Australia - ALP is promoting the NBN as a passport to a brighter future

[the australian] LABOR is heavily promoting the idea of the National Broadband Network as the country's stamped passport to a brighter future.

Julia Gillard used the ALP launch yesterday to once again "embrace the technology of the future" and pointedly describe how high-speed broadband would begin to transform healthcare from July next year.

In a campaign so bereft of big ideas, she painted a picture where people in rural, remote and outer suburban areas could use broadband to have follow-up consultations with specialists from the offices of their local GPs and where parents of kids with rashes could consult doctors via videoconference during the night.

"Imagine the power of this," she declared.

Labor is, of course, focused on imagining the power of the image for voters in marginal seats. It's not about developing cheaper alternatives by better use of upgraded existing technology, including fibre, wireless and cable connection. It's about selling the dream.

Not surprisingly, Paul Fletcher, Liberal backbencher and former Optus executive, insists it is unnecessary for most homes to have guaranteed speeds of 100Mbs for two-way telemedicine.

"That may be necessary for high resolution files like cat scans," he says. "But the idea that people will need to send those sorts of files from their kitchens is ridiculous. We are not anti-fibre. We are already proposing to focus on providing fibre connections to the 50 per cent of schools that don't have them as well as to hospitals that don't -- although many now do.

"But the biggest driver for high-speed broadband at home is downloading videos faster. That is the overseas experience. The big driver is pay-TV. Where is the evidence of applications that require that bandwidth? Videoconferencing occurs today and it might be better with 100Mbs, but is it sufficient to justify spending that amount of public money?"

Instead, the Liberals are proposing to fix up the broadband blackspots in outer urban areas as a matter of urgency and offer $2 billion worth of investment in wireless networks and another $2.75bn in building fibre backhaul to compete with Telstra.

Their political problem remains. The promise of fibre connections to every home offers a "gold plated" solution nationally. That makes it harder to sell the idea that the Coalition version may not be as good, but it's good enough in terms of value for money. And minus a proper cost benefit analysis, Labor simply argues that the National Broadband Network is the twenty-first century answer for an efficient economy. Campaign case closed.

The $43bn fibre to the home model is monumental, both in the scale of the project and in the government's willingness to intervene and spend public money in the telecommunications market in a way that is totally unprecedented internationally. Other countries rely on much greater private investment.

Despite some evidence of voter concern about the estimated cost, Labor still sees its big promise as a political plus. The message is that Labor understands the the future while Tony "I'm no tech-head" Abbott does not. This is the ultimate build-it-and-they-will-come strategy -- new applications, new uses and millions of users signing up for ever faster speeds.

Yet the government's plan ignores the remarkable and constant advances in alternative technologies in favour of establishing one new national fixed-fibre monopoly. The HFC cable networks of Telstra and Optus, for example, already pass 2.5 million homes in the capital cities. Optus, which passes 1.4 million homes, has just upgraded its service to offer speeds of 70Mbs. Telstra has upgraded its Melbourne cable network to 100Mbs, but has not done so elsewhere because the customers aren't willing to pay. Even with a much chastened Telstra now willing to slash its prices on all services to try to win back market share, the demand for that broadband speed so far is hardly overwhelming. Nor is Telstra's use of cable likely to grow under a Labor government, given the $11bn deal between NBN Co and Telstra precludes it from competing with the National Broadband Network.

Labor's plan also ignores the home truth that for people within a couple of kilometres of exchanges, the much maligned copper network is still able to offer broadband speeds of around 20Mbs to 25Mbs -- adequate for most people's demands for the foreseeable future, according to the goverment's own implementation study. And the telcos are also already rolling out fibre to CBD's offices and some high-use suburbs.

But it is the high-speed growth in wireless broadband that is the most obvious commercial competitor to a ubiquitous fixed-fibre network. Telstra is promising peak speeds of over 40Mbs on its wireless network this year. Labor's argument against all this is that just like cable, speed on wireless networks decreases the more people use it and that none of the fibre alternatives offer fast enough two-way technology -- upload speeds as well as download speeds -- for future demand. While it's true that peak speed doesn't translate into average speed, technicians say that a 100Mbs cable service would only slow down to 70Mbs if every person in the street was on. And who knows where wireless speeds will be in eight years time, given how extraordinary the advances have been in the past eight years?

It also seems clear that people are more than willing to trade some speed for mobility. Even with lousy pricing, Telstra now has over 1.6 million wireless broadband customers while revenue from fixed internet fell last year.

So, what about pricing and takeup for NBN services?

The government needs to keep the $43bn cost off-budget by declaring it is not just making an investment in the national interest but one designed to make a return.

The implementation study declared this possible in the very long term -- 15 years minimum -- although at very low rates of return just over the government bond rate. But this requires a very high percentage of homes -- between 75 per cent to 90 per cent -- to pay to take the service.

That is a very big gamble, even dressed up as vision.

Broadband takes centre stage in debate on future