NBN: Foundation for a new industry?

James Riley
Tuesday, 28 July 2009 09:25

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The National Broadband Network could provide the foundation for building an industry generating new export dollars for Australia – or it will be a foreign debt millstone for taxpayers, a Senate inquiry into the project has been told.

Australian Institute for Commercialisation chief executive Rowan Gilmore told the inquiry the NBN project was a once in a generation opportunity to foster R&D innovation and create “enduring” intellectual property for the nation.

As part of any industry development program, Dr Gilmore urged Government to separate its NBN budget items so that investment in capital works – like digging ditches and laying fibre – is accounted in  different column to investment in R&D and “enduring intellectual content.”

The institute has also urged Government to establish a large test-bed of up to 100,000 fibre-to-the-home consumer customers to trial new services. The early roll-out regions of Tasmania could serve this purpose, it said.

“Historically, previous initiatives in Australia basically have resulted in very limited industry development in the telecommunications industry, and it is our belief that the NBN and the spend associated with it could be, if properly managed, encouraged and directed, used to help spawn the growth of considerable new industries in Australia,” Dr Gilmore told the Senate inquiry.

“The NBN is one of those rare opportunities that come along where we have the opportunity to rebuild a solid industry base to expand our industry and either reduce our foreign debt or add to our foreign debt,” he said.

“It can go massively either way, depending on how it is handled.”

The institute’s submission to the inquiry call for “spending on digging up the ground, putting in concrete, inserting cables and similar civil works should be kept separate and not used to inflate the value of the project,” although some committee members suggested the laying of the fibre was the fundamental investment in intellectual capital.

“From a public policy perspective, the public would be interested to know what proportion of that spend is invested in developing know-how and knowledge that is the intellectual capital of the nation rather than in the physical capital that decays,” Dr Gilmore said.

EM Solutions chairman Dr John Ness – also for the Australian Institute for Commercialisation – told the inquiring it would be risky to proceed with a national fibre roll-out before testing the commercial market.

“It would be rather risky to get into this whole network without some solid evidence of what people would want,” Dr Ness said.

“My view is that there would be a huge asymmetry in the residential user compared to the business user. For the business user there might be roughly the same amount of data going both ways; for a residential property there would be as lot more data coming in than going out.”

“I think these ideas should be tested.”