The previous chapter discussed the commercial viability of the NBN at
length, and examined the interrelated issues of the drivers of demand and the
possible economic, productivity and social benefits that will determine the
level of commercial viability.
The committee was reminded by Professor Seneviratne, Director of
National ICT Australia (NICTA) that ‘the NBN is the enabler for
the digital economy.'
The NBN is not in and of itself a useful technology. Rather, its usefulness,
and commercial value depends entirely on the applications that it will support
in the future. In this regard, Professor Joshua Gans submitted that:
Broadband is much more than the wires and equipment. To use
it you need internet services and applications. And it is here that the
Government can fill market gaps and directly increase the value of broadband to
consumers. By doing that, it can help make the case for public investment in
the infrastructure and also reduce the level of investment required as
consumers will be more willing to pay for their own service.
This chapter focuses on the innovation and possibilities that will steer
the NBN towards commercial viability and sets out some of the considerations
that are relevant to the development of applications within the NBN policy
It is not practical in this report to discuss all of the possible
applications that may be enabled by the NBN, nor indeed is it even possible to
contemplate all future innovative possibilities. Accordingly, the committee has
restricted itself to a discussion of a select few applications to indicate the
possibilities of the NBN in a range of areas, and illustrate the issues
Applications determine demand
Mr Keller-Tuberg, Chair of the Regulation and Policy Committee of the
Fibre to the Home Council Asia-Pacific, told the committee that:
In order to understand and comprehend the value of an
investment in advanced broadband infrastructure, regardless of whether it is
fibre to the premise, wireless, DSL or fibre to the node, you really need to
contemplate the applications that run over that infrastructure. Until
applications are implemented and delivered, there is no value in the investment.
The value to society is entirely in the way the network is used.
Chicken and egg scenario
As noted by Mr Keller-Tuberg, the commercial viability of the NBN will
not be based on the physical fibre rolled out to people's homes, but on the
value to consumers of the applications enabled by the fibre. Conversely, it
will be the affordability of the network to a large percentage of Australian consumers
that will in turn drive uptake and hence determine whether it is commercially
viable for developers to create new applications.
There is a 'chicken and egg' scenario in this discussion: it can be
argued that without the development of applications that will utilise high
speed broadband, there is no need for high speed broadband infrastructure. On
the other hand, it can be argued that unless consumers of those applications
have affordable high speed broadband infrastructure available to them, they
cannot use the applications. Consequently application developers have no market,
so why spend resources to develop the applications?
On the affordability issue, Professor Gans agreed that Australia's
existing broadband infrastructure – specifically its low speeds and high costs
– 'ha[s] been responsible for a lack of broadband development and applications
In order to ensure that application development in Australia is not further
hampered by the high costs and low speeds of broadband, which in turn have
limited consumer uptake, both the affordability aspect for the consumer and the
network capacity aspect will need to be addressed to encourage future application
As outlined in chapter five, Mr Henry Ergas and Mr Alex Robson undertook
an assessment of the costs and benefits of the NBN. In terms of the development
of applications, they too found that there is a relationship between the value
the consumer will place on high speed broadband, based on the value of the
services and applications they utilise, and their willingness to subscribe to
those higher speeds:
For any given set of applications, the valuation of speed
will therefore be significantly concave, though the location of the valuation
curve will shift over time, as ‘bandwidth hungry’ applications develop and as a
greater number of consumers attain a utility level from access to broadband
that induces them to obtain the service (i.e. that exceeds the service’s
The NBN proposal clearly addresses the speed issue (at least for 90
per cent of Australians); however, as discussed in the previous chapter, the
committee remains concerned that the cost of retail services under the NBN may
be prohibitive for many Australians. In developing its pricing model, including
the regulation of prices by the ACCC, the government needs to ensure that the
NBN is affordable to the majority of Australians so there is a potential market
and supporting infrastructure that will encourage the development of applications.
Dr Rowan Gilmore, the CEO of the Australian Institute for
Commercialisation (AIC), provided the committee with an example of a technology
that failed to succeed because of a lack of applications:
...ISDN is a good example of a technology that was grossly
underutilised, and its take-up was substantially limited because there were no
applications for it.
