Every vision starts with a visionary, and the Australian national government's grand scheme to deliver broadband to every Aussie is no exception.
Australia's National Broadband Network (NBN) is a new, high-speed broadband network aimed at providing faster, more reliable broadband access to all Australians, and helping bridge the broadband performance gap with other advanced countries. Spearheading this massive undertaking is the man who has championed it from the get go—Senator Stephen Conroy, Australia's Minister for Broadband, Communications and the Digital Economy.
Construction on the NBN started in 2010 and is projected to continue through 2021 at an estimated cost of U.S. $37.5 billion, with the government footing about three-quarters of the bill. The goal is to provide fiber-to-the-home (FTTH) to 93 percent of Australians, and a mix of next-generation fixed wireless and satellite technology for the remaining 7 percent. Working through NBN Co—the company established to design, build and operate the NBN—the government will sell wholesale services at a uniform price to service providers, which in turn will offer retail services to consumers.
For a progress update on the NBN as well as insights into the strategy, I spoke with Conroy, who last March was named "Intelligent Community Visionary of the Year" for his efforts by the smart-city think-tank the Intelligent Community Forum.
Please give a status update on the progress of the NBN.
Senator Stephen Conroy: NBN Co's 2012-15 Corporate Plan confirms that the NBN is on track meet its target of having construction commenced or completed for 758,000 homes and businesses by the end of 2012 and for about 3.5 million by mid-2015. Over 20,000 Australians are already using the NBN across all three technology platforms. Construction of the NBN fiber network is now underway or complete in over 50 brownfield locations.
NBN Co is also building fiber infrastructure in new developments spread across 180 locations nationally. Commercial NBN fiber services are being offered to residents and business owners in a number of communities in New South Wales, Victoria, Queensland and South Australia, where the first services over the fixed wireless network are already available. Fiber services are also available in several locations in Tasmania.
What sort of adoption rates are you seeing?
Senator Stephen Conroy: The average take-up rate of NBN services in sites active for six months or more is 21 percent and increasing, with some areas seeing take-up rates of 40 percent and higher. This is pleasing given that a take-up rate of 6 percent to 12 percent is needed to make the NBN viable, according to an implementation study.
The U.S. Government has taken a relatively hands-off approach to broadband delivery, urging carriers to build out and own the network. What are the pros and cons of this approach versus the Australian model?
Senator Stephen Conroy: The approach to broadband delivery differs across countries depending on a range of factors, including the economy, geography, government policies, telecommunications market structure and population. But governments do have a responsibility to be involved in providing fast broadband to their populations. Like water and electricity, fast broadband is an essential utility for the 21st century.
The U.S. Government is supporting a number of initiatives with the aim of accelerating the rollout of broadband services across the country. For example, the U.S. Federal Communications Commission's (FCC) National Broadband Plan aims to ensure that by 2020 at least 100 million U.S. homes should have affordable access to download speeds of at least 100 megabits per second (Mbps) and upload speeds of at least 50 Mbps. The Australian government is taking a different approach because the telecommunications landscape in Australia is different from that of the United States. Notably, the Australian government has full constitutional responsibility for telecommunications.
What is the impact of the NBN on competition among service providers?
Senator Stephen Conroy: We have a national highly integrated incumbent, Telstra, and through the NBN, the government is delivering the structural separation of Telstra from the access network. Under an agreement between NBN Co and Telstra, Telstra customers will migrate off the copper network and onto the NBN. The NBN not only delivers fast, reliable and affordable broadband, but as a wholesale network, it also provides a level playing field for retail service providers, increasing retail competition.
What are the main challenges you're facing with the NBN rollout?
Senator Stephen Conroy: There are challenges involved in rolling out any major infrastructure project, and the NBN is no different. All major infrastructure projects draw criticism. What helped us through all the challenges was clarity in our goals and the strength of our demonstrable commitment.
In our specific case, we faced considerable opposition in passing all the necessary legislation through Parliament. The project has been facilitated by our agreement for the incumbent operator to migrate services to the NBN, but this was a tough and lengthy negotiation. The single biggest challenge, though, has been building a new enterprise from scratch and resolving the myriad policy issues along the way. We are now ramping up the rollout across the country, which presents other challenges, but we are on track to meet our rollout targets.
What would you like to achieve with the NBN in the next five to 10 years?
Senator Stephen Conroy: I expect that the NBN will continue to deliver fast, affordable and reliable broadband across Australia, with the project completed by 2021, as outlined in the 2012-15 Corporate Plan. But the NBN has always been about more than just providing faster Internet speeds; it's about building the infrastructure that will be integral to Australia's social and economic future. Over the next five to 10 years, thanks to the NBN, I think we'll start to see productivity gains, as well as great innovation in areas such as education, health care, agriculture and small business.
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