Report says broadband not crucial

The speed data is transferred over the internet does not directly correlate with business and economic productivity, as most studies cannot show a causal link between broadband and productivity, says IT & Business Management Consulting advisor, Guy Cranswick, in a report which he is distributing to the media.

“The quality of debate and insight into Australia’s broadband capability, and the so-called productivity gains that should be possible, has been confused by poorly understood data,” he said.

“Demonstrating a causal link for productivity gains is not precise, but any claim that there is one, is unlikely to be accurate.”

Cranswick’s report pertains to the battle between two major ISPs - Telstra and a consortium called the G9 lead by Optus – to supply the infrastructure to deliver fibre-based high-speed broadband internet to 98 per cent of Australians as proposed by Opposition Leader, Kevin Rudd.

Telstra has been lobbying the Federal Government over the past few weeks to fast-track a decision about who gets the supplier’s rights, blaming the mammoth cost of rolling out the infrastructure for the delay.

The estimated costs of providing both Telstra’s and the G9’s services are between $4 billion and $5 billion each, according to telecommunications analyst, Paul Budde.

“Everybody’s talking about the figures – the Labor Government has their own figure, so does Telstra, and so does the G9. It just depends on how you calculate it,” Budde told ITnews.

The government has suggested it will provide anywhere between $900 million and $3 billion of funding for the network, according to Budde.

Last week the Federal Government proposed an independent panel which includes the ACCC (Australian Competition and Consumer Commission) to review each party’s plans.

Cranswick supports the panel as it should “help to balance the opposing forces of interest in the case,” which so far haven’t been looked at independently, from the ground-up.

He suggests that none of the data made available to the public so far suggests that higher speed broadband will benefit Australia, and goes so far as to say that fibre-to-the-node broadband could be detrimental to local businesses since price, speed and access of service and types of plans offered have previously served Australia well meaning change may not be a positive measure.

“[We are] a median broadband market with access to serve the moderate user. For some reason this situation is not satisfactory to, in particular, the leaders of large media organisations who are vociferous critics of the broadband market,” said the report.

High-speed broadband, such as that which has been employed in South Korea and Japan, has resulted in mixed reports of productivity, according to Cranswick. The Australian market is more like that of Europe, within which some countries have similar broadband infrastructures and plans to those in Australia, he says.

Cranswick’s solution is to obtain data from third-party sources, rather than from vendors and ISPs, which according to Cranswick has turned the broadband debate into a “business case” – which aims to determine the necessity of high-speed broadband in Australia – rather than an unbiased debate based on facts.

“If broadband is critical it’s time for independent research to measure and verify this infrastructure that is important for the future,” said the report.

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