The National Broadband Network in Australia - Case Study Example

The National Broadband Network (NBN) in Australia Introduction The National Broadband Network (NBN) is the first wholesale-only open access communications system of Australia (NBN Co Limited 2014). It is being developed to provide telephone and high speed broadband services to all Australian premises. It is projected that the NBN will make use of the most appropriate technology for a given locality with the objective of perking up ways for people in Australia to connect with each other. The plan envisages a situation where each home, workplace and school in Australia will have a link to the NBN through a blend of fibre, satellite and fixed wireless technologies (NBN Co Limited 2014; Visionstream Pty Ltd 2014). From a layman’s point of view, the NBN is a project that will indubitably change the way people in Australia communicate and interact using the internet. However, the project is a controversial one given that some issues relating to how it will be implemented have not been clearly addressed. Hence, there are many questions surrounding the suitability and relevance of the NBN to Australia. For instance, it is even important to question whether the country really needs the NBN; that is, what benefit will the project bring to Australians, and do they really need it? To address the above question and others surrounding the NBN, this essay will apply Bloom’s Taxonomy, which is a classification system of cognitive thinking skills (Moore & Stanley 2010, p. 2). The system uses six levels of understanding and interpreting information: knowledge (i.e. knowing what the issue is), comprehension (i.e. understanding the facts), application (i.e. applying the acquired knowledge to solve the issue at hand), analysis (i.e. examining and breaking the information into parts and making inferences), synthesis (i.e. compiling information and proposing solutions) and evaluation (i.e. making judgments about the information that is synthesised) (Moore & Stanley 2010, pp. 2-5). The essay will use these processes to answer the following questions: (1) Does Australia need the NBN? (2) How should the country implement the NBN? (3) Who are the people that are affected by this project and what is their point of view regarding the project? Does Australia need the NBN? The numerous perceived benefits of having the NBN arguably indicate that the project will be beneficial to Australians, hence the country needs it. Proponents of the NBN project argue that the project would never have been conceived in the first place if the advantage of increased connectivity had not been recognised as a major driver for the future growth of the Australian economy (Findlay 2013). These opinions are supported by the fact that a study conducted recently by Deloitte Access found out that the greater connectivity that will be made possible by the NBN will contribute an extra $16 billion to Australia’s gross domestic product (GDP) by the year 2020. Additionally, the increased connectivity will help drive growth in job opportunities. Moreover, the report highlights the decrease in the cost of doing business (especially e-commerce) and access to education, health and government services as the key reasons for the growth in the GDP of Australia as a result of increased broadband connectivity in the country (Findlay 2013). The benefits of the NBN and to Australia and the justification as to why the country should implement the project are discussed in the sections that follow. To start with, the NBN Co Limited (2014) argues that the NBN has the capacity to change many aspects of the life people of Australia. These include telephone and internet services at home and in areas such as business, education, access to online health services and entertainment. It is projected that the NBN will enable Australians to communicate using their phones more seamlessly. Although it is difficult to quantify the value of enhanced communication to Australians, a research conducted by Deloitte Access Economics (2013) estimated the values based on the increase in consumer welfare relative to willingness to pay. This approach suggested that the annual household benefit due to improved communication is about $74 a year (p. 7). As well, upon completion of the NBN project, more people will be able to telework – that is to work from home or any place that is convenient to them (Deloitte Access Economics 2013, p. 9). This is because they will be able to access an excellent broadband network that will enable them to use services provided over the NBN. With this service, they will be able to access virtual offices and videoconferencing, which will enable them to share large files from the comfort of their homes. Since teleworking means working from or any place that is convenient to the job doer, it implies reduced travel for workers. It also bears the potential to enhance participation for more people, including those who might not be working (Deloitte Access Economics 2013, p. 9). Deloitte Access Economics (2013, p. 9) has estimated that telework employment coupled with savings on travel are worth $381 per household in Australia. Another reason why Australia needs the NBN is the benefits associated with increased access to health, education and government services. NBN will notably have a significant impact on the health sector. For instance, it will enable interactive internet facilities, through which it will be possible to have internet consultations, to provide telemedicine services and to address health deficits by providing internet-based care (NBN Co Limited 2014). In essence, this will help address the gap that exists between health services offered to people in urban areas and those in rural areas. In addition, it is projected that in the