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Publishers Letter

High-speed broadband network could be a white elephant

So the Federal Government has proposed a completely new optical fibre broadband network. Whoopee! All those people who are dissatisfied with their present internet connections will no doubt be salivating at the prospect of such a high-speed, high capacity network? Or will they? And what will they use it for?

In the days after the initial release there have been numerous questions raised about the huge projected cost to build it, its overall coverage of the population and the projected monthly charges. At the time of writing this editorial, there is simply not enough detailed information to make an informed comment. Nor has any of the enabling legislation been drawn up and nor do we know if it will be passed in its proposed form or whether it may be changed so much that the result bears little resemblance to the original proposal.

But in spite of the lack of detail, there are a number of concerns that do need to be addressed before the project gets too far down the track. The first question revolves around the huge projected cost of $43 billion, which is an order of magnitude larger than the $4.7 billion government contribution to the originally proposed broadband tender. This means that the project will have enormous financial costs even before a single customer has signed up. It also means that the monthly charges will need to be quite high, perhaps as high as $150 to $200 according to some analysts. You would need to be a very committed user to pay that much.

Second, we would need to be assured that there would be no significant differences between download and upload speeds, as there are with the present broadband system. Fast download speeds are all very well if you are downloading movies but business wants fast upload speeds as well, for a wide range of applications.

Third, there is a big question over whether we need a fibre-optic network at all, in addition to the existing cable networks. With the ever-increasing speeds available from wireless networks, why have another cable network running down the streets of the nation. And is the new fibre-optic network likely to be above ground, like the present Optus network? Surely not! Many developing nations are choosing to bypass conventional wired networks for phone and internet and have gone straight to wireless systems.

Overall, I have a very bad feeling concerning this plan. Is it likely to be another financial disaster like the 1980s PayTV debacle? Is the government trying to come good on an election promise when it should quietly leave the whole field to private enterprise? And are we going to end up with another government-sponsored monopoly like Telstra was?

Finally, if the government is all that keen to build big infrastructure projects, why not build something really tangible such as the long-proposed Very Fast Train (VFT) project? This would not only provide a very important high-speed link between the eastern state capitals of Brisbane, Sydney, Canberra & Melbourne but would also help reduce Australia’s oil import bill and thus the balance of payments. It would also reduce our overall greenhouse gas emissions – something which is supposedly a big concern to the Federal Labor Government.

In suggesting the Very Fast Train project, I am mindful of the pitfalls of such government-sponsored infrastructure such as the Alice Springs to Darwin railway which is over-burdened with debt. However, the VFT project would potentially serve a very large population along its proposed route and there would be countless benefits apart from the railway itself.

Leo Simpson

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