Dr Gilmore cautioned against expending significant resources on
infrastructure in order to support applications that do not yet exist:
To have a legacy investment and then retrofit a legacy
investment to an application that does not yet exist and spend billions of
dollars to do that is, in my opinion, a risky investment.
However, Dr Gilmore highlighted that the main purpose of their
submission was not to question the overall NBN investment, but rather:
Our submission was principally to point out the opportunity
that the national broadband network presented for Australian [Research and
Development] and for numerous small Australian suppliers to the
telecommunications market and to express the concern that the opportunity not
Dr Gilmore later expressed concern that many of the applications touted
by proponents of the NBN are already accessible using existing technology, yet
have failed to drive demand for high-speed broadband.
He suggested that the main use of increased bandwidth was likely to be in
entertainment, casting doubt on whether the government should invest such a
significant amount of money into supporting high definition TV, video downloads
The committee considers that, if well managed and appropriately
regulated, a FTTP network may bring benefits to Australia. Discussion follows
highlighting some key examples of applications already under development,
including e-health, e-education, business applications, online government, and
One of the key arguments cited in favour of FTTP is its necessity for
the further development of e-health applications. The image of a doctor
performing surgery remotely on a person in rural Australia is certainly a
powerful argument in favour of the possibilities offered by high-speed broadband.
However, as Professor Gans has argued, this is unlikely to be where the
greatest benefits of high-speed broadband lie:
Instead, it is the day-to-day medical needs of people that
represent the greatest opportunity for improvement.
To illustrate the potential benefits of e-health, Professor Gans walked
through the scenario of a child with an earache:
This requires bundling up your child, usually in the evening,
and then a wait, perhaps up to an hour, for an unscheduled appointment. The GP
will then examine your child's ear, proclaim an infection or not and prescribe
pain killers or antibiotics...
Suppose instead that you took a simple, already available $15
device that connected via USB to your computer and allowed you to take a
high-resolution picture of your child's ear. You then emailed it to the GP, who
would provide the diagnosis or, if there was an issue, call you in to the
surgery...The savings in terms of time would be considerable for many households.
At the Sydney pubic hearing, the National e-Health Transition Authority (NEHTA)
spoke at length about the possible benefits that applications in e-health could
provide, stating that:
...the entire e-health agenda is underpinned by high quality,
high-speed broadband networks.
NEHTA also provided a submission noting that e-health applications will
be used to: make patient health information easily accessible, allowing health
professionals to make informed treatment decisions; enable patients to better
manage their own health through access to information; and allow the Australian
health care sector to function more effectively as an interconnected system,
This would in turn provide potential savings in the health dollar.
The CSIRO also mentioned the use of high-speed broadband in improving
health service delivery, citing applications is telemedicine, diagnostic
services and health data management. The submission notes that;
...the health sector represents almost 10% of the national
economy, and eHealth activities have long held the promise of enhancing
productivity in healthcare delivery.
An example of e-health applications already in place was provided to the
committee by witnesses from the Grampians Rural Health Alliance. As mentioned
in chapter five, the Alliance was established to build a broadband network
across the Grampians region. The network supports Voice over IP (VOIP) telephony
and video conferencing applications to allow high quality clinical conferencing
between medical professionals in the Grampians with those based in Ballarat and
Melbourne hospitals and specialist centres.
The technology also includes a dialysis unit that can be monitored
remotely, so that dialysis patients in rural Victoria do not have to travel
three hours each way to have simple problems diagnosed. Other health services
provided by over the fibre link include palliative care and speech pathology.
The committee was also told about the potential benefits of applications
for Australia's Deaf community. The Australian Federation of Deaf Societies (AFDS)
submitted that the development of next generation Video Relay Services (VRS)
'would significantly support the Social Inclusion policy of the current
However, the committee cautions that the social benefits of applications
such as VRS will not be available without appropriate government support. AFDS
submitted that, currently, VRS is only available to 'the highest paying users
of broadband internet', leaving 'much of the Deaf community without needed
services'. In the
committee's view, the government needs to take positive action to ensure that
necessary services such as VRS are accessible to all who need them, and that ongoing
development of related applications is facilitated in Australia.
