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Government protection of NBN endangering regional digital development

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MP Mark Coulton announced the Regional Digital Tech Hub (image via YouTube)

It was astonishing to hear the news the Federal Government has set up the Regional Digital Tech Hub as part of their $220 million Stronger Digital Connect Package.

It seemed like it would be great an infrastructure hub. But no it is just another website and a set of new brochures.

Over the last 15 to 20 years, government after government, on federal and state levels, have created these information centres aimed at educating and informing the public about the digital economy and how to become involved in it.

Now there is nothing wrong with education and information, but the question is, after two decades, it is still necessary? 

The problem is no longer a lack of understanding but a lack of good quality infrastructure that people and businesses in rural and regional Australia can use to connect.

When we nowadays read about a hub, data centres, data analytics, very fast broadband, cloud computing and so on come to mind. There is absolutely no lack of understanding on the importance of the digital society and the digital economy, be it in relation to smart farming, smart towns, connected communities, e-education, e-health and so on.

What these regions are screaming for is reliable, quality infrastructure and this requires broadband networks with sufficient capacity, think about highways and freeways rather than dirt roads and goat tracks.

Most people in regional and rural Australia have an even better understanding of the digital society and economy as well as the underlying technologies simply because they far more rely on this than many of their counterparts in suburbia.

It was rather ironic that on the same day the Australian Government announced its new sets of brochures and a website to address the issue, the U.S. Government announced a $9.2 billion investment in regional and rural broadband infrastructure.

A few years ago, Tim and Lesly Nulty – regional broadband experts from Vermont in the U.S. – visited Australia to promote fibre to home business models for regional and rural communities. They have been involved in a range of such small-scale projects in the USA, with many positive results.

Here is an update on their latest project in Mansfield, Vermont.

For this project, they have raised and invested approximately $2.5 mil so far, have 85 miles of fibre up and lit passing about 1,100 premises and are completing another 40 miles. They are in the process of finalising another U.S.$4.5 million (AUD$5.9 billion) of finance which will fund expansion over the next two years which will more than double their network. 

After that, they will be able to finance a modest expansion entirely from internal surpluses, even if they cannot (or decide not to try to) raise more outside investment. The company at that time (around 2024) will have about 2,000 subscribers, about $3.5 million per year in revenue and will be headed for an overall rate of return on investment well north of 20% per annum. 

This will also enable them to finance an additional 20 plus miles of expansion per year.  

Another one of their projects, ECFiber now covers 31 towns covering about 1,500 sq miles with a total population of approximately 75,000.

Unfortunately, there was little interest at state government or industry levels to undertake such projects in Australia, mainly because of the restriction put in place to safeguard the NBN. They were warned that such regional projects would not be welcomed by the major players and that they would not be able to count on their cooperation.

It is a real problem that we are not looking at more innovative, small scale projects in Australia.

We also see such projects developed in the Netherlands where the roll-out of broadband is managed by the cities and provinces, not by the federal government.

Many provinces and cities are actively investing in these projects to supplement the investments made by the companies rolling out the networks. The regulatory condition is that one party invests in the physical network on which other parties can provide their services.

The interesting development here is that now most regional and rural towns have fibre-to-the-home networks (on the map the eastern, northern, and southern parts of the country) the western parts, where the largest cities are, lag. It clearly shows the can-do community spirit in regional areas.

Ending on a positive note, what the new Regional Digital Tech Hub could do is become the catalyst for the development of true digital data in regional Australia. What they really need are infrastructure hubs.

If the National Farmers Federation, who has been given the money to run the hub, could use this initiative as well as their political power, it could turn this project into a real game-changer for regional Australia.

Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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