{"id":1203,"date":"2013-09-24T16:24:05","date_gmt":"2013-09-24T06:24:05","guid":{"rendered":"https:\/\/reckoner.com.au\/?p=1203"},"modified":"2017-10-24T08:24:23","modified_gmt":"2017-10-23T22:24:23","slug":"australias-broadband-history","status":"publish","type":"post","link":"https:\/\/reckoner.com.au\/features\/australias-broadband-history\/","title":{"rendered":"Australia’s Broadband History"},"content":{"rendered":"

Since the conclusion of the 2013 federal election<\/span>, nerds all over Australia have been mourning the potential loss of the crown jewels – a fibre to the premises National Broadband Network. The minister for communications, <\/span>Malcom Turnbull, has responded to the latest effort from pro-FTTP advocates to change the new government’s approach to the NBN,<\/a> stating that there will be a strategic review of the NBN within 60 days, which will outline the approach the NBN will take from then on, but don’t expect any big changes from the Liberal party’s policy.\u00a0<\/span>With that announcement as the latest milestone of Australian broadband, I thought it would be interesting to see how we arrived at this point, to give some context to the issue.<\/span><\/p>\n

The very first time “<\/a>broadband” appeared in parliment<\/a> was in 1964 by MP Alan Hulme. He was\u00a0explaining how the Brisbane-Cairns broadband microwave link (used for phone calls) was set up by private contractors, not by the government. But it wasn’t until September 1994, when Senator Tierney gave a speech in the senate<\/a> about the “information superhighway”<\/em> and\u00a0called on\u00a0Australia to rapidly adopt this technology.<\/p>\n

“What we have evolving in this country\u2014unfortunately, like many other industries\u2014is a massive duopoly that not only controls the means of communication but also has enormous control over the products that travel on that communications network. With the concerns with monopoly power and duopoly power that we have always had in this country, a new era is developing, and the government is just sitting on its hands and letting it develop. It does not have a regulatory framework for this and, indeed, it does not really have a policy to counter this.”<\/p><\/blockquote>\n

The Senator even discussed a worry that if broadband isn’t created on an open playing field, monopolies will occur to the detriment of Australia’s economy. It is\u00a0the first time a politician stated on the record that broadband will shape our country and is something we should invest in and support.<\/p>\n

\"turnbullAlso in 1994, the Broadband Services Expert Group was established. They were tasked with investigating the opportunities and challenges relating to the Internet in Australia at the time, and how Australia can better prepare and plan for an increasingly digital future. The report, “Networking Australia’s Future” was released in 1995<\/a> and despite almost 20 years of technology change, it’s still an interesting read. My favourite part of the report is the first section titled,\u00a0“the communications society”<\/em>, because even 20 years ago, it was visible as to how the Internet would change our lives.<\/p>\n

“The Group believes that, rather than seeing the communications network as a system that connects us to phones, televisions and computers, we should see it as a platform underpinning our society, supporting a diverse and interwoven range of social, business and community activity.”<\/em><\/p><\/blockquote>\n

Networking Australia’s Future is quite prescient and hard to read without a little twinge of regret as to what could have been for Australia. The forming of the BSEG and the Networking Australia’s Future<\/a> report was really the first time the government gave broadband and the Internet proper attention.<\/p>\n

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Then Prime Minister, Paul Keating gave a speech when launching the report<\/a>, which was\u00a0very enthusiastic and forward-thinking of the potential of the Internet and technology. This quote from that speech will hit home in the hearts of many who grasp the importance of the Internet:<\/p>\n

“We have to decide, as from now, that access to the national information infrastructure will be no less a general right than access to water, or public transport or electricity.”<\/em><\/p><\/blockquote>\n

Let’s put that into perspective — in March 1995, we had the Prime Minister of Australia saying that the Internet is as important to society as water and electricity. In 2013, we have a Prime Minister saying<\/a>, “Do we really want to invest $50 billion of hard earned taxpayers money in what is essentially a video entertainment system?”<\/em><\/p>\n

