Crossroads: NBN & the future of Australia’s digital economy
Australia’s digital economic future is all tangled up in red tape as corporations and the government fight over the infrastructure that will facilitate all of it.
Australia’s broadband speeds have dwindled to 40th place globally, with just 38 per cent of Australians connected at speeds higher than 4Mbps.
And the future of Australia’s technological infrastructure rests on the agreement currently in negotiation between Telstra and the government.
This all came along because Aussie telecom TPG discovered a legal loophole in the Telecommunications Act which states that companies with fibre already in the ground were entitled to connect properties located within one kilometre of said fibre, effectively side-stepping the NBN and providing their own proprietary fibre direct to customers or resellers.
After years of dragging their feet on fibre-optic broadband, companies such as TPG and (presumably Telstra, which is keeping quiet until its negotiations with the government cease) want to end the NBN’s monopoly on the Telecommunications Sector. TPG even argued to the government’s broadband cost-benefit panel that it should be able to build out its fibre network around the NBN in competitive areas.
“Infrastructure-based competition delivers the best outcome to end users. The NBN was not intended to be a fixed-line monopoly, and it should not be a fixed-line monopoly. Carriers (other than Telstra) who had invested many hundreds of millions of dollars building ‘superfast’ networks prior to 2011 were, and should remain, permitted to make use of those networks to compete with the NBN and other broadband providers,” TPG said.
This puts both the government and Telstra at an interesting crossroads.
On the one hand
TPG has already stated its intention to provide fibre-to-the-basement broadband to 500,000 homes, more if its submission to the government is successful. If TPG already has fibre in the ground, why shouldn’t consumers be able to benefit? It could be argued that an NBN, Telstra and NBN model could result in more competitive prices and more choice for consumers.(I reached out to TPG to find out potentially how many homes are within a one kilometre radius of its fibre, but it declined to get involved). According to Macquarie Telecoms executive Matt Healey that number could be “shitloads”. Healey and his company is petitioning the government to close the loophole and allow the NBN to democratise the telecommunications market.
On the other hand
The NBN was built with the intention of defusing Telstra’s monopoly on broadband, acting as a single wholesaler for any telco who wishes to purchase its fibre and negotiates individual rates based on the companies it does business with, levelling the playing field and acting as an artificial stimulant for competition.
But then you also have to consider
Isn’t acting as the national wholesaler of fibre broadband stifling any true competition by deciding how Australians receive their internet connection for the foreseeable future and inflicting steep fees and taxation to cover the costs of building the network? Yes the market has been dragging its feet on fibre but now that the government has stepped in and forced its hand, should the government consider giving the country what it wanted all along? A truly competitive broadband market?
There might be an alternative
What if Telstra, TPG and the NBN come to an agreement to provide a patchwork of coverage across Australia cross-subsidising each other in order to provide low-cost high-speed broadband to areas that have been without internet or without fast-enough speeds needed to do business online?
The CEO of Macquarie Telecoms, Matt Healey is calling for the Telecommunication Act and Competition Acts to be updated and for the legal loophole to be closed.
“There are a number of ways to solve it but something has to give,” he told Techly. The NBN is important. It’s a National broadband network. The only way it’s going to be national is if there’s only one of them. If someone else is trying to cherry pick Sydney, Melbourne, Perth, Adelaide by getting all the high-spend customers quickly on to their network and lock them away from the NBN it will fail.
“The NBN needs the revenue from downtown Sydney where it’s quite easy to provide broadband quickly to help subsidise the broadband costs of regional and rural Australia. The national bit is really important because it allows subsidies between city and bush, paying for higher cost of the regions. Also there’s the idea that everyone in Australia has similar quality of broadband as well so you can un-tap regional markets ensuring they have online businesses in the regions and move away from a model where businesses are shutting down and replace them with a 21st century digital economy.”
As for the government, well its also in a tricky position ideologically.
It’s an anathema for the Coalition stop the private sector from doing anything because the government wants to do it. The ethos of the party is that the private sector should do everything the government can’t. But it’s already put in a down-payment. So obviously it can’t turn its back on that investment.
But outside of politics, what is the best cost-benefit for consumers?
It’s clear that as the mining boom comes to an end a vacuum will be left in the economy. It makes sense that Australia could be a key economic player in the Asia / Pacific region that is already heavily invested in telecommunications technologies.
Wireless infrastructure is poised to generate US $52 billion in revenue globally this year, according to a report by Signals and Systems Telecom. (Though the same report predicts a two per-cent downward shift in wireless innovation investment, which could potentially have to do with government and corporate cynicism when it comes to investing in broadband infrastructure for the future, an assertion that is purely mine).
The fact is when Tim Berners-Lee published the world’s first web page in 1985 he couldn’t have forseen the importance of that moment and how the internet was going to govern the way we live our lives.
But now the internet is moving at such a rapid pace that is receiving more data daily than it knows how to intelligently display. Back then we couldn’t have known what the internet was capable of. But now we do, precisely. Thanks to the internet everything is measurable and I think it’s about time we start to measure the restraints Australian infrastructure cause to the economy which is changing in a number of ways:
- There’s a shift towards outsourcing.
- An increase in part-time / casual or contract positions and a shift away from employed full time work.
- A manufacturing industry that is on its last legs.
- Capital cities that are over populated.
- Regional and rural areas that are under populated and under serviced.
It stands to reason that a national infrastructure, whether national, or private or both, is essential in driving economic alternatives so that regional areas can begin to act as self-sustaining satellite cities. And you need the infrastructure to allow people to get to and from places within ease at all times of the day or night, as the shift away from full time and towards part time work changes the pace of a modern city.
It all comes down to this: The fear of outsourcing constantly looming over the Australian economy. Workers need to be able to move shit and communicate about shit efficiently. And they need to be able to create forms of employment that doesn’t involve building shit or taking shit out of the ground. Far from connecting people globally in this unique situation the internet would wire up Australians locally in order to be a more self-sustaining economy.
We have no more excuses to continue to ignore the internet as an invisible and unimportant second-economy.
We have the facts and we should be sticking to them. Extract the data about our cities both regional, rural and inner-cities and allocate accordingly.
I reached out to TPG for a comment and a request to interview CEO David Teoh but a spokesperson declined the requests. Telstra was also unable to fulfil my request for comment within the required time frame. Communications Minister Malcolm Turnbull did not respond to my requests for comment.