EDITORIAL- 30/9/2010: NBN – THE SOVIET MODEL WON’T HELP US - OR OUR FILMMAKERS
By Andrew L. Urban (with comment by Simon Britton)
Before the collapse of the Soviet Union and its command economy, there was a
quip doing the rounds to illustrate the failure of command economies to meet
consumer needs. How come there are frequent toilet paper shortages in Moscow
when in New York there is always just the right amount available? The answer of
course is that the market delivers toilet paper to meet demand pretty
Our concern at Urban Cinefile is not the delivery of toilet paper but of good
quality broadband – as demanded by a variety of consumers, ranging from high end
industry, research and medical users to the suburban seniors looking for garden
supplies in their area – and all in between, including home entertainment
customers. We have been calling for a significant improvement in Australia’s
broadband service for years, usually citing Korea, where consumers enjoy fast
and easy access. But in all our discussions about this issue, we never once
attacked the Government for failing to provide the service. We always wanted
Telstra – and the industry in general - to get it done.
Why we care about broadband at Urban Cinefile is to do with its potential for
Australian filmmakers as an alternative distribution model; to get their works
in front of audiences in remote and regional Australia, for example, in places
where screen culture has not and can not penetrate otherwise. (As well as all
metro areas, of course.) We also care about broadband delivering our own
services, trailers and such, and what we COULD do to assist filmmakers in their
"we argue that the NBN is a colossal mistake"
Now we argue that the NBN is a colossal mistake. Take it as read that we
concur with the many, multi-faceted criticisms already aired in the media, but
the real and fundamental issue is this: Government monopoly is not the way to
deliver high end digital services in a modern economy. The second but equally
big negative is the Government’s track record implementing major programs:
abysmal. Given that record and that the NBN is one of the largest single
networks ever built on earth, we can expect the NBN roll-out to falter - without
significant help from, say, Telstra. The sublime irony would not compensate for
the extra cost and the waste.
Government does have a role in rolling out quality broadband services across
Australia, but not as the provider; its role is to enable, not to replace the
private sector to do it – competition and consumer demand should be at the heart
of the program.
There are various ways Government can ensure its policy objectives are met in
all areas of telecommunications and other services, ranging from taxation tools
to cost underwriting and rebates where high cost regional services can be
By Treasury’s latest warnings, “..implementation of the NBN also carries
significant risks, including financial risks for the public balance sheet and
risk around competition and efficiency telecommunications and related markets.”
The bad policy that gave birth to the NBN is compounded by technical
shortcomings in the plan (according to our sources of information):
Contention: Today, every ADSL service with 20Mbps has a contention ratio
of around 20:1 (more for some carriers). That means you share that 20Mbps with
20 other people. It will be a very long time before all households get 100Mbps
of actual bandwidth. Not for several decades at current carrier equipment rates
of evolution. The Core can not and will not be able to handle that sort of
bandwidth. The 100Mbps or 1Gbps is only the speed from your house to the
exchange. From there to the Internet, you will get the same speeds you get now.
The Core of Australia’s network is already fibre (many times over). And even so,
we still have high contention ratios. Providing fibre to the home just means
those contention ratios go up.
Wireless: The 4G wireless standard is specifically being developed for
data, and will deliver 100Mbps bandwidth with much higher reliability (yes, the
same contention issues apply as mentioned above). Zero cost to the tax payer.
DSL: New DSL technologies will emerge; 15 years ago we had 56k dial-up.
Then 12 years ago we got 256k ADSL, then 8 years ago 1.5Mbps ADSL2, then 5 years
ago 20Mbps ADSL2+. There are already new DSL technologies being trialled that
will deliver over 50Mbps on the same copper we have now. Zero cost to the tax
Cable & copper: Fibre optic cable has a maximum theoretical lifespan of
25-30 years when installed in conduit. Over time, the glass actually degrades.
But when you install fibre outside on overhead wiring (as will be done for much
of Australia’s houses, except newer suburbs with underground wiring), then the
fibre degrades much quicker due to wind, temperature variation and solar/cosmic
radiation. The glass in this case will last no more than 15 years. So after 15
years, you will have to replace most of it, whereas the copper network will last
for many decades to come. Fibre is not the best technology for the last mile.
That’s why no other country has done this.
"a combo of copper, fibre optic and wireless delivery
would serve the entire country better than an all fibre optic service "
So it seems that the Coalition’s policy (as badly, incomprehensively outlined
during the election campaign) is right; a combo of copper, fibre optic and
wireless delivery would serve the entire country better than an all fibre optic
service – and it should be a Government supported and encouraged business
opportunity for the private sector, where ROI disciplines would produce better
service at lower prices.
Another downside of a high cost service (as the NBN will surely be – one way or
the other) is that it reduces the consumer’s willingness to pay more - for
things like Australian online content.
Comment on this article:
I'm not qualified to comment on the technical issues, even though I read all the
opinions avidly. On my reading, the jury is out on the absolute best way to
deliver high-speed broadband to all Australians.
My broader reading of the whole NBN project is that we are very fortunate to
even have the hope of a unified, coherent national network. Having the country's
best and brightest minds focused on a national communications infrastructure
project like this, at such a crucial point in the communications revolution, is
a golden opportunity for content creators. I totally agree with Andrew on the
NBN's potential to destroy the massive barriers to distribution that content
creators face in this country.
We are one of the few countries in the world that has the national will and the
resources to even attempt a project like this. Not surprisingly to me, one the
best-wired countries, Singapore, got that way via a government-led fibre
infrastructure project. And very sobering to reflect that they had it all done
by December 1998! [Andrew: Singapore tiny place; 687 sq kms; Sydney is 1,580,
Australia is 7.6 million sq kms.]
Anyway, if I were a betting man, I would punt on the NBN eventually being
delivered as a hybrid network, regardless of who does the wiring-up. It seems
that the technology is moving too fast to believe otherwise. [Andrew: my
fundamental issue is whether the wiring up is done by Government or private
Andrew's comments about infrastructure taking money away from content is to
accept on face value. To make a crude analogy, if the government decided to
complete a different infrastructure project like a high-speed rail link between
Melbourne and Sydney, would they cut funding to Screen Australia? Or does he
mean that the cost of the NBN will cause the price of broadband to the consumer
to rise, thus lowering their spend on screen content online? [Andrew: households
see broadband service and its content as coming from same bucket of disposable
income, I would think.]
If the latter, I would point to the drastic drops in the price of content that
have happened in the US recently. Who knows how low they will be in five years
time - if you believe Chris Anderson, it could be free. [Andrew: Australian
content price can hardly drop; there isn’t one at present.]
Win, lose or draw, it's going to be a wild ride for content creators in the next
*Simon Britton is a screen content strategist. Before starting MediaWave in
2008, he researched emerging business models for the monetization of online
screen for the AFTRS Centre for Screen Business. He is a Board member of the
Australian Screen Institute (AFI) and of The MediaWave Expert Group, which
comments on issues that affect screen content creators.
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