We’re on a road to nowhere …

Australia is stuck in the slow lane of the information superhighway. Unless we change gears soon, we will end up becoming road kill. The way we interact with the world is changing as we move from push models to pull models (PDF 276KB).

The people who are increasingly using pull technologies are what I refer to as “by-passers”. By-passers cannot be categorised by normal demographic definitions, but more from their technological abilities. By-passers are growing in numbers every day. How governments and business deal with them and understand the pull methodologies they employ, will very much determine their continued existence.

Many in the ICT industry argued that Telstra should have been split in two. Sell the retail business, but keep the wholesale business. The wholesale side provided the infrastructure to deliver communication technologies to the home. It has now become obvious that the government should have listened to the techies*.

Currently, out of 26 OECD countries, Australia ranks second last for average broadband download speed. New Zealand at more than double the average comes in at number 13. In fact, what the telco’s pass off for broadband is what Fairfax Media Chief David Kirk calls Fraudband.

Broadband is a minimum of ten megabits per second (MPS). Currently, ADSL2 has a theoretical speed of 24mps, but most don’t even come close to achieving this speed and is dependant on your distance from the local exchange. Many are unable to get ADSL2. ADSL will give you half a MPS, twenty times less than the ten mps required.

The problem with Internet access in this country is that it is still delivered via twisted copper wires. Only a slow analogue signal can be sent, not the digital signal that a computer requires. A computer runs at a basic level on a binary mode. Zeroes and ones, on and off. Think of the old telegraph system of long and short beeps, dots and dashes. By combining dots and dashes you can form a code. They way a binary message is passed down a phone line is the top of the wave is on and the bottom of the wave is off. A modulator-demodulator (modem) converts this wave signal into a digital signal.

To achieve true broadband we need a fibre optic network. Fibre optics work by sending light down the fibre. Light is either on or off. The first phase in providing a true super information highway it to roll out what is called Fibre to the Node (FttN). FttN is the backbone. But we also need Fibre to the Home (FttH). Telstra says it wants to build this network but wants to be able to charge what it likes to others to use this network.

The ACCC has basically said “over their dead body” to this proposal. Telstra has begun a campaign to ensure they can maintain their monopoly, setting up a website called Now We Are Talking. It is likely the Federal Government will cave to Telstra. This will not be in consumer’s interests.

This is why Telstra should have been split. The Government could have continued with developing a first class communication infrastructure, delivering at affordable prices, which would have provided healthy dividends well into the future.

Now I am going to hate myself in the morning for saying this, but Kevin Rudd’s plan for a broadband network is spot on. The Government cries that he is raiding the Future Fund, and spending the pensions for those for whom it was set up, is both disingenuous and unworthy. For Rudd’s plan will deliver what the techies have recommended. An infrastructure company that will grow in value, deliver true competition at the retail level and provide an endless stream of dividends.

He is also correct in that Australia needs to prepare for the end of the mining boom. The current Federal Government only seems to comprehend a business of digging it up, putting it on a ship and sending it overseas.

Could others provide this network? I don’t believe so. You only have to look at what various councils did to stymie the Optus cable rollout. Unless they can get legislation to rollout a network unhindered, they are unlikely to do so. These organisations could do this via using existing conduits, but gaining access will be difficult.