How the National Broadband Network Will Affect the Way Australians Communicate

How the NBN Will Affect the Way Australians Communicate.

Australia is on the cusp of a major change in the way its citizens communicate and do business. 'Cisco' is an internationally renowned company involved in measuring the uptake of new internet and communications technology.

Australia will experience a large increase in uptake of internet communications technology with an upsurge in networked devices as well as mobile and video Internet traffic. Such an increase in internet usage can only be properly supported by an integrated infrastructure that uses state of the art technology, to facilitate high speed broadband connections.The existing copper wire based infrastructure, will simply be unable to cope with the demands that will be placed on it by the Australian community.
Australia's decision makers are faced with a dilemma:
'Do we continue to prop up and patch up an ageing, increasingly outdated system to avoid the initial enormous financial outline involved with the proposed NBN, or do we invest now in a new system at significant financial cost, in a climate of international financial volatility?'

History has repeatedly shown that societies taking up new technology when it becomes available, gain economic, political and strategic advantages over those that delay. On those grounds alone, there would appear to be sound arguments for investing in the NBN. Experience also tells us that the cheapest time to invest in improved technology is now, not in a few years time when inflationary pressures have had time to work on the original cost estimates, and the pressure for services from consumers has also increased.



The New NBN - A Cost-Benefit Analysis Overview.

Before looking at the options available to the Australian citizen, we need to settle on a working definition of 'cheaper'. Cheaper in this context should consider not only initial outlay, but reduction in expenditure over the long term that arise from making the initial investment; the increased availability of services that might not be otherwise accessible to parts of the population and the 'costs' that companies and shareholders extract, when they provide infrastructure services.

There are two basic perspectives that need to be considered when commenting on whether the NBN will result in cheaper access to the technology for Australians. The Australian taxpayer will foot the cost of introducing the NBN. What will we receive for our money? If the NBN delivers on its promises, there will be massive budgetary savings and increased efficiency in other areas of public expenditure, such as, health and education for regional communities. The availability of services in regional areas will be more closely brought into line with those of our major cities. Businesses across Australia will have a 'level playing field' upon which to conduct their business. Australian business will be more competitive in dealing with businesses worldwide. These are the advantages that Government has paraded to support its case for the NBN.

The Opposition recommends a piecemeal system, relying on a variety of technologies to address the forecasted increase in demand that Australians will have for communications technology. This approach avoids the enormous upfront costs, favouring a mix of private and public investment to achieve a similar outcome in time, as promised by the NBN. A reliance on private investment will ensure that profitability lies at the heart of the infrastructure proposed by the Opposition. It is highly unlikely, that those parts of the community where the provision of the services is not cost effective will be connected. The resulting infrastructure will be piecemeal and the 'playing field' for businesses across Australia will not be level. This will also translate into reduced international competitiveness for Australian business. An initial higher upfront expenditure therefore, has the potential to deliver significant savings in the future.

The crux of the question then remains, will the NBN result in 'cheaper 'prices for consumers? In order for the forecasted increase in consumer demand to be met properly, and for the infrastructure to cope with demands into the next two decades, we have no choice but to opt for a fibre network. It will never be cheaper, whether you fund it as a taxpayer now, or have to pay for it as a customer of private corporations into the foreseeable future. Looked at in this light, an NBN funded by the Australian taxpayer is likely to be the most cost effective strategy, and therefore the cheapest option.