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Connectivity, Opinion

NBN – the largest ever government-funded project

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Peter Thompson
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On 7 April 2009, the Labor government announced the National Broadband Network (NBN), the largest single capital works project  in Australia’s history. It’s started, it’s being built, it’s coming. The question I need to ask myself is: why?

When I first heard about the planned infrastructure development, like many others, I had to ask myself the question: “Is our current internet so bad that our government needs to make the largest capital investment in the country’s history to make it better?”.

What are the reasons behind the NBN project?

I understand that “the internet is the future”, and, as we want to position ourselves as a knowledge-based economy, we need exceptional connectivity. However, I fail to see how our current internet infrastructure is so broken that we need a $35.9 billion fix. It seems there are some more issues at play here than just a faster internet connection. I can’t help but think that this is more an issue of the government spending tax-payer money for the sake of spending money. It seems more of an expensive marketing stunt rather than providing a genuine improvement to a system that needs fixing.

The idea has been kicked around in political circles that we need to be keeping up with some neighbours in Asia, like South Korea, about being on top of internet speeds and connectivity. If this is the goal of the Labor Party, fine, I just believe that a FTTH network infrastructure is not the answer. Current technology trends are becoming ever more mobile-based. If our government wants to spend tens of billions of dollars on internet development for our future, why not actually analyse the trends, look toward the future and choose a technology that is focused on what we will be needing in the future, which seems to be increased mobility. Most of us have wireless routers at home and the number of our mobile devices are increasing. In that case, why not increase wireless connectivity instead of wired speeds?

Will the NBN actually be beneficial for Australia?

The NBN will be more expensive than the current costs of broadband even though all we get is faster broadband. Bonds have been sold with a 7% expected return on investment, but are people really willing to pay for increased speeds? In the phase 1 Tasmanian pilot rollout, only 10.9% of people actually opted to use the service. If less than 11% of our population is willing to pay for increased internet speeds, is this really a benefit for all of Australia? What are the metrics used to measure the success of this project? Whatever they might be, I’m sure that 10.9% of the population is far below any acceptable KPI. Perhaps the Labor Party is just hoping that Tasmanians are slow to adapt and not an accurate representation of the rest of Australia.

Don’t get me wrong, I have no problem with faster broadband for businesses and consumers and better access for remote communities with poor service but, I also struggle to understand how the government sold Telecom and many shareholders made a small return on their investment, and then they turn around and decide to create a new “Telecom”. Why? In any case, from what I see from all that is going on with the NBN, I can really only draw one conclusion – There must be some pretty good sales people working in the government!

♦ End

About Peter Thompson

Peter Thompson
Peter Thompson founded GCOMM in 1996. He received his Bachelor’s degree in Software Engineering/Information Systems from Griffith University and his MBA from Nyenrode Business Universiteit in Holland. He believes in building great teams of people, both in business and socially.
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