Economics, Nation Building

Nation Building – Infrastructure – National Broadband Network (NBN)

 

Whilst a fibre optic cable national broadband network would be a ‘nice to have’ piece of infrastructure, the cost for this project is 43 billion dollars (Aus).

In a country with rapid population growth, requiring increased resources, such as water, electricity, public transport and education. It is difficult to place a fibre optic network costing $43 billion dollars (Aus), high on the agenda. This is on top of the already huge national debit following the federal government global financial crises stimulus spending.

A $43,000,000,000 project without a cost benefit analysis, is madness.

There are also reports that suggest that the lifespan of fibre optic cable to be between 15 to 60 years (1)

Currently with Telstra, there is a $349 installation fee. The cost for 100Mbps (fast) broadband are $60 for 50Gb, $80 for 200Gb and $100 for 500Gb per month on a 24mth contract.

Questions arise about the longevity of the home equipment and how soon the equipment will be replaced? Some people are suggesting as soon as four years.

Who is willing to pay $100 or more per month for superfast broadband? Telstra was offering a similar 100Mbs service to over a million homes in Melbourne for $269 a month, with only 200 customers taking up this service.

With the NBN in place, there is unlikely to be any other cabled options available, such as ADSL, as I envisage the copper phone lines would be removed, as they may interfere with fibre optic cabling.

I also envisage that many customers who are not willing to pay expensive costs for high speed broadband, will switch to wireless internet access instead. With the advent of more and more wireless devices, many believe that the future expansion and adoption will be in wireless internet services.

In England, where fibre has been available for some time. Many customers are taking up the slower and cheaper ‘fibre-to-the-node’ option.

It remains to be seen whether the NBN network will be a commercial success or another government white elephant.

Links:

1. http://nbnexplained.org/wordpress/technical-points/the-lifespan-of-fibre/

 
http://www.theaustralian.com.au/news/opinion/broadband-network-will-be-43bn-white-elephant/story-e6frg6zo-1225841083908

http://www.theaustralian.com.au/news/opinion/the-rising-cost-of-rudds-high-speed-broadband/story-e6frg6zo-1225850073276

 

Picture source: http://www.fng-group.net/Cable_networks.html

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