Donald Rumsfeld spoke about “unknown unknowns”. The Communications Chambers cost-benefit analysis (CBA) report gets rid of such nonsense by ruling it out. As Stilgherrian at Crikey says:
the key problem is the overall assumption that we’ll see a gentle, incremental growth in internet demand — whatever its rate for individual application — based on the kinds of things we’re doing on the internet today.
During a digital revolution, they seem to have missed the revolution part.
So the Multi-Technology Mix (MTM) model for the NBN will be fine, as long as you don’t want to use the internet much. Or as David Havyatt at the AFR says:
Choosing between the MTM and FTTP isn’t just about the outcome of the CBA. It is about choosing whether we want the nation to be technology leaders or technology laggards. It is about choosing whether we want to make do with inefficient government service delivery or drive it hard for efficiency and effectiveness.
The MTM simply rules out applications that could emerge in health and education which depend on a ubiquitous high-speed service, so public benefit is put at 5% of usage in the review. In truth it’s unknown with the fibre to the premises (FTTP) option, which was why a CBA always had limited value.
Stilgherrian says the model completely misses the Internet of Things, that is, the myriad devices such as smart air conditioners and light bulbs, toys and medical sensors. It assumes that such usage will fit into the cracks.
So 15 Mbps is seen as good enough for the vast bulk of users. There is no value assigned to the higher speeds a 100 Mbps would provide.
Hence the review strips away the known unknowns, dealing only with known knowns and very conservatively at that. Gentle, incremental growth in existing internet demand is assumed. It’s a case of dumbing down to the lowest common denominator.
The NBN strategic review found the FTTP cost only $8.6 billion more than MTM, a steal at the price. Yet the CBA review has inexplicably added $4 billion to the cost of FttP. Havyatt says this is problematic if not simply arbitrary and wrong.
In his blog post Havyatt points out that 70% of people connected to the NBN are opting and paying for a 100/40 Mpbs service. They are looking for speed if not volume. That’s what they want. Turnbull’s mob are taking the paternalistic view that it is not what they need.
I’m not sure of the funding arrangements for the NBN. I suspect that it is being funded on budget as an infrastructure program. Labor’s FTTP system was being funded off-budget effectively costing taxpayers nothing, against future privatisation.
All in all as in so many areas the Abbott government is dragging us back decades and compromising our future as a sophisticated economy. Think, for example, the renewable power industry and their passion for coal. Labor’s positive legacy is being destroyed with vigour and enthusiasm.
See also Deja vue all over again: the new NBN.