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Are we building a mediocre NBN for the future?

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Former Prime Minister Malcolm Turnbull and Prime Minister Scott Morrison (image by Dan Jensen)

While the NBN has responded quite well to the demands of COVID-19, further steps must be taken so Australia can benefit from the digital economy, says Paul Budde.

INTERESTING new research conducted by the Bureau of Communications and Arts Research predicts that average Australian data consumption is set to quadruple by 2028, based on figures from 2018. But they also predict that peak bandwidth will grow less rapidly.

In their words:

'Bandwidth requirements to meet demand from 95 per cent of households are estimated to more than double over the decade, from 24Mbps in 2018, to 56Mbps in 2028, while average household data demand is estimated to nearly quadruple from 199 gigabytes per month to 767 gigabytes over the same period.'

It was not a surprise to also read in their paper that this growth is basically driven by video-based services. They mentioned the new TV formats of 4k and 8K that will increasingly become more common use in the market. Other new technologies mentioned are virtual reality and new streamed games.

You might recall that in a previous article, I wrote that the Minister for Communications Paul Fletcher should come up with a "statement of expectations". The Government is the owner of the NBN. They will have to tell what their requirements are so that NBN Co can develop plans based on their directions.

In response to the research paper, Minister Fletcher indicated that NBN Co will continue to upgrade the network based on market demand. However, unlike his predecessor, he hasn't provided any information on what sort of upgrades he is thinking of or in what areas, or which customers he would like to prioritise.

As usual, he started with blaming the Labor Government of a decade ago, failing to take full ownership of the future of the infrastructure.

It will be interesting to see what the policymakers and NBN Co are going to do with the COVID-19 experience fresh in their minds.

The researchers took 2018 as a base: it would be interesting to see what happens if you take 2020 as a base.

While the NBN has held up pretty well in this period, there are still many horror stories of people whose internet connections have not been unable to handle the extra usage. This is especially true where more people in one household had to work or study from home.

People had to find internet connections in the homes of friends and family who did not need extra capacity and move to their places to work.

Of course, it is important to realise that the forecast provides a figure for an average user. However, there are not that many "average" users. A service based on average users is basically a mediocre service.

A large percentage of users will require much higher broadband capacity and at the bottom end, there will be many users who have very low usage. The NBN should cater for the top end of this market.

This includes households with more people who all use the internet for work, study and entertainment; and the small businesses and professionals.

Many of them are totally dependent on the digital economy as well the increasing number of people that will be working from home and the telehealth services, that will only increase over the coming years.

This is what the digital economy is all about and these are the people and businesses that will be driving the digital economy and the digital society. Giving them an average service would be a total disaster for the wellbeing of the country.

It is important to cater for the extra capacity needed by the "above-average" users and that means that significant extra infrastructure is needed to avoid congestion.

I often compare this with freeways.  If you just build a freeway for average traffic you get ongoing bumper to bumper traffic and such a freeway is of little use. To cater for the above-average traffic, you might need a six or eight-lane road. Equally, to cater for the capacity needed by the above-average NBN users you need to overengineer the overall infrastructure.

The vulnerable parts of the network are very well-known. They include nearly half of the fibre to the node (FttN) network, the fixed wireless network and the satellite network.

As important as the increase in capacity will be the affordability of the service. The current price of, for example, a 100Mb service is outside the budget of most people. This issue will be as critical for the Government, as an affordable NBN will mean less money flowing back into the Government coffers.

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Will the Government recognise that a high-speed NBN is an essential service; that to have a modern economy and society it is critical that all Australians can afford higher-speed services? 

Will the Government be prepared to pay for the essential upgrades of the NBN and at the same time keep the prices at affordable levels for all Australians?

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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