Would that they were.
Paul Budde has urged the government to press the reset button on the NBN, as short-term and longer-term faults and complaints affect up to a third of connected customers and large numbers of premises are being put in the too hard basket for connection.
One man was without a phone or internet for four months, and only got relief after media involvement. Then he got relief by being reconnected to the legacy service he had left, which is against the rules.
Now the government-commissioned Australian Communications and Media Authority review of “NBN customer experience” is not going to consider that particular solution, because, well, it’s against the rules.
- It’s well understood that digital infrastructure is essential if education, healthcare, government services and e-commerce are to keep up in future. Digital services are taking enormous costs out of our economy, and are essential to keeping these things affordable.
But it also 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 out on a plan that does not deliver this ultimate outcome is doomed to fail.
Before you say, everyone will just use their mobile phone, Budde has taken a look at 5G at John Menadue’s blog. Quite simply, 5G depends on a quality fibre optic network backbone and won’t work more than 100 metres away from it. Even a person standing between a 5G user’s device and the network antennae is a problem.
- For starters, there is still not a 5G standard and this is essential for vendors to provide devices for mass markets in order to deliver an affordable device. Totally new handsets are needed to facilitate the multiple tiny antennas that are required in order for the device to operate over the high frequency necessary for 5G. No mass market will be achievable without a standard for such devices.
Budde says that only fibre to the home (FttH) will future-proof the network and provide Australia with the best infrastructure to further build its digital economy and digital society. He told Malcolm Turnbull this in 2013. Turnbull agreed that FttH would be necessary eventually, but it was too expensive first up.
Budde says the government should have taken all the national benefits into account in calculating its return on investment, then thrown in enough to get it started as a non-recoupable investment in the future of Australia. Now we are stuck with largely using and having to maintain the old technology. He says:
many engineering experts indicated back in 2012 and 2013 that, based on international developments, the costs related to FttH would decrease by 30-40 per cent over the following five years. Looking at FttH deployments in New Zealand, Britain and the US 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.
Apparently New Zealand threw in a few billion and then worked with its equivalent to Telstra to build a FttH network. Now they are sitting pretty.
Apparently Stephen Conroy put this to Telstra at the outset, but Telstra refused.
Now NBN prices are set on the high side, to get the mandated return on investment of 7%.
Budde is suggesting that our initial investment, which is off-budget because of the plan to eventually privatise, be written down to make the whole thing viable. However, that would involve bringing the NBN on-budget and increasing debt. Matthias Cormann has ruled this out:
- “The government is not considering a writedown of its investment in NBN and there is no basis for such a writedown,” he said.
“The government’s investment in NBN can only be written down in accordance with the requirements of accounting standards. “These standards require there to be evidence that the investment should be written down and do not allow this be done at the government’s discretion.”
You would think the government could legislate its way around this difficulty. Clearly it doesn’t want to. Remember the LNP pilloried the NBN as a white elephant and mainly good for downloading videos. Now that it is seen as essential infrastructure for the digital future, a double back-flip with pike of the kind that Peter Beattie mastered as a political skill would be in order.
At present we have a large flock of retail providers offering low-ball speeds and prices to make a quid and gain a market foothold. Ian Martin of New Street Research says in the AFR that low monthly prices will only return 50-60 per cent of the revenues NBN needs to break even. What we need is NBN itself out there directly facing end user demand, developing, promoting and selling the products needed to justify its investment. Products that use big data and high speeds.
That won’t happen, of course, too much like a monopoly, and Martin says that tinkering with pricing is not enough. He reckons that instead of selling monthly band-width for retailers to on-sell, the NBN should sell multi-year capacity plans, which would effectively give the retailers skin in the game.
Of course only substantial companies would have the resources to take the necessary risks, which would wipe away the tiddlers. Frankly three or four big ones going hard at each other may yield a better result than the current mess. The current inquiry will be looking at 21 entities in the NBN universe.
There is another problem largely unaddressed with upload speeds. John Davidson in another AFR article What a bunch of ding dongs! Here’s why the NBN is far worse than you think reckons the internet has come to his area, but although he hasn’t connected yet upload speeds have fallen by two-thirds in the area. Unless we get good upload speeds, the Smart Home or The Internet of Things, call it what you like, won’t work. As a professional gadget reviewer, he says:
- Who on earth would buy an internet doorbell that doesn’t tell you who’s at the door till after they’ve left?
You’d have to be a ding dong.
My suspicion is that in large part we went wrong when Tony Windsor and Rob Oakeshott did a deal to get the provinces connected first. We should have connected the city slickers first and built out from there, enabling a decent revenue stream. If the NBN was to be commercial they should have acted commercial, not political.
Meanwhile Budde doesn’t see us climbing up the international broadband ladder any time soon from where we sit at about 50th place and behind some developing countries.