Stuart Corner
Friday, 19 September 2008 12:09
Opinion and Analysis
Page 2 of 4
In the Australian context, the answer to (1) has long been taken as given. In the case of (2) the previous government prevaricated on the question of regulatory change while Telstra was pushing to rollout an FTTN network, with government subsidy, so the ALP decided that the answer was 'No', offered the subsidy and is contemplating regulatory change on the fly while it decides who to give the subsidy to. For the answer to question (3), see (2).
One of Caio's first conclusions is that, in the UK, there is no need for the unseemly haste with which the Rudd Government is pushing through its NBN.
"Joseph Licklider, one of the founding fathers of computer-based communications, said in 1965 that there is often a risk of overestimating the impact of innovation in the short term, and underestimating it in the long term.
"This could, in the extreme, be the conclusion of our review. There is no need for immediate major government intervention in the short term to accommodate traffic growth, but in the next five to ten years NGA will become a critical infrastructure and, as such the Government should actively support and monitor its development."
Fleshing out this conclusion Caio says: "The high costs of NGA, and high expectations of what it can deliver, tend to raise expectations in some quarters that the Government should make a major intervention – such as a large subsidy or structural change to regulation – to support the market. (Sound familiar)?
It concludes that the case for such a major intervention is week at best, for three reasons. First, broadband penetration is now at about 60 percent (placing the UK at 5th in the OECD); coverage of DSL has reached 99.6 percent; average headline speed has gone from 3.6Mbps to 5.9Mbps; strong competition has delivered value and choice.
Yes, the UK is certainly ahead of Australia there, but remember the Opel project? That would have done much to increase broadband availability; and as for any speed discrepancy, the need for speed in Australia this is likely to be constrained so long as we pay more than countries like the UK for data volumes, which has nothing whatsoever to do with the access network.
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