Greg Taylor gctaylor at internode.on.net
Sun Oct 22 16:16:52 AEST 2006

On Sun, 22 Oct 2006 11:35:47 +1000, Jan Whitaker wrote:
> Maybe one of our Qld members/ex-members of link (I've cc'd Ann
> Moffatt) can comment. Jan

Given the Beattie government's appalling record in delivering and managing public infrastructure, I would be amazed if it could pull this off.

Governments and telcos around the world are struggling with the concept of FTTH, precisely because there is no viable business model.  Beattie is right in one sense though.  Telecommunications infrastructure is an obvious example of a natural monopoly and is therefore something that should be financed by government, and rented to telcos and ISPs.   But the federal government made a huge mistake when it declined to break up Telstra and retain ownership of the infrastructure, so it's hardly realistic to expect any real leadership on the issue from there.

I'm dubious about the costings too.  $550 million seems way too low for a FTTH project of this size.  Greater Brisbane has 10% of the population of Australia, yet recent estimates of the cost of delivering high-speed broadband across the country have been in the region of $20 billion.  Brisbane's share should therefore be closer to $2 billion.  Granted, there are cost differences between regional and metro areas, but the discrepancy still seems too great.

The next question is return on investment.   These costs average out between $1000 and $4000 per household, and that's just for the infrastructure.  Content is an additional cost, and given the low take-up rate of pay-TV and HDTV in Australia, it would seem foolish to expect Australians to pay extra to receive the existing low quality content in high definition.

There is an obvious role for the federal government here.  Perhaps they might even consider using the billions from T3 to fund some decent telecommunications infrastructure.  After all, Treasury is already wallowing in cash, so it's not as if they need more.

In summary, while it's a welcome change for a state government to get off its collective backside and actually build some infrastructure, I have doubts about the benefits of individual states going it alone without a comprehensive national plan.  I hope I'm wrong, but I expect the Beattie proposal will be yet another example of political hot air.


P.S.  I note the media puff refers to "100MB/second".   I assume they meant 100 Mb/sec (megabits).  A minor quibble, but if they can't even get that right ...

>> From: <statements at qld.gov.au>
>> Sent: Sunday, October 22, 2006 7:10 AM
>> Premier and Minister for Trade
>> The Honourable Peter Beattie
>> 22/10/2006
>> Brisbane residents could be the first in Australia to access next
>> generation broadband under a proposal to build a cutting edge
>> fibre optic network far superior to any existing
>> telecommunications infrastructure in the country.
>> Premier Peter Beattie said the Queensland Government would next
>> month seek expressions of interest from the private sector to
>> gauge commercial interest in financing the $550 million project.
>> "This is a leading Smart State project that has the potential to
>> boost the Queensland economy by $5 billion and create more than
>> 15,000 jobs," Mr Beattie said.
>> "The Federal Government has failed to deliver ultra high speed
>> broadband services to the general community.
>> "That's why our Government is stepping in to work with the
>> private sector in Brisbane to address this market failure which
>> is holding back business development and innovation.
>> "At 100MB/second - at least 100 times faster than regular
>> broadband - the proposed network would give householders instant
>> access to high definition video such as movies - eliminating
>> frustrating download times.
>> "The network would also enable live high definition video
>> conferencing between residential users from a regular desktop PC
>> or laptop.
>> "The fibre optic cable, which would run along existing power
>> lines directly to homes and businesses, would have the capability
>> to deliver the full range of telecommunications services, meaning
>> householders would only be charged one access fee for broadband,
>> telephone and pay television.
>> "For businesses, industry and service providers the network would
>> enable the transfer of large files, such as engineering design
>> files, x-rays and large medical files."
>> Mr Beattie said next generation broadband would also enable the
>> Government to realise its investment in new and emerging
>> industries such as biotechnology.
>> "It would also give Brisbane a further competitive advantage in
>> attracting new businesses and industry to the city," he said.
>> Mr Beattie said the cable would be rolled out in the Brisbane
>> local government area, using state and local government assets
>> such as pipes, electricity poles and road and rail easements.
>> "This project is possible in Brisbane because we have a
>> supportive local council and State Government willing to work
>> with the private sector and facilitate access to government-owned
>> infrastructure to support the construction of a new network.
>> "If the project proved successful in Brisbane, there may be
>> future opportunities to roll out similar solutions across the
>> rest of the state."
>> The Coordinator-General will accept non-binding expressions of
>> interest from the private sector from next month with submissions
>> due by the end of January.

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