future, regional patients in Australia could be able to access online services that offer the capacity to consult with their local doctor or specialist simultaneously through video conference. This will in turn offer great comfort and possible time and cost savings (NBN Co Limited 2014). Improved health outcomes as a result of increased connectivity when the NBN is completed can be summarised as improved medication compliance, and not having to travel long distance to access medical care (Deloitte Access Economics 2013, p. vi). NBN Co Limited (2014) also notes that in the education sector, services delivered over the NBN are capable of changing the way Australians can learn and teach. It is projected that the NBN may help Australians to have greater access to education from where they live. This means that people of all ages – from kids just starting school, to single mothers studying from home, to disabled people – will have greater access to education and hence a brighter future. Yet another reason why Australia needs the NBN is the benefit of increased entertainment and business opportunities. According to NBN Co Limited (2014), the NBN could be utilised by service providers to provide a wide range of entertainment avenues, including online gaming, internet TV that streams video-on-demand services, as well as high quality video calling. With respect to business, the NBN has the ability to alter the way Australians do business by helping firms to eliminate the barriers of distance. Access to high speed internet will offer businesses the opportunity to enhance their productivity, save money and time, and become more competitive on a global scale (NBN Co Limited 2014). Data provided by Deloitte Access Economics (2013, p. 8) suggests that increased e-business will offer a wide array of potential benefits that include reduced travel of workers as well as increased choice. Some of the benefits of increased e-commerce due to increased connectivity are presented in a research conducted by Cater-Steel et al. (2014, p. 95). In this research, the businesses that were surveyed cited improved research and information gathering, improved online marketing, increased communication with existing clients and greater use of online methods in conducting business as some of the benefits of improved connectivity. Deloitte Access Economics’ (2013, p. 8) estimate of the mean annual household benefit in terms of savings on travel due to e-commerce is $156. In addition to this, increased e-commerce is also projected to result in benefits such as a wider variety of goods and services. According to a Data Access Economics report of 2011 (cited by Deloitte Access Economics 2013, p. 8), it has been established that an increase in the variety of services and goods increases consumer welfare such as decreased prices. Deloitte Access Economics (2013, p. 8) has estimated that the average yearly household benefit that could be derived from increased choice due to increased connectivity as a result of the NBN is $453 per year. From the foregoing, it can be argued that there are numerous benefits that can be enjoyed by Australians if the NBN project is implemented and completed. These benefits provide a strong basis for Australia to have the NBN. In short therefore, it is justified to say that Australia needs NBN. The next point that needs consideration is how the country should implement the project. How should Australia implement the NBN? Proper implementation of the NBN will depend on a good framework evaluation and execution of the project. To begin with, it is important to evaluate the relevance of the project. In this regard, it is worthwhile to investigate the current availability and quality of broad broadband in Australia. According to Australia’s Department of Communications (2013, p. 3), about 9.9 million premises or 91 per cent are linked to the fixed line broadband services provided through the Asymmetric Digital Subscriber Line (ADSL) technology. About 3.1 million buildings (that is 28 per cent) can access a high speed broadband platform while approximately 81 per cent of the premises (8.8 million) have access to 3G mobile broadband services. Approximately 59 per cent of the premises (6.4 million) have access to 4G broadband services. In addition to these, all Australian premises are enabled with satellite broadband but there is a limit to accessing to these services, hence not all premises can access the service. In terms of quality, roughly 3.1 million premises in Australia (that is 28 per cent) have access to peak download speeds in the range of 25 megabits per second (Mbps) to 110 Mbps. In addition to this, 7.1 million premises (about 65 per cent) are located in areas that have peak access to mean download speeds of lower than 24 Mbps while about 6 per cent (0.7 million) of the premises in Australia do not have access to a fixed broadband service. Finally, of the premises that have access to ADSL broadband services, approximately 3.7 million are located in regions that have an estimated peak mean download rate of lower than 9 Mbps, while about 920,000 are located in areas that have an estimated peak mean download rate of lower than 4.8 Mbps (Department of Communications 2013, p. 4). Based on the figures presented above, the conclusion made by the Department of Communications (2013, p. 4) is that there are some communities in Australia who have extremely limited access to broadband services. Nonetheless, the Department of Communications (2013, p. 4) also notes that the more significant national issue for Australia is the quality of services offered. Therefore, implementation of the NBN should focus on increasing access to broadband services and more importantly, improving the quality of broadband services that are offered to Australians. These recommendations have