Opinion: Mr Turnbull, you need to do the numbers

he former Opposition leader needs a lesson in Internet history and the

Malcolm Turnbull’s recent claim that Australians will not want a 100Mbps connection, as offered under Labor's National Broadband Network, ignores the entire history of our access to the Internet and is recklessly misleading.

And for a man who prides himself on his business acumen and record he should be ashamed. Opposing the Federal Government’s National Broadband Network (NBN) plan is one thing, but misleading the public – intentionally or not – on the infrastructure that is supposed to support our economy for close to the next 50 years is unforgivable.

Why do I say this is misleading? In the past few days the former Coalition and Liberal leader told a Sydney audience that there was no demand among households and small businesses for 100Mbps connection speeds.

“The reality is, there simply isn’t demand at the household and every small business level for Internet at that speed, at a price which would make it even remotely financially viable,” Turnbull told a forum he convened in Sydney today (Monday August 9) to discuss Labor’s mandatory ISP-level Internet filter policy.

He continued to say the market for universal 100Mbps fibre Internet was not there – but there was explosive demand for wireless broadband – at which point he held up his Apple iPad device, on which he had been Twittering during the forum proceedings.

(Notably, Joe Hockey also pulled out an iPad to make a point recently too - is this a deliberate tactic?)

“This requires a very different sort of architecture,” Turnbull said of wireless broadband, while also claiming the market would provide the services consumers wanted.

Don’t seem like very controversial statements do they?

Yet, regardless of the debate over whether you think the government should invest in telecommunications infrastructure or if the “market” should be left to its own devices, Turnbull’s comments on speed and wireless are short-sighted and don’t stack up when you look at the empirical evidence. They also ignore the fact the NBN is not just for consumers, as Computerworld Australia has pointed out previously.

Domestically, the best source of empirical evidence for Internet usage is the Australian Bureau of Statistics (ABS) and since the agency started its Internet Activity Survey in 2000, Australians have increasingly demanded faster and faster speeds.

The following – which Computerworld has outlined previously - paints the real picture:

The December quarter, 2000, ABS Internet Activity Survey included the following findings:

  • We had 3.9 million Internet subscribers in total (3.4 million were households, the rest business and government)
  • We downloaded an average of 286MB per month overall (1050 million megabytes in total). Households averaged 171MB while business and government subscribers managed an average of 912MB per month.
  • 3.7 million Internet users, or 97 per cent of the total, had a 56Kbps dial up connection. The ABS did not have statistics for those using DSL at the time, but noted there were less than 40 ISPs (out of more than 600) providing the technology.

Going forward three years to the survey for the September quarter in 2003, the ABS found:

  • A total of 5.2 million subscribers (with household subscribers accounting for 4.5 million of those).
  • We downloaded and average of 901MB per month overall (for a total of 4665 million megabytes). Households averaged 739MB per month while business and government subscribers averaged 1963MB.
  • The number of subscribers by download speed of access connection was collected for the first time. Using its broadband definition to include any connection of equal to or greater speed than 256Kbps, the ABS found there were 657,000 subscribers fitting this description at the end of September 2003.
  • In the September quarter the number of dial up subscribers fell by two per cent to take the proportion of subscribers using this technology below 90 per cent for the first time to 4,522,000.
  • In the same quarter, DSL subscribers grew by 78 per cent to 372,000; just over four per cent of total subscribers.
  • Over three quarters of business and government subscribers (total of 696,000) received less than 256kbps. Only one per cent had a connection faster than 2Mbps.

The ABS Internet Activity Survey for the September 2006 quarter published the following results:

  • There were 6.65 million Internet subscribers (5.83 million were households).
  • We downloaded an average 5435.79MB per month (for a total of 36,148 million megabytes). Households averaged 5045.45MB per month while business and government subscribers averaged 8210.96MB.
  • Non-dial up subscribers accounted for 33,931 million megabytes of the total downloaded amount of data.
  • Dial-up subscribers totalled 2.75 million, while non-dial up rose to 3.91 million.
  • DSL was the dominant access technology with 2.99 million subscribers.
  • Wireless began showing growth with 186,000 subscribers.
  • 19 per cent of the total 820,000 business and government subscribers had a connection speed of 1.5Mbps or greater,
  • 17 per cent of household subscribers (978,000) had a connection speed of 1.5Mbps or greater.

