Why the Coalition’s $6.3bn broadband plan is a waste of money

According to The Australian, under a Coalition broadband policy, we’ll be getting:

  1. “$6.31 billion over seven years”
  2. “$2.75bn to the construction of an optic fibre backhaul network but also relies on at least another $750 million from the private sector”
  3. “$1bn in grant funding for a rural and regional wireless network”
  4. “$1bn to build a wireless network in metropolitan Australia”
  5. “Satellite coverage for the remaining 3 per cent of the population will receive a $700m boost”
Why is this a waste?
Firstly the Coalition could have had another $6.3bn to spend on other things like roads, rail or healthcare.
Secondly they’re building a “optic fibre backhaul network” – that sounds pretty similar to what MFS-WorldCom, New Edge Networks and others in the United States spent over $90 billion on in their technology boom, depending on who you believe much of that is still wasted “dark fibre”.
Thirdly while I’ll agree a wireless network makes sense in rural areas with very low populations, it doesn’t whenever you get more than a few simultaneous users. On a properly built fiber network, you can get the full speed – Labor and the NBNCo are promising 100 Mbps minimum if you are willing to pay for it. That is a guarantee.
On a wireless network (and the Telstra/Optus HFC “Cable” networks) you have what is called contention – when other users use the same network the performance you get degrades. It’s not uncommon for many users to degrade the performance of WiFi 802.11b networks from 11Mbps to 1Mbps or even lower making the network unusable (try this in a university library for example) even with the best algorithms to share the bandwidth.
And consider for a second – everyone on a wireless network must obey the rules – anyone with a misbehaving piece of equipment (or even someone who was deliberately being malicious) could interrupt service – not for one user but for dozens or hundreds – at once.
That makes applications like healthcare monitors for elderly citizens impossible – it’s simply too risky. It also makes latency sensitive applications, like videoconferencing or online gaming, much less engaging (if you’ve had dropped telephone calls in the past – how often have you dialled the person back and how did you feel?)
Fourthly, even if you were *extremely* optimistic about the Coalition’s wireless technology, it might be capable of a peak theoretical 1Gbps with the commercialisation of the still in progress 802.16m WiMAX. Now split that between 100 users per deployed node (10Mbps?). Many metropolitan and regional users today have ADSL2+ DSLAMs featuring up to 24Mbps. However you cut it, the proposed wireless technology either doesn’t exist today or is inferior to existing wired technology, and vastly inferior to a fiber network.
Finally satellite coverage is receiving a $700 million boost. The NBNCo is planning to deploy 2 satellites for rural Australia at $500 million each, providing better bandwidth and redundancy in the event of one failing. There aren’t that many makers of satellites, it sounds like the Coalition might end up wasting $200 million right off the bat and get just a single satellite.
Now I should be clear, I believe in the private sector moving forward with wireless deployment, it has great applications, especially in the mobile phone/laptop/netbook/tablet space. But wireless spectrum is still relatively scarce and relatively limited – and for the forseeable future it will remain so. There’s are many more good reasons the IT industry has wholeheartedly slammed this Coalition broadband plan.

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