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How close is the NBN to meeting Australia’s connectivity needs?

Leon Spencer | Jan. 25, 2017
The NBN is almost halfway to completion, but will it meet Australia’s connectivity needs?

"Its [the NBN's] funding method and construction costs will create broadband access with higher prices than current ISP [internet service providers] charges and those of Australia's trading partners," he said.

"Australia has gone only part of the way towards creating abundant bandwidth by addressing coverage but not attractively-low prices.

"This leaves a national economic risk of relatively expensive and under-utilised broadband. Although national wholesale coverage is likely to be achieved by 2020 its funding model makes access 'not cheap' and 'not compelling'," he said.

Fleshing out this point, Johnson suggests that, the theory of an "optimum modern broadband economy" is that bandwidth should be widely available and priced so attractively that it is intuitively used in abundance by all sectors of society as "bandwidth to burn".

"Relatively few economies have achieved that metaphor for bandwidth provision, and Australia is not one of them, as the near-term price of current access networks remains stubbornly expensive with speeds that are modest in global comparisons," he said.

Yet Johnson suspects that the pricing issue may not be a lasting affliction for Australia's NBN resellers and end users alike, with nbn likely to make some changes further down the track that will see prices fall.

"nbn Co is likely to change policy to provide interconnection from all POI [points of interconnect] to metropolitan areas in 2017 via its transit network to cut retail service provider (RSP) costs," he said.

In the meantime, Australia has another three or so years to see how the remainder of the network's construction pans out.

Given that the final build contracts have now been signed, nbn is optimistic that it will be finished on time and within its current budget range and, if all goes well, the network will meet its stated goal of connecting most of the nation to superfast broadband.

 

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