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Broadband - the challenge facing Australia

Fibre optocsOn July 1, Finland became the first country in the world to make broadband (at least 1 Mbps) a legal right of every citizen (BBC News). And they have committed to provide a minimum 100Mbps by 2015. In the UK, government has made it policy to provide 2MBps Broadband to all homes by 2012. Here, in suburban Melbourne just 17km from the CBD, the best "broadband" service available is 1.5MBps/256Kbps (yes, 256kbps!)

The federal government's NBN website places Australia somewhere between 27th and 16th on various measures such as broadband uptake, digital content and network readiness, as classified by the World Economic Forum, behind Japan, South Korea, the US and Canada, most of Europe and way behind the Scandinavian countries who are ranked highest (sources: WEF, Internet Evolution). Neither Finland or the UK are ranked at the top, though they are both ahead of Australia. China and India are, of course, ranked well behind the OECD countries, but if the penetration of mobile phone services is included, they are also making huge gains in terms of personal access to the internet.

The Australian government correctly identified access to broadband services as a fundamental need and, despite the delays resulting from the abandoned tender, work (and the TV commercials) on the NBN has begun. The plans sound ambitious - "speeds up to 100Mbps to at least 90% of homes, schools and workplaces" within eight years. But is this enough? Note: this is up to 100 Mbps. If Finland and the UK achieve their aims (leave alone the other countries), we could be further behind in eight years than we are right now. The NBN is advertised as "the biggest infrastructure project, ever" in Australia, so it is unlikely that there will be many more of these. Our current advantages in having weathered the GFC in reasonable shape and the prospect of China continuing to be a great customer will not last forever.

So what more can be done? Higher speeds? If "fibre to the premises" actually gets implemented, then speeds can be increased almost at will cease to be an issue. Speed up the project itself? Well -  judging by the insulation and schools projects, perhaps not.

But how about these other countries? Did they undertake similar projects? Did the private sector step in? Certainly, government commitment plays a vital role in getting the private sector interested, but does the government have to be the implementor? 

Isn't a policy environment that is designed to support continued, rapid development just as important as the NBN project itself?. A good, hard look at what has held us back, certainly won't hurt. The level of competition in the telecom industry for example: Without Telstra the NBN tender collapsed; the Ombudsman continues to get a record number of complaints about all the telcos; in a new development in suburban Melbourne we can only get 1.5MBps/256Kbps and that from Telstra only. Compare this with the competition for mobile services in Asia and the growth it has catalysed.

The notion of public / private partnership and successful mobilisation of private investment as the basis of rapid technological innovation and growth, seems pretty well established today. Laudable as it is, the NBN project by itself cannot catapult Australia ahead of its competitors unless we also take the trouble to develop a regulatory environment that fosters both investment and real competition. At least enough to make the telcos take serious account of customer needs.

Perhaps we should look to the Finns for a few tips? Or even the Canadians, who shares some of our geographical challenges?