Networking the Nation<\/h1>\n

The earliest traces of federal government putting serious money where their mouth is in regards to broadband was the Networking the Nation<\/a> fund, which began in 1997 via some of the money received from the privatisation of Telstra. Between 1997 and 2004, $322.5 million was distributed to 762 projects across predominately rural Australia. A list of all the projects funded are on the archived DCITA website<\/a>, but in Victoria at least, dozens of “e-cafes” were set up in regional towns, many community based ISPs were funded, community based training groups sprung up and a few councils used it to expand CDMA phone coverage. The biggest chunk of funding was used by each state government to start state & local government e-portals, to provide online services.<\/p>\n

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1999 saw the release of a National Bandwidth Enquiry<\/a> report and a Telecommunications Service Inquiry<\/a> report appeared in September 2000. The government didn’t do much with this information, but large swathes of funding was soon to appear, via two reports published in 2002 and 2003 – the Connecting Regional Australia<\/a> report, part of an inquiry into the status of telecommunications in regional Australia and the Broadband Advisory Group’s report into various states of broadband connectivity in Australia<\/a>. These two documents lay the foundation for future broadband related expenditure in the Howard era until late 2006\/early 2007.<\/p>\n

Not long after those nascient reports, a National Broadband Strategy<\/a>\u00a0was formed in early 2004, together with the state governments (except Victoria, hah)<\/em>. The main purpose of this strategy was to have a document that explained what broadband is, why it’s important and what Australia wants to do with it.\u00a0The most interesting thing in the strategy is the vision for how Australia should approach broadband Internet:<\/p>\n

“Australia will be a world leader in the availability and effective use of broadband, to deliver enhanced outcomes in health, education, community, commerce, and government and to capture the economic and social benefits of broadband connectivity<\/em>“<\/p><\/blockquote>\n

Australia, a world leader! How aspirational!<\/p>\n

In the 2003-2004 financial year, the government responded to the Connecting Regional Australia<\/a> report, with funding of approximately $170m. The main portion of that going towards the High Bandwidth Incentive Schcme<\/a> (HiBIS) – which essentially gave money to ISPs to price services in certain rural areas equivalent as to what is available in the metro areas. This brochure explains how it worked.<\/a><\/p>\n

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Connect Australia<\/h1>\n

In 2005, the largest piece of funding for broadband yet, arrived via the Connect Australia<\/a> package. It was $1.1bn, predominately to bring those with no internet or poor internet (blackspots in metro areas, regional areas)<\/em> up to scratch. The vast majority of the package was for a program called Broadband Connect<\/a>, which was to provide $878m over 4 years, to (once again) improve Internet access in regional areas. A smaller project, Metropolitan Broadband Connect<\/a>, funded to the tune of $50m, never really went anywhere. The crux of Broadband Connect was to give ISPs a subsidy for the high cost of connecting rural customers. It basically expanded HiBIS to more areas. Broadband Connect consumed approximately $270m of the $1.1bn of funding allocated to it, until it was phased out in 2007 and replaced by the Australian Broadband Guarantee<\/a> – again, cash incentives for ISPs to provide a minimum 512k service in a rural area. The Australian Broadband Guarantee was kept around until June 2011.<\/p>\n

The next major report into Australian broadband was the Broadband Blueprint<\/a>, released in 2006. This blueprint, despite over 6 years old and noting that some of the technical things are slightly obsolete (3G was new and broadband over powerlines never really happened)<\/em>\u00a0is still reflective of the general state of broadband in Australia. It details how many people are using broadband and that the growth of Internet services is increasing and so on. Generally, the Internet is still<\/em> very important and serious business. Something we’ve known since 1994.<\/p>\n

