Some thoughts about broadband from my visit to Adelaide yesterday

Yesterday the Parliamentary Committee which oversees the NBN visited the pleasant South Australian town of Willunga, in the wine growing district of McLaren Vale on the southern outskirts of Adelaide. The purpose was to have a look at the NBN installation in the town (one of the five first release sites on the mainland of Australia) and hear from some of the locals about the impact of the NBN.

The NBN passes around 1000 premises in the town, with most people having opted to have a connection to their home (not a hard decision to make since the connection is free.) The network has been operational since late last year, although that does not mean everybody is using the network. Around 40 per cent of residents have chosen to take a service. In the Willunga Library, NBN connected computers have only been operating for about a week. (When we tried them, for some reason the speed test said they were only delivering speeds of about 400 Kbps – that is, less than half of one per cent of the promised speed – but I suspect that is an issue with the operation of the computer, not the network.)

We visited Willunga High School and heard a presentation from the impressive and enthusiastic principal, Janelle Riemann, together with a number of her staff and senior students. Willunga was the first high school in South Australia connected to the NBN. Janelle spoke about the school’s experiences and the work they are doing to give their students the benefit of a technology-rich education. For example, a biology teacher told us how she puts up Powerpoint presentations and Youtube video links on the school’s intranet, for students to download and read or view in advance of each lesson. We also heard about the online system for taking the attendance roll each morning – with the parents of absent children receiving an SMS after the cut off time to notify them that their child is not at school.

A number of points struck me from the visit to Willunga High. First, it turns out the school was already on a fibre connection before the NBN came to Willunga. (This is not surprising as a Commonwealth Department of Education report last year found that around 65 per cent of Australia’s 10,000 schools are already connected to fibre.) They used to receive a 10 Mbps service and now they receive a 100 Mbps service, for about the same price (roughly $140 a month). But this raises a pretty obvious question: if the school was already connected to fibre, what is the point of building a new fibre connection to the school (at a cost, probably, of several thousand dollars)?

The constraint the school faced previously was an economic one – the price it was charged for the use of the fibre by the network owner, Telstra, making it unaffordable to purchase a higher bandwidth connection. Does it really make sense to spend over fifty billion dollars on a new fibre network if you want to achieve high speed connections to schools? Wouldn’t a more sensible policy be to fund fibre connections to the one third of schools that don’t have them (or at least as many as can feasibly be connected –some will be in extremely remote areas where there is no fibre instrastructure at all); and to allocate funding towards giving schools much greater capacity over the fibre network to which they are already physically connected?  

Second, a lot of what the school is doing makes excellent sense – but it actually does not have much to do with whether there are direct fibre connections to homes in the area. Yes, it is great that the NBN has been a catalyst for the school to adopt e-learning techniques. But aren’t there much more cost effective ways to do this? Do you really need to spend $50 billion on a new national network? These are the kinds of questions a cost-benefit study should have looked at – in determining whether the cost of NBN is justified by the benefits it brings. Unfortunately, we have not had a cost-benefit study – but we have had highly political advocacy by the Gillard Government aimed at convincing people that a new fibre network is the same thing as e-enabled education. It is not – and we need to understand that the two things are quite distinct.

While I was in Adelaide I took the opportunity to visit Adam Internet. This is a very impressive Adelaide-based ISP which among other things operates a WiMAX network with some 60 base stations delivering wireless broadband to several thousand households across the city. The genesis for this was South Australian government work which identified that over 50,000 premises in Adelaide could not receive decent broadband services (typically because they are too far from an exchange, or because the Telstra network features known ‘DSL blockers’ such as a pair gain system.) The SA government provided capital funding towards the cost of the network which Adam Internet has rolled out. Until Stephen Conroy cancelled federal government’s ABG (Australian Broadband Guarantee) scheme with effect from 1 July 2011, each customer installation was also eligible to receive funding under the ABG.

The Adam Internet network reliably delivers a peak speed of 12 Mbps and customers are reliably receiving a steady 8 to 9 Mbps – and it does this for people who otherwise were unable to get fixed line broadband. It has been in service for eighteen months and is steadily winning new customers. It is a very good example of a flexible, rapid private sector response – supported by targeted but quite modest government grants – which has delivered a good quality broadband service to people who need it and couldn’t get it otherwise.

This is an excellent illustration of one of the fundamental problems with the approach of the NBN – the broadband nirvana which it promises is going to take a very long time to arrive. Even if the NBN’s rollout targets are met – and NBN Co is already many months behind target – the network won’t be finished until 2021. There are lots of Australians who would just like to have a reliable, affordable decent speed broadband service now – as the response to Adam Internet’s product demonstrates.

One last thing: the visit offered a good reminder of an earlier missed opportunity in wireless broadband. In Willunga the local Onkaparinga council told us how excited they had been about the Howard Government’s One Billion Dollar Broadband Connect program announced in 2007 – under which Optus and Elders were to have rolled a wireless broadband network to serve rural and remote Australia. They expected real and rapid benefits for their area as a result. But the benefits never arrived – because for political reasons Stephen Conroy cancelled the project shortly after Labor came to power in November 2007. Hundreds of thousands of people have been denied good broadband as a result.