NBN for Small Business

From The Age, the NBN will be getting to 1Gbps. That’s good but …

“The average person who does regular internet activities is probably not going to notice much difference today,” Professor Tucker said. ”Where I think it will make a difference is in small businesses.”

Independent telecommunications analyst Paul Budde said right now only about 5 per cent of people, mainly small businesses, would be able to make use of the increased speed.

This from top supporters of the current NBN.

So why not just do FTTH for small businesses? Why does it have to be rolled out at public cost to everyone?


11 thoughts on “NBN for Small Business”

  1. Perhaps because the benefits of higher speed internet are difficult to predict? More practically, though, I doubt any government could do that without some severe public backlash after having first announced it will be available to homes across Australia.


  2. The key words are “today” and “right now”. It is much less costly to install excess capacity now and then have it used in the future than to have to upgrade the NBN in 10-15 year’s time as will almost certainly be needed if it is not 1Gbps. Historically, we’ve under-predicted future computing capacity needs. Besides, one can never have too much bandwidth!


    1. “One can never have too much bandwidth”. Personally I agree 100%, as long as it is free. When I have to pay for it myself, I suddenly find my needs getting more specific, and smaller.

      I think Josh is asking why a service that may be of limited use today, mostly to a small cohort of private businesses, is nevertheless being provided universally.

      There may be good answers to this question, but it’s a question worth asking. How many design businesses and other bandwidth-hungry organisations does the country need away from the major existing centres of bandwidth provision (CBD, various inner suburbs, universities, hospitals etc.) before it makes sense to roll out a universal system?

      I’m pretty sure the answer is “we don’t know”. I also have a suspicion that the answer might be “many more than we have at the moment”.

      I keep waiting for the revelation about how ubiquitous bandwidth has transformed business in Tokyo and Seoul and Hong Kong. And that data keeps not showing up. After talking to someone with close knowledge of the NBN project recently, I’m fairly sure that the data doesn’t exist right now.

      I notice that the Age article does feature suggestions that the big obvious application of the NBN is watching movies (and HBO shows, and old Buffy episodes). I am glad that people are finally talking honestly about this. Speaking as someone who hated driving to the video store in the pre-Internet-movie era, I see this as a big positive. But no-one has ever been brave enough to sell the NBN as a $50 billion movie delivery system, and I’m not surprised.


  3. Because it’s impossible to tell the difference between a house which has a architectural draftsman home business and one which doesn’t?

    Because it’s cheaper to install fibre at once to the whole street than ad-hoc?

    Because the people who use high bandwidth will be paying the highest ‘tax’ despite their fibre installation costing no more than somebody who uses it in bursts occasionally?

    Because consumers are economically important too?

    Because even though relatively few people are expected to use 1Gbps, a lot will use 100Mbps initially, and that won’t happen with FTTN as planned?


  4. Because half of the productivity improvements from the NBN will come from people who start small businesses in their homes, or work from home as a salaried employee instead of clogging our roads.

    You might as well argue that hospitals shouldn’t have cancer wards funded in part by taxes on small businesses, because only individual cancer patients can make use of them, most of whom don’t work in small businesses.

    Joshua, you have been sucked in by the small-minded and the selfish. Public goods are good for the public in totality, even if some benefit more than others. No public good has its benefits spread perfectly evenly across the community. This is not a valid argument against investing in public goods, you’re applying an impossible test.


  5. Because the choice is between a Monopoly and a Monopoly and a Monopoly, so there is a clear market failure; government cannot be extricated from this build?

    Because while the core rule of thumb of markets is that nobody can select a winner; but this is an exception to the rule of thumb, because the transmission of information via waves is a well understood problem, so a clear winner can be picked, and is thus evangelised by those who understand the technology?

    Because ultimately a market in communication will be ineffective while the defining characteristic of that market, bandwidth, is defined by the technology of the pipe owned by the monopoly, rather than the boxes at each end owned by the customer and their selected ISP?


  6. Dumb question, but has Malcolm Turnbull actually promised that line rental will be lower because of the cheaper plan anyway? After all, if the line rental is the tax to pay for the debt, and they’re providing a cheaper build, would they just pocket the difference? How is that reducing public cost?


  7. Because they are replacing the copper but re-using most of the conduits that contain current copper. If you ran it down every street in new conduits leaving the current copper, but only hooked it up to houses that contained small businesses, it would cost several times more, be paid for by several times less people, making it into an enormous waste.


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