12 lessons from the weird, unnoticed end of Australia’s bitter broadband war

What if we held an Australian broadband crisis and nobody came? That’s pretty much what happened in Australian broadband policy over the past decade. Governments, forecasters and the media can all learn lessons from this episode.

Illustration: Fibre optic cable in a Telstra pit | Author: Bidgee on Wikimedia | Used under Creative Commons Attribution-Share Alike 2.5 Australia license

Here’s a puzzle. Twelve years ago the National Broadband Network (NBN) stood at the cutting edge of Australian public policy concerns. The Coalition under Tony Abbott and Malcolm Turnbull was preparing to gut the Kevin Rudd/Stephen Conroy plan for a full fibre-to-the-premises broadband network. The Coalition – well, on this issue, mostly Malcolm Turnbull – claimed its more limited broadband network plan would cost less, get built faster, and sacrifice not that much in capability. Over the years after Abbott’s 2013 election, the bulk of us would make do not with superfast broadband but with plain old fast broadband of less than 100 megabits per second.

At the time, many people complained loudly and with apparently genuine passion about the Coalition’s reluctance to complete the NBN. Indeed, they complained bitterly that the NBN’s obvious goodness made any doubts a clear sign of technological and economic ignorance:

• Then NBN CEO Mike Quigley led the way, claiming that fixed line broadband demands (by households, presumably) would reach a full gigabit (1000 megabits) per second by 2020.
• Journalists such as the ABC’s Emma Alberici followed Quigley’s lead.
  • Alberici told readers in 2013 that that healthcare robots and other telehealth advances such as high-definition videoconferencing, together with other demands such as education and computer gaming, were forecast to create just such demand.
  • Alberici also archly doubted Malcolm Turnbull’s claim that Australians were unlikely to need gigabit speeds anytime soon, concluding one article: “That’s what they said about the World Wide Web”.
  • That same year, a young and passionate ABC journalist named Nick Ross wrote a 10,000-word article for the ABC attacking Abbott’s plan to rework and downgrade the original NBN; Ross claimed, for instance, that a fully fibre network’s telehealth opportunities were “so dramatic that the savings to the vast $120bn (and rising) annual health budget will pay for the entire rollout on their own, while simultaneously revolutionising healthcare for all Australians”.
• Media commentators made invidious comparisons between broadband speeds in Australia and in countries like Romania.
• Even esteemed Club Troppo commenters started repeating such claims.
• When in 2014 an inquiry (chaired by former Victorian Treasury head Mike Vertigan) argued that the Coalition’s truncated NBN would not create a disaster, that decision was pilloried by various commentators, including academics at places like Sydney University.

And where are we now on this controversy, a decade or so on? Weirdly, pretty much none of the impassioned complainers seem to care about it any more. Our average fixed-line broadband speed ranks us just 75th out of 155 countries on the Speedtest Global Index. Most of us still have less than 100 megabits per second of fixed-line connectivity; the national fixed-line average is around 78mbps. Yet the last “Australia’s internet speeds lag” stories seem to have appeared in 2017. 

Pretty much nobody says that video downloading is a big problem in Australia. Pretty much nobody claims the shape of the NBN crippled Australia’s economic development or its tech sector or anything else. Pretty much nobody cares that our three-year-old Albanese Labor government has played it pretty quiet about the state of the NBN, rather than declaring it must spend up on fixing the Coalition’s mess. Pretty much no-one in the media writes impassioned “Fix The NBN!” screeds. It is nearly impossible to find any economist or business thinker who worries that Australia’s broadband speeds are holding it back. Many of the media chroniclers of impending doom have moved on to other fields. Network traffic continues to be dominated by video entertainment, as it has been since the 1990s. High-definition video remains the Internet’s greatest bandwidth hog, but complaints of choppy video are rare. Even amongst broadband network measurement firms like Ookla and infrastructure providers like Akamai, attention has moved to mobile speeds and cybersecurity threats.

Why has all this Not Caring come about? How did the Coalition’s watered-down NBN get most of us what we needed?

Mostly because fast broadband turned out to be enough broadband for most users. Almost none of the cited benefits of superfast broadband has come to pass. 

