news The Technology Policy Institute, a US-based think tank, has published a paper on the NBN concluding that, while the network was set up to increase competition in the broadband sector, as well as boost quality and lower prices, it has evolved into a “intrusive policy subject to political pressures”.
The paper, titled The End of Australia’s National Broadband Network?, takes a look at the National Broadband Network, its history and aims, its changes since inception, and finally attempts to predict what my lie ahead for the ambitious scheme in the face of growing use of mobile technology.
Had the Federal Government spent the planned $40.7 billion rolling out a fibre-optic network to replace Australia’s existing copper infrastructure, it would have represented the “largest public sector investment in broadband infrastructure in the world as a share of GDP and the largest infrastructure project ever in Australia”, the paper says in its introduction.
However, while the NBN was meant to connect 93% of Australian households and businesses to a wholesale fibre to the premises (FTTP), it was downgraded to fibre to the node (FTTN) as a result of “escalating costs and political change”.
Six years after the NBN’s first trial in Tasmania, the “overall outcome has not been positive”, the authors, Lucia Gamboa Sorensen and Andrew Medina, suggest.
Coverage and adoption rates have “slowed” for fixed broadband and mobile broadband growth has remained “relatively constant” despite increased investment.
NBN customers still experience “low quality services”, due to low speeds, high prices compared with other countries and a slowing rate of price decrease for Internet services.
Further, fixed retail market concentration “has not changed significantly” since the NBN began operating and has “slightly increased” in the mobile market.
Finally, the research undertaken for the report suggests that faster mobile connection speeds are “changing consumer patters to perceive mobile as a substitute for fixed broadband”, the authors say.
While an ambitious undertaking, “the Australian case reveals how state owned broadband might not be the best answer to meet full coverage and competition objectives”, they suggest, adding:
“The NBN is an example of an intrusive policy subject to political pressures that has resulted in inefficiencies that distort consumer patterns and investment decisions without changing the competitive landscape.”
“In further attempts to bring down the cost and adopt a more deliverable strategy, the current administration is considering a gradual sell-off of the NBN network.”
A final chapter spells out the threat to the NBN from the increasing use of mobile tech to access the Internet.
While fixed data traffic is expected to grow by 180% by 2019, mobile data traffic is predicted to increase “nearly five-fold” by 2020.
“Perhaps the NBN should consider whether its deployment strategy can properly accommodate mobile data demand by prioritizing resources in towers and antennas and radio frequency spectrum allocation,” the report says.
The authors conclude by saying that “NBN has not only failed to achieve its targets but
stagnated fixed broadband adoption”. Further, it has “not changed Australia’s competitive
landscape in the mobile broadband market”.
They suggest that the government’s role in a sector “characterized by its dynamism” needs to be “revaluated” [sic].
The full report in pdf format can be found here.
Image credit: NBN company