been presented to NBN Co, the government-incorporated firm that is in charge of building the NBN. Another issue that needs to be considered is how the NBN will be implemented. Already, two companies, TPG and Telstra, have presented their desire to be allowed to compete against NBN Co in implementing the NBN (Kohler 2014). However, it is argued that allowing rival companies to be involved in the project would turn it into a disaster, and thus, NBN Co should be allowed to run the project as a monopoly (Kohler 2014). It is also argued that if another service provider is allowed to install technology that is similar to that which will be rolled out by NBN Co, there will be a possibility of conflict occurring between the two systems and none of the two systems would be able operate at their full potential (Ramli 2014). Further, it has been suggested that allowing another company such as TPG to prevent NBN Co from being the wholesale provider of broadband services may pose the risk of damaging the economics of NBN and stifle nascent competition in retail communications in Australia (Ramli 2014). Based on these arguments, it is advisable to go with Kohler’s (2014) suggestion that NBN Co should roll out the NBN as a monopoly. The project design features of the NBN are as follows. There will be a transit network project that will involve the construction of 149 transit links that will connect 168 fibre access nodes. Thirty of these access nodes will also be used as points of interconnect. This design feature will allow NBN Co’s central hub to be linked to the modern equivalent of telephone exchanges. The project will also involve design, building and commissioning of the pipe, pit and fibre optic cable within the Temporary Transit Fibre Network to facilitate all new developments and to cater for all new estates located across Queensland and Victoria. In addition to this, there will a design to deliver fibre optic broadband to Tasmania. This will involve setting up of local network and distribution network facilities as well as establishment and delivery of field services in addition to network augmentation and restoration (Visionstream Pty Ltd 2014). The NBN fibre will be connected to reach 93 percent of the premises in Australia. This will incorporate a state-of-the-art fibre technology that will enable NBN to deliver speeds of up to 100 Mbps by connecting the fibre optic cable to each house. There will also be the NBN wireless technology, which will link up to 4 per cent of Australia’s population. Since Australia is a big country, fixed wireless technology will be used to link those premises that will not fall within the range of the optic fibre. In addition, three percent of the population will be able to use NBN satellite technology. The percentage of the population to be covered by NBN satellite is small because NBN has stopped the sale of the interim satellite product, and the full satellite product is anticipated to be launched in 2015 (iiNet Limited 2014). NBN Co is already in the process of moving across Australia installing fibre optic cables to provide superfast internet services. It takes about 12 months to lay the fibre and have premises linked to the NBN service. The process involves NBN CO installing a NBN utility box to the outside wall of each home. This box is fitted to every home at no cost. Once the process is completed, households, businesses and users of the service will be required to select a retail service provider as well as NBN plan in order to enjoy the high speed broadband services (iiNet Limited 2014). Various stakeholders of the NBN and their views regarding the project The key stakeholders of the NBN include the entire Australian population, parliament, politicians, the federal and state governments, the media and firms that will supply the required technologies and equipment, including firms that intend to compete with NBN Co such as TPG and Telstra. The federal government is interested in the NBN because of the various benefits that it will offer to the Australian population as discussed in this essay. In the initial plan, the federal government projected that it would spend A$35.7 billion on the project that will take nine years to complete (State Government of Victoria n.d., p. 2). The government even incorporated the NBN Co in 2009 to ensure that the project becomes a success. State governments such as the State Government of Victoria are also key stakeholders in the project. The media play an important role in spreading awareness and even critique about the project, while the suppliers will be charged with the responsibility of ensuring that the project works as envisaged. Notably, it can be said that suppliers are interested in the project because it is a huge investment and will result in attractive revenues for them. Despite the perceived benefits that Australians will enjoy when the NBN is completed, different stakeholders have politicised the project, and this has various implications for the project. The politics around the NBN project is centred on the fact that the project is huge, as it will be the biggest broadband system in the world (State Government of Victoria n.d., p. 2). In addition, the project is not well understood by many people, hence there is need to deliberate on what it entails. Based on this argument, is can be said that since the NBN affects the entire Australian population, politicking is necessary to ensure that the project achieves the envisaged good social and economic future for the country. That is, despite the benefits of the project, there is need to ensure that it is implemented at an affordable cost, on time and that it meets the needs of all Australians. Some politicians argue that the NBN has not been well publicised in that it has not been given the significant attention