National Broadband Nuff-Nuffs

Now, I flipping LOVE the internet, so don’t get me wrong. But $43 billion for a national broadband network works out at $2000 for every Australian.

Another grand

A grand

Would my household willingly drop 6 large for improved internet speeds?  We can already suck entire seasons of US TV shows into our house in a matter of hours.  Skype runs well. This blog uploads in the blink of an eye.

I can’t begin to describe the number of things that would be a higher priority.

So, what the Hell is going on?  Does the government know what people use the internet for? Reading the Age and checking their email. Reading kick-arse blogs, streaming The Wire and playing Fantastic Contraption. (Go on, click that last link – you’ll see one of my designs. Here’s another. )

Point me to the problem that this $43 billion is trying to solve!

It’s a waste.  You can see why ‘Government rejects cost-benefit analysis into National Broadband Network‘ (SMH, 27/11/2009). It wouldn’t look good for them!

It reminds me of when laptops were new, and schools thought it would be great to force all students to have laptops.  But it was a waste, leading to more glossy publicity shots than learning outcomes.  Similarly, someone in Government seems to have swallowed the idea that if the country uses internet and the country needs infrastructure then the country needs more internet infrastructure.

$43 billion would fix public transport in this city. This network (designed by the excellent Phin) would be affordable. We could probably afford to fix Sydney too.

And don’t talk to me about video conferencing.

In the internet age, travel is, counter-intuitively, increasing not decreasing. The majority of business emails are to arrange facetime. The two systems are complements, and I found this cool graph that shows how travel time proves invariant across incomes and cultures.

We can't eliminate the need for travel by investing in the internet

All this expense for a great big nothing makes me want to puke. I haven’t seen gross waste like this before, even when I worked in Defence. That’s saying something.

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Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

11 thoughts on “National Broadband Nuff-Nuffs”

  1. Build a broadband network and throttle it with filters. Break-even. Unfortunately, I have a sneaking feeling that this first-term gov is having the insecurities of a third-term gov, but minus two terms of achievements.

    I hope voters let them know that it is OK to turn back on bad long term policies, so long as they stay the course on good long term policies. It would be good if voters also let them know that it’s OK to turn back on drastic expenditure when it is no longer required. They need that feedback now.


  2. Mark, have you been taking a look at the polls? People are trying to tell the government something. (Yeah, it’s not worse than other governments have seen before, but it is worse than the current government has. They’re doing something wrong.)


  3. I’m no expert in the NBN and I’m not wishing to defend it, but I will take issue with two assumptions that you have made. Firstly while you may have good internet access many people even in the Melbourne metro area don’t. There are still places that you can’t get ADSL because the phone lines aren’t up to scratch and many more where you can’t get ADSL2. My colleague recently went to Tasmania and heard for the first time in years the sound of a dialup modem. So I’m far from convinced that broadband has reached ubiquity for those who need it.
    The second assumption is that something like the current ADSL2 or cable service is adequate. This seems like one of those “nobody needs more than 640kb of memory” or “there is a market for 6 computers in the US” lines – I probably have those wrong but that’s the gist of it. Whilst there is always spare computing and network capacity it usually gets quickly overtaken by new software or services that people find they can’t live without. Even though I use a beastly computer with 8-cores and 16GB of ram and have fibre access it’s still lacking for some tasks and I wouldn’t say no to more speed.


  4. TTTE – I agree 110%, however, would argue the following;

    1. Internet access is tightly controlled in Australia by oligopolists (or is that oligarchs) who have access to legacy wires. Most houses unfortunately are still connected to the world through whatever cables PMG/Telecom installed all those years ago, and unfortunately Telstra treats them as theirs.

    2. Australia is being left behind – but what’s unusual in that? Australia is usually a follower on most things.

    3. If the government had wanted faster speeds – they should have offered instead to fund outcomes eg accept competitive bids for the biggest increase in speeds that people could manage, whether by wireless or fibre or whatever. Not just paying for a technology that will date.

    4. The Australian market is unsophisticated (see point 2) and Australians are poor and undiscerning consumers.
    5. Don’t bother replying “Australia is not like Asia….dribble dribble dribble… ” if it isn’t, it ought to be. Any other strategy is a big FAIL

    6. You could possibly use a new network as a competition stimulant, particularly if you privatised it after it was built.
    7. Telstra made their bed and need to lie in it now. That business of hiring Sol to fight the government (both colours) was stupid in the extreme.

    8. I would rather see more push towards ‘micro’ networking, where each wireless device communicates with the nearest one (or 10) and passes information packets around that way, rather than heavy channels and cables and so on dominating the world. Imagine if such devices were in use in the suburbs in the New Territories and Shenzhen along the HK/Mainland China border, with thousands of separate small radio messages linking China to the world rather than through a few trunk routes that the Party can control.

    9. Agree with the previous poster – sick of the “I don’t need fast internet…[therefore noone does]”

    10. I’m moving to a fringe suburb shortly and I want a positive message to developers and telecoms providers – a fixed copper line with dialup or minimal broadband capability, which is all the law to date requires – is just not good enough.


  5. For a $43 billion investment, there is a remarkable lack of information available on what we’ll get for our money and the risks faced in making the investment. I think this will prove to be a massive millstone around our necks, and a far worse program than the pink batts or the BER. Will broadband even be a cutting edge technology in a few years time?


  6. The irony of the investment is that rather than making it easier for australian industry and business to contact australians, it will infact open australias market up to international internet services. read thomas friedman about the flat world, and realise that its only australians who use the internet for reading the age and checking email (and blogs and games). most of the radically increasing, techno literati of ‘developing countries’ – those who have a ‘bat out of hell’ approach to learning, working and doing things to get ahead amongst a big big pack- will now be able to reach the market of australians who need their tax done, their libraries uploaded, their data stored and their general information age needs serviced- right down to online medical advice and education.
    kind of a reverse stimulus package.


  7. Isn’t the NBN all about upgrading the copper wire system to a fibre optic (or some other such tech joy hardware) that allow information to travel at an infinite speed i.e. the speed of light? Once you’ve got that in place all you need to upgrade is the send/receive nodes at each end of the wire.

    On the whole though, I agree. Even if it does cost $43b to have every house connected with fibre optics, I’m so sick of wires. Wireless is the way to go.


  8. Hmmm, $43B does seem an aweful lot of money to be spending on improving by COD6:MW2 pings.

    However, you assume that an upgrade to the existing internet infrastructure would have no impact on how we use the internet. If that were true, I’d still only use the internet to read text (turning off images in my browser as they took way too long to download) and rip pornography (over hours, mind you) through FTTP and Newsgroups – just as I was during the dial-up era.

    Now I can Skype, read the Age (with pictures and movies), and describe my daily bowel movements in real-time using Twitter etc. etc.

    To say we don’t need improved access to internet is true – but the last few years of advances in broadband has changed, and arguably improved, the way we use the technology. Shouldn’t we want this to continue?

    …But…$43B is a lot of money to spend…


  9. I agree it’s a lot of money. But I’m afraid it’s overly simplistic to say $2000 per every Australian. It’s expenditure on our infrastructure and our capital stock. So it’s more like $100 per year (straight line depreciation over 20 years). Also, you haven’t taken into account the benefits generated that a more efficient and more connected network will bring in. NBN is the way to go. Note which generation the pollies questioning it in Canberra are from. Having said that, it’s not as if Labor doesn’t have their fair share of idiots at the helm. Senator Conroy takes the cake in my opinion. And I think most Gen-Y-ers would agree.

    Liked by 1 person

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