Sep 022012
 
fiber optics are the key part of fast communications

Despite the enthusiasm to be the first US city to have the high speed broadband offered by Google Fiber, it turns out interest in the Kansas City rollout is only running at half the rate expected.

This is consistent with the Australian NBN experience, with the takeup rate so far a dismal with less than 20% of Tasmanian properties passed taking the opportunity to get connected – only 10% of accessible premises are projected to sign up in 2012 according to NBNCo’s corporate plan.

Both the poor take up rates in the US and Australia raise the question “do we really want fibre broadband?”

The main difficulty are the incumbent players. In Kansas City reports are that Time Warner, the incumbent cable operator, is offering deals to lock their customers into existing plans.

A similar thing has happened in Australia with the major operators locking customers into existing ADSL and phone plans so subscribers face penalties if they churn across to an NBN service.

Most of those subscribers don’t need to churn right now, for most users the data plans they are currently on are fine and the NBN prices aren’t substantially different to the existing ADSL charges. In Kansas City, Google’s prices are lower, but the service is some way off and Time Warner can offer a connection now.

Another problem is demographics, neither Tasmania or Kansas City are major digital industry hubs and parts of both regions are economically distressed, which means they are less likely to take up the offer – or be able to make the investment – to get get connected.

That latter problem is the most concerning, as regional disadvantaged areas have the most to gain from being connected to broadband.

Just as towns lobbied in the 19th Century to get railways routed through their communities, in the 21st Century fast Internet connectivity is seen as essential to a region’s development.

But if individuals won’t get connected then it makes the business case for setting these networks up difficult to justify for corporations like Google or Governments like Australia. In future, it will make it harder to get incumbent network operators to replace aging copper infrastructure with modern and faster fibre.

As both projects mature, hopefully we’ll see a greater takeup, in the Australian case greater acceptance should be inevitable as the incumbent Telstra copper network is shut down and subscribers migrated across to NBN infrastructure.

The question does remain though of just how useful homes and businesses see fibre Internet connections to their homes, if they remain unconvinced about the value of a high speed data link then it maybe our communities miss out on the vital communications tool of the 21st Century.

  4 Responses to “Do we really want fibre broadband?”

  1. And locking in customers so when the NBN takes them over, they pick up lots of money in the transaction.

    Isn’t it in the NBN/xx Corp agreement that when the time comes, they cut across ALL their client base to Fibre? So the argument about the take-up rate is a moot one.

    Also directly comparing Australia’s Fibre take-up rate to that of regional US is slightly dishonest because most people do not realise that the US Telecomms/Broadband market is more than slightly different to ours, for many reasons. If the author does not know this he isn’t being honest with himself. If he does know this and is still pursuing the “similar” line of argument he is being dishonest with his Readers.

    What I do find interesting is that prior to Federation all major advances were objected to by the same sections of Society. The Overland Telegraph in the 1870s which cut communications times from London to Melbourne and Sydney from 3 months to 6 hours was built in Australia despite tremendous opposition. Yet it was the same technology that greatly assisted the Federation of Australia.

    Since Federation most major projects that move Australia forward have been initiated by Labor and massively opposed by either the then Conservative or since WWII the Liberal/Country/National Party group.

    The more things change the more they stay the same.

    • Hi Denis, I’m fully aware of the points you make and I’m disappointed you’d accuse me of being dishonest and imply there’s some sort of political agenda behind what I’m writing.

      The point of the post is that people aren’t taking up fibre connection and I try to figure out why.

      I agree with you about the overland telegraph and the historic resistance to infrastructure investment by Australian conservative governments which lasts to this day.

      What I think disappoints me with the NBN debate in this country is how it has become completely politicised and even the mildest of observations that run against the ideologies of the pro or anti camps will get one labelled as being ‘dishonest’ and somehow aligned with one side or the other of politics.

      I’m a big supporter of the National Broadband Network however I think there are valid criticisms of the costings and of the underwhelming performance to date of NBNCo.

      Thanks for the comment, just keep the name calling down in future.

  2. I think the killer app that will get people to take it up will be TV. If the incumbent free to air and pay providers aren’t careful they will end up as relavent as the the record companies after people started to get thier music from the Internet.

  3. Hi Stephen, at this stage there doesn’t appear to be – I suspect Telstra are maximizing their income from the ADSL revenue base.

    I’ll check with Telstra PR and see what they say.

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