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Broadband Blueprint<\/h1>\n

Where the blueprint gets interesting are the pages discussing broadband speeds and rolling out fibre across the country (pg 30 & 31<\/a>)<\/em>. The blueprint is quite proud of the fact that 90% of Australians can already access broadband with speeds between 2 and 8 Mbps. It also discusses the then government’s view of fibre, which summarised, is basically “too expensive”. The last paragraph of the discussion notes that Telstra was disucssing with the ACCC about building an FTTN network in capital cities and a “group of nine” telcos (which were AAPT, Internode, iiNet, Macquarie Telecom, Optus, Powertel, Primus, Soul and TransACT) were also detailing the build of an FTTN network (which if you’re interested, can be found in this PDF<\/a>).\u00a0Overall, the blueprint is quite positive about Australia’s broadband situation at the time, despite the group of nine telco’s similarly aged & detailed report stating that Australian access to broadband is sub-par.<\/p>\n

Where the blueprint leads to next was the creation of Australia Connected<\/a>, in June 2007 – the basis for the now infamous $1bn of funding for OPEL<\/a>, a joint venture between Optus and Elders – to bring widespread, faster internet to rural Australia. $600m of funding came from the earlier $1.1bn Connect Australia package, with an extra $358m supplied to further extend the range of the OPEL network. Australia Connected also aimed to assist in a regulatory way to commence a privately built fibre broadband network in capital cities and regional centers<\/a>, from either Telstra, or a Group of 9 consortium.<\/p>\n

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Up to this point, the past 15 years of federal funding has been dominated by improving access in rural and regional areas. Metropolitan network access was left to the market (aka Telstra) to take care of as they saw fit. Then the 2007 election happened<\/a> and a change of government took place. Out with the Libs, in with Labor. They even renamed the department, dubbing it, The Department of Broadband, Communications and the Digital Economy<\/a>. Before this, the Department of Communications, Information Technology and the Arts was responsible for broadband and internet access related issues. Arts was split off to the Department of Regional Australia, Local Government, Arts and Sport, leaving the new DBCDE to concentrate on the Internet and other communications related things.<\/p>\n

For the first time, there was a minister directly responsible for broadband.<\/p>\n

The new change in leadership also axed the OPEL plan, stating in the 2007-2008 DBCDE annual report<\/a> that:<\/p>\n

“The implementation plan submitted by OPEL Networks failed to demonstrate that it would meet the terms of the funding agreement. In particular, the plan did not achieve the required service coverage. As a result, on 2 April 2008, the Government announced that the OPEL Networks broadband project would not proceed.”<\/em><\/p><\/blockquote>\n

National Broadband: Take 1<\/h1>\n

The first stab at a national broadband network, with equal access for metro and rural Australia, kicked off on April 11th, 2008.\u00a0A request for proposals<\/a> was put up by the new DBCDE administration to build a nationwide fibre to the node or fibre to the premises network. Section 1.3 of the RFP outlines the requirements of the network – with requirements of note being 12 Mbps minimum, five year rollout and uniform pricing across the nation. The government would supply $4.7bn of funding and tweak any laws or regulations to suit the winning proposal. The proposals will be judged by a “panel of experts<\/a>“, who on the 22nd of Jan 2009, submitted this report to the government<\/a>.<\/p>\n

To be blunt – it was a flop. Unfortunately, we do not know the specifics of the RFP evaluation, as that is all removed from this PDF (over 150 pages are missing), but the executive summary gives us some hints:<\/p>\n

    \n
  • Due to the GFC, there were not as many, or not as ambitious proposals submitted.<\/li>\n
  • None of the proposals had a business case that supported a 5 year roll out to 98% of Australia<\/li>\n
  • Rolling out an FTTN network has no efficient upgrade path to FTTP, putting into doubt the appropriateness of building an FTTN network<\/li>\n
  • An FTTN network is heavily reliant on Telstra and compensating Telstra for the use of the “last mile”. None of the proposals were keen on this.<\/li>\n<\/ul>\n

    National Broadband: Take 2<\/h1>\n

    The evaluation report did give the government advice on how to achieve the outcomes the government wants, but it was kept secret.\u00a0Three months after submitting this report to the government, on April 7th 2009, the NBN as we now know it was announced via this press release<\/a> and this press conference (transcript of press conference<\/a>):<\/p>\n