Six lessons about technology’s benefits

This experience can teach us at least six useful lessons about how we make technology work for our society:

• The first lesson is that projecting from technology improvement to productivity improvement is tough, because it takes more than a single technological improvement to change society. Productivity in most western countries in the age of superfast broadband has not exploded; in fact, it has slowed to a walk – and pretty much no-one thinks poor connectivity is the culprit.
• Second, technology can shrink bandwidth needs as well as expand them. Even 4K video can now be compressed into 25 megabits per second or less.
• Third, the micro-level specific benefits claimed for superfast broadband in areas such as education, health and power management were mostly overstated. For instance, COVID showed that telehealth, contrary to the pronouncements of some would-be visionaries, is mostly determined by the will and mindset of the health providers and the technology comfort level of doctors and patients. And far from needing superfast broadband, telehealth can often be done with just a voice connection.
• Fourth, many of the supposed benefits of superfast broadband were in fact realised with the broadband we already had in 2012. Personal communication continues to be dominated by low-bandwidth phone calls and SMS and social media. For many people, the most obvious result of a return to 2011 connectivity levels would be that their TVs might struggle with 4K streaming.
• Fifth, superfast broadband (that is, broadband above 100Mbps) has not, so far, been the solution to any of our our toughest problems, those intractable ones with complex social roots. For example, health IT experts still battle away trying to get the industry to digitise its existing workflows. I have a My Health Record, but several years of encouraging doctors to use it has resulted in … a few databased documents. 
• Sixth – and perhaps most importantly – this episode confirms once again William Gibson’s old lesson that we can often discern society’s future by looking carefully at its present. “We can’t begin to imagine what people could do with upload speeds on an industrial scale,” a News Ltd journalist quoted Sydney Uni academic Kai Riemer as saying. But this sentiment, common at the time, was also misguided. In 2012, high-speed broadband had already been in place for the better part of a decade in places like Seoul and Tokyo. Australia, like most other developed countries, already had its own high-speed broadband between CBDs, many inner-city areas, and the universities. These examples all demonstrated quite practically the shape of the future, and they disproved the common notion that we could not even imagine that future. Already at that time the incremental benefits of extra bandwidth for technologies like videoconferencing could be seen in communications between different parts of Seoul and Tokyo, and between the Australian capital-city offices of major businesses and professional services firms – and those benefits were … well, thin.

What about costs?

Club Troppo colleague Antonios Sarhanis, a tech company CEO, wisely asks (in the comments below) whether the higher maintenance costs of the Coalition’s multi-technology option ended up making it as costly as the NBN. Perhaps it did. Some critics certainly claim so. And it obviously adds costs to a project when you change technologies half-way through. But it’s hard even now to show to a moral certainty that either option ultimately cost less than the other. Any view would depend on at least two unknowables: the ultimate build cost of the original NBN; and the maintenance cost difference between that unbuilt NBN and the lower-speed mixed-technology network that was ultimately built. I recall the Vertigan Report as suggesting the mixed-technology network could be expected to be cheaper, and I think Vertigan’s examination is the best starting point. But we’ll never know for sure how things would have turned out if the nation had stuck to the original NBN plan.

Partly for this reason, this post has concentrated on claims about the benefits of superfast broadband. The evidence on benefits is much clearer than the evidence on costs: we can look around the world and see whether superfast broadband looks like it has ultimately made much of a difference to outcomes anywhere. And as far as I can see, it hasn’t, any more than it had in Japan or South Korea in 2010 or 2013. At the very least, the most commonly-cited benefit back in the day – “gains from telehealth” – doesn’t seem to have proved out. (As usual, use the comments to tell me why I’m wrong about this.)

Six meta-lessons about infrastructure governance

The first potential lesson from Australia’s now-defunct broadband crisis is the obvious one, which bears repeating: governments should not try to provide, without good reason, an inflated level of infrastructure just because they vaguely feel that many people might use if they got it.

But we can find other, less obvious lessons too.

