National Broadband Network

The federal government’s announcement that they will fund the building a National Broadband Network at an estimated cost of $43 billion is the sort of story guaranteed to get internet sites and net nerds buzzing with comment.

A lot of the comments from bloggers and twitterers that I have seen thus far seem to be quite positive.  Even though I get about 90% of my information through the Web, I’m not really across all the technology issues. 

Of course one doesn’t have to understand a technology to be able to use it, and as both a user and a follower of policy debates, I have mixed feelings about this announcement.  The decision to provide fibre direct to the household, avoiding the need to use Telstra’s connections to homes, should dodge some significant problems.

I have long believed that investing in the top of the range telecommunications infrastructure is an important pathway to improvements in economic efficiency and opportunity, education and service delivery, especially to regional areas. Getting internet speeds in regional and (some) rural areas which match those in the capital cities will go a long way to making it more feasible for people to move to or stay in regional towns.

However, I am wary that a large scale, long-term project like this may end up being out of date not long after construction of the network is finished.  This article by Peter Martin back in June last year highlighted the risks of large-scale spending on major technological investments.  He uses the example of Canberra’s Black Mountain tower. It was originally built as microwave transmission facility but “Within years of its opening in 1980 it was out of date.”

His view is that “anyone who specifies a particular technology ……  is highly likely to find that it is superceded or made redundant by the time it is built.”

However, while that is a risk, it seems clear that the private market isn’t able to deliver a high speech broadband network with anything like the geographic reach and speed that is proposed with the government’s new plan.

Given that the private sector is not able to construct a similar level of communication infrastructure under the current telecommunications law, it is necessary for the government to step up to the plate.  While there may be some risks in the government’s approach, Australia cannot continue to limp along with the woefully inadequate broadband that most of us have to endure.

ELSEWHERE: Most of the coverage of the plan to date has been very positive, although some are suggesting it may be difficult to raise the suggested amount of money from private investors.  Michelle Grattan says it is “either a stroke of ambitious brilliance or a rash extravagance that might be impossible to implement”.

Meanwhile, the Coalition are in strife again over it, with Nationals’ Leader Warren Truss backing the criticisms made by Malcolm Turnbull and Nick Minchin, while the Nationals’ Senate Leader, Barnaby Joyce, and his colleague Fiona Nash saying it is a good plan similar to one they put forward a few years ago.

More at PollieGraph, John Quiggin and  Larvatus Prodeo.