news In its main masthead editorial, The Financial Review newspaper this morning published a number of heavily disputed statements regarding the Federal Government’s National Broadband Network project, including backing the controversial claim that a new generation of wireless technologies could make the NBN’s fibre rollout obsolete.
In an article entitled “NBN delay will crimp returns”, the newspaper broadly repeated a number of claims which have previously been made with respect to the NBN by the Opposition and other groups critical of the project.
Perhaps most controversially, the newspaper claimed that there was “a real risk” that the NBN’s fibre infrastructure might be overtaken by technical breakthroughs in areas such as “wireless technology”. “One such breakthrough on the technological horizon is Data In Data Out wireless technology, which promises wireless speeds up to 1000 times faster than those offered today,” the newspaper claimed.
The idea that Australia’s broadband needs could be served in future by wireless technology — especially 4G mobile broadband — is not a new one. It has been raised repeatedly by the Coalition over the past several years as an alternative to the fixed FTTH-style rollout which predominantly features in the NBN. The case for wireless as a future broadband replacement for fixed infrastructure has been strengthened by the huge growth in uptake of 3G and 4G mobile broadband services in Australia, with telcos like Telstra adding on more than a million new customers a year.
However, the AFR’s statement that wireless technologies could overtake the NBN’s fibre is also very heavily disputed in technical circles, representing by far the minority view amongst technologists. So far, wireless networks such as the 4G component of Telstra’s Next G network, which is one of the leading 4G networks globally, have shown real-world download speeds far below the projected 1Gbps speeds which the NBN fibre will eventually offer, and usually far below the 100Mbps speeds which it offers in limited areas today.
The speed of wireless technology, particularly in the 4G area, is rapidly advancing, but it is not believed that these speeds will come close in the foreseeable future to the gigabit per second (1000Mbps) speeds which the NBN’s fibre to the home network will offer in the near future. In addition, the NBN’s gigabit speeds will suffer far less than wireless speeds from congestion as additional users are added to the network, and latency (responsiveness) is vastly improved on fibre networks. Australia’s 3G networks currently suffer heavily from congestion. Because of these various reasons, the view that wireless technologies could provide a viable replacement for Australia’s copper customer access network is currently a minority one.
The AFR also reported that take-up of the NBN in the areas where it is available so far has been “minuscule”.
Unfortunately, this claim is also heavily disputed. In general, Australia-wide, NBN take-up rates have been strong. In fact, in communities such as Willunga in South Australia and Kiama in New South Wales, the take-up rate in the short time the NBN has been active in those areas has been north of 30 percent. This rate is expected to accelerate as Telstra’s competing copper cable is shut down in areas where the NBN has been rolled out, forcing Australians to migrate onto the NBN fibre.
Most of the billions of dollars in funding for the NBN does not appear in the Federal Government Budget, as, according to accounting standards, it is not an expense as generally understood, but is actually an investment expected to generate a modest return. This handling of the NBN’s finances has been backed by a report into the matter published last year by the Parliamentary Library of Australia.
In the long term, NBN Co’s projections show the network is slated to make a return of between 5.3 percent and 8.8 percent on the up to $44.6 billion that will be invested in the network — meaning it will return an amount ranging from $1.93 billion to $3.92 billion, as well as delivering Australia a fibre optic telecommunications network to replace Telstra’s aging copper infrastructure.
However, despite the NBN’s projections — detailed in its corporate plan — in its article, the Financial Review alleged that there was no “commercial analysis” to back up the expectation that the NBN would make the return that it has projected, backing Shadow Communications Minister Malcolm Turnbull’s demand that the Productivity Commission conduct a cost/benefit analysis into the project.
The publication of the article comes a day after the AFR published another article on the NBN stating that two key NBN contractors weren’t bidding for the next round of NBN construction deals due to rollout delays in the network. However, after the publication of the article yesterday, NBN Co and the contractors publicly denied the AFR’s allegations as “patently untrue”.
Over the past several years, there have been a number of misleading articles published by various local newspapers about the NBN. In December, the Australian Press Council expressed concern about the Daily Telegraph’s coverage of the Federal Government’s National Broadband Network project, backing a local critic’s complaint that three articles in a short period of time had contained “inaccurate or misleading assertions” about the NBN. Similarly, in March this year, another News Ltd publication, The Australian, published a correction to a story after it inaccurately alleged that a school in South Australia would have to pay $200,000 to connect to the NBN; in fact, the school will receive NBN access as part of the normal rollout.
I believe a stronger focus on fact-checking would serve the Financial Review well in its coverage of the NBN.