A second potential meta-lesson of the NBN saga is this: don’t give in to the temptation to always perform straight-line projections of costly technologies. That was an error that superfast broadband enthusiasts gave in to, all the way up to founding NBN CEO Mike Quigley. In 1999 many of us had slow broadband, and in 2012 we mostly had faster broadband, and so many enthusiasts concluded that in 2025 we would need superfast broadband. Below right is a slide that Quigley showed around in 2010. It’s apparently the one which fuelled the technological overconfidence of many journalists. It depicts an endless explosion of bandwidth demand:

In 2010, Quigley told at least one of his his audiences that “the trend has been inexorably upwards … We need to build this infrastructure today for when we need it.” He also joked that “if you think (the fibre-to-the-premises NBN is) a waste of money, that we don’t need it, you’re betting on the orange curve”.

Yet when the results eventually came in, the orange curve turned out to be closer to the truth than the green pair of lines – at least for the average user. Quigley’s error was that for the average (as opposed to cutting-edge) user, the most important characteristic of the Internet was not blazing speed but ubiquitous, low-latency connections, which had largely already appeared by 2012. Just as the mach-2 Concorde turned out to have more speed than the bulk of the air travel market required, so immediate superfast broadband turned out to be more speed than the bulk of the Internet market required.

A third meta-lesson might be to look out for incremental upgrades that can get the job done. 2012’s superfast broadband fans wanted the fastest possible transformation of our entire national internet infrastructure; in the process, they overestimated the demand for that infrastructure in many places. They were also reluctant to point out to less technologically informed Australians that Australia’s Internet infrastructure is not monolithic, or that the Internet is by its very nature incrementally upgradeable. Indeed, over time we will get to ubiquitous superfast broadband; even as I write, NBN Co continues incrementally upgrading networks, as it should.

A fourth meta-lesson, closely related to the third, is that governments should probably think twice before demanding that service be uniform across the nation. Governments need to consider where infrastructure will find its best uses. In 2025 as in 2012, superfast broadband is needed in some places; it is not needed everywhere.

A fifth meta-lesson, which I under-rated when decisions were actually being made, was that governments are made up of people – and people often form their views for largely emotional reasons. I had the opportunity to talk to a couple of senior ALP figures before the NBN was legislated, and they put great weight on three political and (for them) emotional facts:

• Telstra, the company which at that time completely dominated Australian telecommunications, had frustrated all of Labor’s frequently sensible telecommunications reform proposals, over a number of years, through unceasing public and private lobbying. This, unsurprisingly, pissed them right off.
• A successful NBN would ultimately undermine the recently-privatised Telstra’s enormous political power.
• Telstra was politically unpopular, and particularly so under loud American CEO Sol Trujillo, so that Labor expected a plan that Telstra opposed could still win votes. And indeed, it probably did.

The lesson here is that, while I understand the temptation, governments should not always leap at the first idea they come across that will win them an election and/or discomfit their enemies. 

And a sixth meta-lesson is that governments really should do the difficult and high-stakes work of finding and put in place the systems that will give citizens access to the specific infrastructure they need, and that will react well to uncertainties and changed circumstances. This is what Labor needed to do circa 2007, and didn’t. Embedding the right systems in turn means finding those systems, ascertaining that they work, and turning them into institutions. All that means deliberately sacrificing opportunities to win elections or discomfit enemies – which in turn means that parties will generally move to create good institutions for infrastructure only reluctantly. We need to do more to encourage them.

Footnote: If you think this all sounds like a smart-arse being wise after the event … well, you could be right. But the archives of Club Troppo go back right through its 162 years of publication*, so you can judge for yourself.
* Yes, I made that bit up. But click the link anyway.

Update 2/1/2024: Now with extra lessons! And the NBN graph of neverending Internet explosiveness!

Comments: As usual, yes, I’m an idiot about a lot of things. I really will be grateful if you can point out in the comments specifically where my idiocy lies, and detail the huge mistake(s) I’m making.

About the author: David Walker is the principal of Shorewalker DMS, an editorial advisory firm. Shorewalker DMS specialises in helping organisations make their reports clearer , more complete and more persuasive. See our work, check out our podcasts, and hire us:  https://shorewalker.net.

Twitter: @shorewalker1

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