Regional backhaul: Good start, but too little

James Riley
Wednesday, 29 July 2009 10:15

Your IT - Home IT

The Federal Government’s $250 million regional backhaul program would improve broadband competition in the bush, but the investment needed to be four to eight times larger to be effective, Southern Cross Equities telco anayst Daniel Blair said.

Addressing the Senate select committee on the National Broadband Network, Blair said the plan would need to be expanded to an investment of between $1 billion and $2 billion to effectively drive high-speed broadband in regional Australia.

Communications Minister Stephen Conroy announced the $250 million program in May as a Budget initiative to fund backhaul ‘blackspots’ as a priority, and has subsequently announced projects in Emerald and Longreach in Queensland, Geralton in Western Australia, Darwin, Broken Hill, as well as Victor Harbor in South Australia and Gippsland in Victoria.

“We would say that, if you do want to achieve high-speed broadband in some of those regional areas where it is not commercially viable, building out a regional fibre backhaul network would be a logical step, but $250 million is certainly not the number that we come to in those conversations,” Blair told the Senate hearing.

“It is probably a number somewhere between $1 billion and $2 billion, depending on where you go,” he said.

South Cross Equities discussions with ISPs and other services providers had found that delivering a high-speed backbone in regional Australia would enable smaller players to “expand their footprint”. The alternate regional backhaul model – as opposed to the incumbent supplier – would effectively act as a subsidy to last-mile access, which could be delivered through copper, wireless or satellite.

“It would probably be a mix of technologies, and would probably include fibre as well where commercially feasible, to deliver to regional Australians,” Blair said.

South Cross Equities also agreed with the Australian Institute for Commercialisation which had earlier submitted that 100Mbps was probably not necessary for Australian homes – but qualified it by saying the demand would likely expand to meet supply.

In its submission the Commercialisation institute said: “No home in Australia to my knowledge receives its town water direct to its premises through a one metre pipe, nor has a freeway terminating at its driveway.”

Blair responded saying “In our view there is not a demand for 100 megabits per second (but) if you offer someone something for free they will probably take it.”