Australia’s great media debate over the National Broadband Network appears to be still in ‘first gear’. Behind closed doors, we all hope that different solutions are being measured against appropriate cost/benefit analysis. In the media, we need to progress forward from a discussion of whether a $43B optic cable network delivering 100MPS speeds is better than an $7B mix of technologies delivering 12MPS. Of-course it is… its self-evident! But that is not the judgement required for Australia to make a wise investment. Here are some dimensions that I hope economist and technicians must be considering:· Where is the Sweet Spot? Arguably, economic yield for speed offers diminishing returns. For example, economic yields from a 100MPS network are not twice those from a 50MPS network. Accordingly, the costs of a 100MPS network are not twice the costs of a 50MPS network. In the short-term, where is the sweet-spot for coupling speed, cost and economic yield?
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Do Today’s Applications Need 100MPS? After we have invested in building the infrastructure for high-speed communication, will we have enough resources to build the applications? What are the time-lines for building the most valuable applications? (The remote medical analysis-diagnosis-treatment requires a unified customer number… an initiative that both political parties have shelved, at different times, because of community privacy concerns. Is the community now ready to compromise on their privacy concerns as part of a NBN initiative?) Clarity in decision making would be assisted by listing the applications that will add the most value and determining the minimum line-speed needed to deliver that value.
Do Today’s Applications Need 100MPS? After we have invested in building the infrastructure for high-speed communication, will we have enough resources to build the applications? What are the time-lines for building the most valuable applications? (The remote medical analysis-diagnosis-treatment requires a unified customer number… an initiative that both political parties have shelved, at different times, because of community privacy concerns. Is the community now ready to compromise on their privacy concerns as part of a NBN initiative?) Clarity in decision making would be assisted by listing the applications that will add the most value and determining the minimum line-speed needed to deliver that value.· Can we find a Migration Path? Is there a migration path that will allow Australia to build the ‘Rolls Royce’ infrastructure over time without material waste? For example, how much duplication and waste is involved in initially building a network with a material wireless network component... and gradually over time reducing the wireless component. Arguably, today, we do not have existing applications that must have networks running at speeds of 100MPS. Arguably, we do not need 100MPS speeds to deliver today’s entertainment applications (video on demand works in a satisfactory manner at much lesser speeds), education, business or medical applications. Arguably, the community would be satisfied for infrastructure speeds of say 20MPS for the next 3-4 years, followed by 50MPS until the end of the decade and then supplanted by the very best solution available at that time. Would Australia would be much better served if we had flexibility to change the timing of improvements to react to changes in technology, competition and community wealth.
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What about the Alternatives? Australia’s timing of its investment in communication infrastructure needs to take account of investment yields expected in other parts of the economy. Infrastructure investments in other segments of the economy may deliver short-term yields materially better than those available from communication. Is it sensible to crash through with communication infrastructure when major investments in energy infrastructure, education, environmental sustainability, etc may deliver greater short-term reward and enable us to afford big investments in communications infrastructure?
What about the Alternatives? Australia’s timing of its investment in communication infrastructure needs to take account of investment yields expected in other parts of the economy. Infrastructure investments in other segments of the economy may deliver short-term yields materially better than those available from communication. Is it sensible to crash through with communication infrastructure when major investments in energy infrastructure, education, environmental sustainability, etc may deliver greater short-term reward and enable us to afford big investments in communications infrastructure? 
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