that it requires by the media. This is true given that according to Ross (2013), many Australians have little idea about what the NBN actually is. Based on this argument, it can be argued that since Australians are the owners (the project will be funded by the government through their taxes) and beneficiaries of the project, they need to be informed on the necessity and progress of the project; hence the politics is not misplaced. Some of the politicking has also been based on the cost of the NBN project. For instance, whereas the Labour Party had estimated that the project would be implemented over a period of nine years, the current government under the Liberal Party has estimated that the project could be completed four year earlier. Through the Strategic Review of the National Broadband Network, the current government recommends that the project be implemented using a combination of technologies to save up to $32 billion, ensure lower monthly bills and deliver the project to Australians four years sooner than the time initially projected (Liberal Party of Australia n.d.). A review commissioned by the current government (Liberal Party of Australia n.d.) also found a number of issues regarding the project as follows. First is that the project is already two years behind schedule because of an unrealistic evaluation by key internal and outside stakeholders of the complexity as well as time needed to complete the task. Second is that the existing NBN Corporate Plan overestimates revenue until 2021 by $13 billion. Third, it has been observed that NBN is underperforming and this may imply that the company lacks the internal experience in such a huge project, hence the need to use a combination of technologies to implement the project. Another issue is that it has been noted that key decisions regarding the NBN project were taken without relevant commercial rigour and supervision. Other issues that need to be addressed include whether the NBN should be opened to competition by other firms or not. Generally, the intervention by various stakeholders in matters to do with the implementation of the NBN is aimed at increasing awareness about the project, ensuring that it is implemented effectively, and that resources in terms of time and money are saved in doing so. For instance by making everyone aware of the benefits of the project and implementing the project in a shorter time, the government will ensure effectiveness since many people will be able to tap the benefits of the project to improve their wellbeing. This is in addition to the point that the government will be able to get the desired value at a lower cost and in a shorter time. As well, when matters such as the ability of NBN Co to implement the project are addressed, any doubts about completion of the project can be cleared, hence ensuring that the project will be implemented and completed in an effective manner. Conclusion In conclusion, there is little doubt that Australia needs the NBN; this is because of the many benefits that are likely to be enjoyed by the country’s population upon completion of the project. The benefits will be realised in terms of improved communication, ease of access to health, education and government services, increased business and entertain opportunities, and so forth. However, it is clear that before any big project such as the NBN is implemented, different opinions are likely to be raised, and these may promote of stifle the project. In the case of the NBN, various stakeholders have questioned the low publicity given to the project, the cost involved and time of implementation. From the discussion, it is evident that such varied opinions may be helpful to address different issues that may suppress progress and effectiveness of the project. For instance, a review of the project by the Liberal Party government suggests that the NBN can be implemented in a shorter time and at a lower cost than was projected by the Labour Party government. In addition, some views have been expressed questioning the ability of the NBN Co to implement the project alone, and this is vital to ensure that these issues are addressed to ensure effective implementation of the project. References Cater-Steel, A, Tan, W, McLeod, P & Thompson, M 2014, ‘The Australian National Broadband Network: perceptions of regional business managers’, in J Choudrie & C Middleton (eds), Management of broadband technology and innovation: policy, deployment, and use, Taylor & Francis, Oxon, pp. 81-103. Deloitte Access Economics 2013, Benefits of high-speed broadband for Australian households, viewed 11 June 2014, Department of Communications 2013, ‘Broadband availability and quality report’, December 2013, viewed 11 June 2014, Findlay, A 2013, ‘What business needs from a national broadband network’, ABC, 14 October 2013, viewed 11 June 2014, iiNet Limited 2014, ‘All your National Broadband Network (NBN) questions answered here’, viewed 12 June 2014, Kohler, A 2014, ‘NBN should be made a monopoly’, The Australian, 4 March 2014, viewed 11 June 2014, Liberal Party of Australia n.d, Strategic review of the National Broadband Network, viewed 11 June 2014, Moore, B & Stanley, T 2010, Critical thinking and formative assessments: increasing the rigor in your classroom, Eye on Education, Inc, Larchmont, NY. NBN Co Limited 2014, How the National Broadband Network (NBN) works, viewed 11 June 2014, Ramli, A 2014, NBN Co takes on TPG Telecom, The Sydney Morning Herald, 15 April 2014, Ross, N 2013, ‘Product review: The National Broadband Network’, 8 January 2013, viewed 12 June 2014, State Government of Victoria n.d., ‘The Australian National Broadband Network: opportunities for international companies’, viewed 12 June 2014, Visionstream Pty Ltd 2014, ‘National Broadband Network (NBN)’, viewed 12 June 2014, Read More