed and that it was too expensive, the Government has now finally conceded that the future of communications must be based on fibre optic networks.
The current COVID-19 crisis clearly shows the importance for good quality broadband and it has been argued that as much as a quarter of Australian households are having quality problems, so the promised upgrade will be very welcome for those users in particular. We will all need the best possible network both for social and economic reasons.
The current pandemic, the recent bushfires in Australia, California and, perhaps most worrying, Siberia as well as floods and droughts are going to intensify over coming decades. More pandemics are another possibility we need to prepare ourselves for. If it is politically not possible to address these issues aimed at reducing these risks, the only option is to be better prepared and to become more resilient.
A proper fibre optic network with sufficient capacity to keep the country going in a time of such calamities should be high on the political agenda.
It looks like the Government has stepped over its ideology hurdle to deny fibre optic as the future for the NBN.