NBN 'a platform for innovation'

Stephen Withers
Monday, 02 November 2009 05:41

IT Policy - Government Tech Policy

The National Broadband Network (NBN) could become a technological platform for innovation by Australian companies, according to a senior executive at a leading professional services firm.

Jim Sloane, UK vice chairman of Deloitte, believes that the NBN will provide a platform for innovation by Australian companies, providing the Federal Government provides the right incentives and regulatory environment.

"I believe the challenge in Australia is to create that innovation, that excitement and enthusiasm for developing applications that will drive traffic and revenue on the network," said Sloan.

"For example, what led to the success of Apple’s iPhone is its continuous adoption of innovative applications now numbering in the thousands.  Similarly, the success of the NBN will depend on the creation and utilisation of applications that can be used on this vast network."

Pricing incentives are the key to the development of applications running over the NBN, he explained.

"Without widespread development of new applications, there is a danger that all you will have is a very fast but largely empty and so underutilised network with a very considerable capital cost associated with it."

Sloan believes that Australia's unique situation in which NBN Co will own all the relevant infrastructure means good regulation will be essential.

"Unlike in the UK where the infrastructure isn't government owned, the role of the regulator in Australia is going to be even more important to ensure a level playing field, where everyone has equal access and the prices are appropriate.
 
"The ACCC is going to have to be very focussed on the efficiency and effectiveness of NBN Co to ensure the cost base is appropriate for an effective pricing structure."

The concept put forward for the NBN is that NBN Co will operate the network and provide access on a wholesale basis. However, there are a variety of models that could be adopted within that. For example, would an individual household purchase services exclusively through one provider, or will they be free to enter into agreements with multiple providers for (say) Internet access, IPTV, home security monitoring, and telephony?
 
"The level of regulatory intervention will be much more significant than any other country," said Sloan.

"The consumer will definitely be expecting this, and importantly, telecommunication companies will be expecting it also. They'll be buying wholesale product from NBN Co, and will want to be sure, that it will be at a regulated price, with full transparency and disclosure and enough scope to make it still a business worth being involved in," he added.