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By Ian McCollister | August 13, 2010 1:37 PM PDT

Julia Gillard and Stephen Conroy's presence during the launch of the first commercial services on the National Broadband Network (NBN) is meant to prove to voters that high-speed broadband is indeed within reach, that it will change people's lives for the better, and that the rates are affordable for most households.

The fact that the exercise only involves 70 trial households in Tasmania is a political matter that can be overlooked. The Labor Party is selling the vision of high-speed broadband across Australia. Conroy criticizes the opposing Liberal Party, saying that they are condemning Australia to the digital dark ages.

The government claims that it is introducing a vital technology that will improve national productivity, transform health and education services and reduce road congestion to give small businesses and households a better chance at an economic future that is bright.

"Without this technology, we will fall behind... It's the same as saying we will export jobs to Singapore, to Korea, to Japan. Without this technology, our schoolchildren will fall behind," Gillard said.

The only problem is the $43 billion price tag attached to the plan. Conroy's description of the project as a gold standard is a double-edged sword for taxpayers.

Another issue is how strong the demand for super high-speed broadband will be once it is rolled out over the next eight years. This includes just how many people will be willing to purchase the service when, for many households, the main purpose of high-speed broadband would be for downloading high-definition movie files or faster computer gaming against opponents in other countries.

The Prime Minister and the Communications Minister did not want the focus on such questions. The acceptance of voters of the revolutionary effect of the National Broadband Network is vital to the Labor Party's appeal that is based on superior economic management backed by moves to invest in future of the country.

This is in contrast with the opposition's modest patchwork policy. The government's broadband plan is more enticing and clearly has promise.

The Labor Party also took measures to prevent the dominance of Telstra. The government prohibited the company from owning the wholesale network as well as its huge retail business. The Liberals are against the move, saying that the telecommunications company was sold to 1.4 million shareholders on the basis that it was an integrated wholesale and retail company.

Telstra shareholders saw another fall in the company's share price. Its share price decreased by nearly 10 per cent yesterday to $2.94; the drop was in conjunction with its announcement that earnings next year would decline by high single digits. The company's shareholders might think that the NBN deal, which has around $11bn of value, might be a more reliable alternative.

High-speed broadband might be enticing but many people are not sure what difference such services will mean for them. Things did not get any easier when Abbott refused to give details on the Liberals' alternative plan by saying that he was "not a tech head".

The government announced that NBN Co's fibre network would offer not just the promised 100 megabits per second, but ten times faster speeds at one gigabit.

"This idea that, hey presto, you can suddenly get ten times faster speeds for something that isn't even built yet is something I find utterly implausible," Abbott insisted.

The real issue is whether high-speed broadband will ever be particularly useful to most people. The government ignores the fact that big businesses with hundreds or thousands of employees already have one gigabit Internet speeds through existing fibre connections. It also overlooks the fact that for households and small businesses, the speed may be too much no matter how many apps they run.

The high-speed Internet plan also overlooks bottlenecks such as the slowness of the fibre link between the US and Australia and the capacities of current personal computers.

Obviously, the fibre connections will have its advantages. At speeds of 100mbs, a typical high-definition movie would take about five minutes to download. The same movie would take about about 30 seconds at a rate of one gigabit.

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