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.
“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.” (my italics)
For many users, especially in the regions, 15 Mbps might be heaven compared to their present service. But it is hardly going to carry us into the future.URL sites will always keep adding data to their sites as they can. e.g. so many videos are embedded just in a mundane news story. As internet speeds in crease, it provokes an increase of data content. Fifteen Mbps might sound good now but in just a few years would might be analogous to “dial-up” of a few years ago.
There is another blight associated with the NBN. That is the blight it has cast upon interim investment in broadband technology. Why would a company invest in new technology knowing that the NBN would eventually lurch into their area and probably render their investment worthless? Any investment in the meantime would reasonably be made to satisfy growth in demand and perhaps to be “NBN ready” but capital to raise standards in the interim period is fraught with risk. The uncertainty associated with NBN roll-out times and dates exacerbates the problem.
Good one, Brian and Geoff. This is the 21st Century version of the three different (well, actually 4) railway gauges that hindered economic development in Australia.
So what do we call the decision-makers? Slow learners?
Geoff, you said
My oath! My service, out here in The Bush, has gone from 3 bytes/week to 3 bytes/day. Wow!
The service is still inferior to what I experienced in the backblocks of Central Europe almost a decade ago. Yeah, I know, Australia is still the Clever Country and Queensland is still the Smart State and privatization will always make everything wonderful; the Easter Bunny and Santa Claus told me so.
Geoff, you also said
Given the rapid rate of innovation in the world today, it wouldn’t be too long before cheap and effective alternative systems became available to fill the vacuum left by the semi-demi-hemi-NBN. How would the government and its business buddies respond that threat to all their investments in antique communications? Outright ban – that’s a given – but when everyone bypasses and laughs at a ban on importing such alternative systems, what will they do then? It seems that the proverb “Do it once, do it right” is unknown among our wonderful decision-makers.
Welcome back, Geoff!
Waiting for the roll-out has its frustrations, and Turnbull’s MTM is supposed to be faster, but so far it has slowed everything down while the system is rejigged and consultations with Telstra have to be done all over again.
Graham the boffins say you can’t send anything faster than the speed of light. People say that everyone wants everything on their i-phone or tablet. but sending stuff down a tube is way more efficient than praying it out into the air.