The Australian newspaper has an article today with a curious headline and photo on the NBN.
Click here to read the article in full.
Fishing and Australia’s National Broadband Network may not seem to have much in common. There is the obvious connection in the story with the fish farming business in rural Australia benefitting from better broadband. It highlights how all types of business now rely on good quality broadband to compete successfully.
But the article also highlights the continuing frustrations many Australians are having waiting for the NBN. Fishing, frustration, waiting and broadband … there is much to connect these themes as Australia struggles to move its telecommunications infrastructure into the 21st century.
According to Akamai’s latest “State of the Internet” report 28% of Australia’s internet end points (or IP addresses) connect at average download speeds of less than 4Mbps. Australia ranks a disappointing 52nd globally on this benchmark speed for a basic broadband service.
Meanwhile the average speed nationwide of all IP addresses is just 7.8Mbps – a global ranking of 46.
The following economies in our region rank better – South Korea, Thailand, Hong Kong, Taiwan, Japan, New Zealand and Singapore. Globally our other major trading partners such as Canada, United States and most of Europe including Poland, Hungary, Russia, Slovakia and Romania rank higher than Australia.
And Australia’s relative position is getting worse as shown by the next two graphs comparing Australia and New Zealand.
As New Zealand has moved to a higher ranking in the global top 30, Australia seems destined to move firmly into the “over 50s”.
My comments, quoted at the end of the Australian article, highlight the real cause of this underperformance – and it has nothing to do with technology.
Australia’s politicians have been arguing for decades over whether it is best to let private sector competition drive broadband investment or should the government fund and even build the necessary broadband infrastructure for the 21st century. It is a political fight over economic models and ideologies of how to get the most “efficient” investment. Both sides of the political debate agree that fibre will eventually be needed to connect the vast majority of homes and businesses.
In Australia the political left kicked off the rollout of a fibre based National Broadband Network during their time in power (2007 to 2013). A change to the political right has seen this scaled back to a minimalist fibre approach while retaining and even strengthening the monopoly rights of the government entity in charge of the network.
The right are leaving any re-structure towards their ideologically preferred private sector competition model until some time later this decade or even the 2020s. The cover for this delay is that the focus should be on the re-engineering of the NBN to re-use the copper and Pay TV cable systems. But the fear of a political debate on the merits of private sector participation is no doubt also part of the right’s thinking.
So a slow drift towards private sector participation is expected if the right stays in power. But any change of government would likely see a switch back to the government funded model.
My article in the TelSoc journal provides more background and detail on the sad history of Australia’s broadband policy and the likely future direction.
Meanwhile Australia sits uncomfortably between left and right ideologies and drifts further down the global rankings.
However, the curious thing is that both political models can deliver the desired outcome – more fibre investment.
Private sector investment is driving good outcomes in many economies. And not just in Hong Kong where I now work. Canada, a country with similar population distributions and geographic challenges to Australia is also doing better than Australia and New Zealand with a global ranking of 87% of internet connections achieving greater than 4Mbps downloads – a global ranking of 26.
On speeds above 10Mbps Canada is even better placed with a global ranking of 19 having 43% of its IP addresses bettering this benchmark (Australia’s rank is 45 with 18% above 10Mbps). Canada has achieved this without any significant government funding of broadband infrastructure.
New Zealand and Singapore are examples of government funding driving fibre based broadband investment. Singapore sits at the top of world rankings and New Zealand is improving after achieving bipartisan support for a government funded model in 2008.
Either model can work – but Australia just needs to choose one or the other and stick to it.
Just imagine if a country was as in-decisive in choosing which side of the road to drive on. It would be carnage on the roads.
Unless one side of the political debate caves in, Australia can expect to see its global broadband rankings continue to decline for years to come. The result will be Australians continuing to “wait” for their 21st century broadband.