The National Broadband Network - an expensive dud?
By Ken Schultz
The federal Labor government has committed, without any detailed cost-benefit analysis, $43 billion of mostly taxpayers' money, to build the National Broadband Network (NBN), a high-speed broadband network based on providing fibre optic cable to 93% of Australian homes over an eight year period.
The world's richest man, Mexican telecommunications tycoon Carlos Slim has slammed the government's planned NBN, claiming it is too expensive.
"It's too much money," Mr Slim said at a Sydney conference last week. "It's not necessary to invest so much money because technology is changing all the time."
"Fibre is not enough - you need to have a good network of wireless, a good wi-fi network," he said. "You need to have a multi-platform of everything: mobile, landline, fibre, cable and copper."
The most expensive infrastructure project in Australia's history could turn out to be a massive waste of taxpayers' money by being superseded even before it is completed, as a revolutionary new wireless broadband system is about to hit the US market.
In November 2008, the US government decided to reallocate the "white space" of unallocated frequencies in the television channels range that would no longer be needed when the last of that country's analogue television transmitters switched to digital broadcasting in June 2009.
In mid-September 2010, after years of testing, the Federal Communications Commission (FCC) in Washington DC gave the go-ahead for other users to take up these frequencies in the 54 megahertz to 806 megahertz band.
Frequencies in the 700 to 800 megahertz band were auctioned off to mobile phone companies for $20 billion, but importantly, the FCC made the white space below 700 megahertz free to wireless internet service providers.
The reason these channels are so valuable - and why they were chosen for TV transmission in the first place - is because their signals travel for kilometres, can carry huge amounts of information, are unaffected by weather and can penetrate buildings.
The frequencies below 700 megahertz are being provided free of charge to internet service providers because the US government hopes to trigger a wireless internet revolution, based on moving large volumes of data further, faster and cheaper.
While the Gillard government boasts that its NBN will move data at 100 megabits per second, the new white space devices are expected to be able to zip data along at 400 to 800 megabits per second over ranges of tens of kilometres, making the NBN look like a laggard.
Australia will turn off the last of its analogue TV transmitters by the end of 2013.
In the meantime, Prime Minister Gillard and Communications Minister Conroy should go back to the drawing board and come up with a plan to embrace the new technology before huge amounts of taxpayers' money are wasted on a potentially obsolescent system.
The federal government should concentrate on just providing a cable backbone between major population centres while closely monitoring the the roll-out of white space technology in the US and conducting its own tests.
If the new technology proves to be a winner, the government would be limited to providing fibre to a number of transmitting towers in each city. It may be able to piggy-back the antennae to existing mobile phone towers. The rest could be left to the private sector.
The result would be a world-class broadband system, provided sooner than the NBN and at a fraction of the cost to the taxpayers.
Gillard and Conroy would do well to heed Mr Slim's words.