The most recent survey results were for the December quarter in 2009. They showed:

  • We had 9.1 million Internet subscribers (households accounted for 7,459,000).
  • The average amount of data downloaded per month was roughly 14,909MB (for a rough total of 135,674 million megabytes or 135,674 terabytes). The ABS did not differentiate between households and business or government subscribers in this survey.
  • Nearly 90 per cent of connections were non-dial up.
  • DSL accounted for 51 per cent of connections; decreasing from 57 per cent in June 2009 when it was at 57 per cent, due to a sharp increase in mobile wireless via data card, dongle or USB modem (mobile phone data was not counted). This kind of connection increased to 2.8 million subscribers. Note, however, that the ABS does not collect data on whether these subscribers have both a DSL and wireless connection.
  • There were 935,000 cable or fibre subscribers.
  • For business and government subscribers the most common connection speed was 1.5Mbps to 8Mbps (913,000) with 42,000 getting 24Mbps or greater.
  • For households, the most common connection was 1.5Mbps to 8Mbps (2,281,000), followed by 8Mbps to 24Mbps (1,766,000) and 512Kbps to 1.5Mbps (1,201,000). There were 469,000 connections with an advertised speed of 24Mbps or greater.

The ABS statistics clearly show Australian households and businesses / government agencies have continued to adopt faster speeds and download more data at a consistent rate.

The following graphs illustrate this point:

NBN arguments 101: The Need for Speed

NBN arguments 101: The Need for Speed

NBN arguments 101: The Need for Speed

NBN arguments 101: The Need for Speed

Add to this the fact there is already demand across Japan, Singapore, South Korea and several places in the US and Europe for even greater speeds than 100Mbps – in many cases up to 1Gbps for consumers – and it is patently clear Turnbull’s statements do not represent reality and if we were to follow his prescription we would be left far behind the rest of the world. They are also contradicted by pretty much every big IT and telecommunications company in the world and a vast body of research on ICT trends.

But what of the wireless demand trend you ask? Again, the statements from the former Opposition leader are not entirely accurate and here is an extract from something Computerworld has already published:

“While it has been well-established that we are enamoured by mobile devices and are likely to continue buying them in the next few years – added to the marginal decline in desktop sales - it doesn’t necessarily mean we don’t want a fixed line Internet connection. Drawing a definitive conclusion that because we like mobile devices we only want mobile broadband connections is unwise.

“The first reason for this is none of the relevant statistics – which have already outlined - tell us how many people own more than one kind of device (both mobile and desk-based). It is very common for consumers and commercial workers alike to own a smartphone, a laptop and then also work on a desktop PC either at the office or at home. Then there's the emerging tablet market – anecdotally, almost all the iPad owners we have encountered in past months are using it as a fourth device, rather than a replacement.

“Certainly there will be many variations on ownership and usage trends – the potential combinations are numerous – but the data still indicates a significant need for desktop PCs, which to date have only connected via fixed line services. The ability to use mobile broadband connections through these devices has increased, whether through tethering a mobile phone, using a dongle or acquiring a fixed wireless broadband service like vividwireless. However, there are few statistics to prove this has become prevalent, particularly in Australia; in fact, the demise of Unwired proves otherwise for the urban-based majority of the population.

“The second reason you should be sceptical when people use the mobile device popularity argument is that there is no evidence to support the view that mobile devices only connect via mobile broadband connections. On the contrary, it is reasonable to suppose many mobile devices still connect to the Internet and download data via fixed-line services, whether it be:

  • Via a cable plugged directly into the device;
  • Through a docking station on a desk;
  • Across a wireless LAN or Wi-Fi connection enabled by a fixed line connection;
  • Or via connecting a device such as a smartphone or tablet PC to another device such as a notebook or desktop PC to download files and update software; also known as tethering.

“In short, yes we do love the mobility trend and the exciting new devices hitting the market but the data shows device preferences are not a killer argument that can be used by those against a fibre optic network.”

There is also a strong technological argument as to why wireless as a technology is not as attractive for a high-speed national network as fibre because of the consistency of service and upgrade path that the latter provides. In any case, the existing copper network will need to be replaced in the not too distant future and wireless networks still need a significant fibre investment - something the Opposition seem intent on avoiding discussing.

We’ve said time and time again that the general idea of having a ubiquitous, scalable FTTP network as the backbone of the digital economy for the next 50 years is something that really shouldn’t be in question and that there is no reason the Opposition can’t take the good elements of the NBN and turn it into a better plan – as the vast majority of the industry are demanding.

To not do so and instead play politics through the low-level of public knowledge about ICT and the value it brings to an economy is reckless and risky.

(See all of the OECD stats and graphs on broadband in our slideshow)

Additional reporting by Renai LeMay from Delimiter

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