Following up from my earlier post on Labor’s broadband plan, I have got a hold of their actual document. It is no stronger on details of the actual plan than the news reports. Still $4.7b designed to give 12Mbps ‘true’ broadband to 98% of homes in a public-private partnership. It will be fibre to the node. I will follow up later on whether such PPPs as they are called are a good idea. For the moment, I want to deal with the background to Labor’s policy: why they think all this is required and the justification they give. Basically, they are perpetuating lots of myths about what ‘true’ broadband can really deliver.
True versus basic broadband
The Labor proposal is about true broadband rather than basic broadband. Basic broadband is between 256Kbps and 1Mbps and is what most of us already have or will get through the current government’s policies. There is a ton of evidence that basic broadband delivers lots of economic and social benefits and it is a ‘no brainer’ that we want it throughout the country. ‘True’ broadband is another matter. The evidence the document cites argues that this will give some $12b-$30b per annum in economic benefits appears to me to confound basic and true broadband. I suspect that the marginal benefits to true over basic broadband are far lower than this; especially, over the next five years.
Is true broadband important for small business?
The document argues that broadband is important for small business. It is argued that basic broadband is insufficient and true broadband is what is required for some internet applications for some industries (some architectural firms building big buildings). This is certainly plausible but does it mean we have to roll that out to 98% of the population. If your business really requires this and it is small perhaps it needs to be located where we already have true broadband. And if those areas need to be expanded that is a useful idea. But it is a local or perhaps a state issue. It is not a reason to build a network across the entire country. That is massive overkill.
Is true broadband important for families?
Let me answer this simply. We have true broadband and I do not think that it provides anything beyond a little convenience and some entertainment value that basic would do. Educationally, my children surf the net and can download information; they would just wait a little longer. Documentaries can easily be watched at lower quality but acceptable for computers on basic broadband. So the e-education possibilities are limited. E-health is way off and I would bet the main constraints are regulatory and practice oriented rather than technological. You can view video quite well now and if individuals have diagnostic equipment in the homes (another subsidy perhaps) then that data will likely flow just as well over basic as true broadband.
As for entertainment, there are plenty of substitutes. For television we have broadcast TV. And let’s face it, we are denied additional content not by technological limits but by the market power of media players and exclusive distribution deals. If you want homes to have access to this, then free up media and copyright laws to do so. Investing in a network will not help. So long as the content into Australia is controlled, current media players will just get an additional channel from true broadband. It is not surprising that they support it so.
The document indeed claims how important broadband is for media diversity and user-generated content. Yes, but again is this a true broadband issue or a basic one? Again, are the constraints technological or regulatory — denying easy replication of copyright material.
Is true broadband important for innovation?
I gagged when I read:
True broadband is also a crucial tool for the commercialisation of Australian intellectual property and content. True broadband will be the highway that Australian ICT and digital content companies use to deliver their products to the international market place. Broadband gives Australian knowledge economy businesses the chance to break down the tyranny of distance and connect with the global economy on an equal footing.
There is so much wrong here it isn’t funny. First, what barrier is there to Australian content through broadband? We have true broadband in many places in Australia. The Star Wars movies were made in Sydney for goodness sake. They didn’t need an Australia-wide network and neither does anyone else. They could probably use lower broadband prices but this is an issue for competition rather than massive subsidy.
Second, the Labor proposal won’t give that equality anyway. It proposes 12Mbps when the competitors ALREADY HAVE 100Mbps and are going to 1Gbps. You need truer broadband for that and that will only catch us up. What advantage could that possibly give Australian business? They will at best be competing head to head with companies who have had that advantage for years. This just isn’t going to cut it.
Finally, what possible benefit could $20m Australians having true broadband and receiving content mean for Australian companies providing content for the global marketplace? The answer is surely close to nothing.
The basis for the current broadband hysteria being drummed up and becoming an election issue of a $5b magnitude is not there. We are lagging and that is a worry. We have handed broadband investment to a single company, Telstra. And we have no plan to deal with that fundamental issue. A commitment to a big bang infrastructure roll out is not the solution. Something more economically sensible but with lower ‘headline’ value is what is needed.
[Update: this post appeared as “Is this newfangled broadband a true economic boon?” Crikey, 22nd March, 2007.]