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NBN – time to reset the vision

I have been on the Internet since 1995, selling Apple Newton software via email and web sites. I co-founded Australia’s largest free ISP in 2000 and I’ve built 3 other online-Internet companies. I can claim to know a bit about online businesses.
In the April 2000 Internet, telco and tech meltdown, one of the catalyst was the vendor-finance fuelled build out of bandwidth capacity. Build the pipes and they will come was the mantra that companies like PSINet, Lucent Technologies and other hardware manufacturers and their investors spent billions funding. What happened? No bandwidth consuming apps arrived and no companies had any business case to pay for using the massive fibre-optic pipes.
Does this sound all too familiar? For my part, it certainly does. The NBN with the claimed 1 Gbit per second download speeds will transform Australia. What utter rubbish. What a great albatross around Australian’s necks it will be. The vision for NBN should be ensuring a price-capped ADSL2 or equivalent access to 99.99% of Australians. Here’s why:
1. The dominant consumer Internet applications are all narrowband and “always on” – anyone with 56K dial-up can use them successfully. Facebook, Twitter, Google, MSN Chat, Skype. And, the dominant narrow band applicatio used by Australians is SMS – 160 characters. You cant get more narrowband than that. What the techno-geeks don’t get is that it’s the continuous access to the Internet – the notion of always online – that is what is driving the new types of applications. Always on does not need to be 100 Mbit, it just need to be a quality stable connection that doesn’t drop out. That’s why ADSL and Mobile Broadband technologies is better than dial-up, but its not the speed that makes it useful for most users. Of course, the gamers, downloaders and Youtube junkies will want faster and faster speeds with lower and lower latency, but for the average user, download speed is not relevant.
2. Bandwidth is not a hindrance to businesses developing businesses on the Internet. Skill and knowledge is the barrier. I’m not aware of any Australia online business whose business case and economics will improve with a four-fold increase in download speed. Online business will have their web site hosted at datacentres and not at their own premises so how will the NBN assist businesses getting online at all? If a business is not already online, the NBN is not going to get it online.
3. Achieving 1GB/s download speed is a mindless target. Who cares? What content is there to download at that speed from an Australian site? I can think of some content that’s offshore but International bandwidth is already constrained. Even 100 Mbit/s is a hollow target – isn’t the point to have access for all Australians? The government can connect the last parts of Australia that is not economically viable for commercial companies to connect and be done with it.
4. Trans-pacific bandwidth is more important than domestic bandwidth speed. Can someone please release the current capacity out of Australia so we can see whether as one writer said NBN is just “building a giant fat pipe to try and suck a pea through a straw”.
So let’s get some sense into the NBN – let’s set the target and vision for NBN to be building a continuous always on, price-capped, ADSL2 speed Internet access for 99.99% of Australians. Did you know $40B will pay for 10 Million Australian households with broadband access for 8 years? I’m sure there’s better ways to spend Australian taxpayer’s money to get us into the Information Economy, Knowledge Nation, or whatever you want to call it than digging up the road and laying fibre optic cable.
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Related posts:
Why we urgently need critical thinking on the NBN
Why the NBN will fail

About Sydney Low
Sydney Low is a serial entrepreneur. He has built several companies around software, Internet access and mobile phones. Previously, he provided advice to Australian and US companies on the strategic use of technologies as a partner at Mitchell Madison Group and McKinsey & Company. He is currently the CEO of RedTxt.com.au – a company that is pioneering the development of sponsor-funded SMS for communities.