Professor Gans warned that high-speed broadband alone would not enable
the development of e-health applications. He argued that the government will
need to ensure that regulations enable the use of these applications, for
example, by extending Medicare benefits to cover remote consultations and
procedures, and ensuring medical liability insurance covered medical
practitioners undertaking these procedures.
Healthcare software developer iSoft also cautioned that
the development and viability of e-health applications will depend on
appropriate government regulation. For example, they noted that the benefits of
an electronic health records management application cannot be realised without
appropriate privacy regulations.
The committee therefore urges the government to be cognisant of the fact
that regulatory reform of other sectors, including the health sector, is
necessary in order to ensure successful uptake of applications that the NBN
will enable. Without these associated reforms, the development of applications
such as e-health will be stifled.
Broadband networks are of dubious value on their own. But the
Government has a real opportunity to reform things under its control and to
allow services to develop as complements to its proposed infrastructure
One of the key potential benefits of a FTTH network is its potential to
deliver high-quality and equitable education programs across Australia. The
committee heard evidence that the rollout of high-speed broadband is critical
to ensuring the quality and international competitiveness of Australia's
The submission provided by Optus stated that:
Australia has over 10,000 schools, but in 2008 less than half
had direct optical fibre connection – limiting the speeds at which they could
access the internet and particularly rich content.
A government initiative has been announced to address this very issue: the
Digital Education Revolution (DER), under which the government has allocated
$100 million to facilitate the further development of affordable, fast
broadband for school education. The DER is highly dependent on the deployment
of the NBN, and in fact its progress has been delayed, as noted on the
Rollout of high speed broadband to schools under the DER has
been delayed pending the outcome of the review of regulatory arrangements and
the NBN implementation study (expected February 2010).
This delay is of great concern to the committee, serving to further
underscore the necessity for the government to expedite the Implementation
Study to ensure that Australia's school students are not disadvantaged. The
committee is also concerned that the 90/10 footprint of FTTP versus wireless
and satellite services will result in maintaining the disparity in the level of
broadband accessibility between rural and urban school students.
Similar problems exist in accessing information and online learning in
the tertiary education sector, particularly outside of metropolitan areas.
Compared to leading international universities, the committee heard that
Australian students have access to far slower and more expensive broadband, with
the consequence that the development of educational applications has been
hindered in Australia.
The committee heard evidence of this from VERNet, a private, not-for-profit
company operated by the nine Victorian universities and the CSIRO. VERNet
explained that 'research and education has extremely high bandwidth
This is because of factors such as these facilities requiring concurrent access
to large datasets, real-time international collaboration and reaching remote
instrumentation. The problem is particularly pronounced in rural campuses,
which do not have access to backhaul.
The committee secretariat saw first-hand evidence of a research facility
that was hampered by a lack of broadband availability. Located within 45 km of
Canberra, the Molonglo Observatory Synthesis Telescope (MOST) is operated by
the School of Physics of the University of Sydney. Until recently, the lack of
basic backhaul infrastructure severely limited the efficiency with which the
staff could download, cleanse and process the massive amounts of data produced
The provision of wireless broadband services by the small
entrepreneurial company, YLess4U, has transformed the way in which the staff
can now process data and share it internationally. The MOST telescope was
recently awarded government funding to prototype technologies relevant to the
next generation radio telescope, the Square Kilometre Array (SKA).
The development of these prototype technologies will be more efficient and
effective through the availability of wireless broadband. In addition, an
upgrade in early 2010 'will enable the direct control of the MOST facility by
This is an example of the 'enabling' factor of high speed broadband.
VERNet contends that the provision of high speed broadband is essential
for research and development institutions, noting that the government only
mentions that the network will connect 'schools'. VERNet believes that this
needs to be extended to ensure research and tertiary institutions are included
in the rollout due to their unique capacity requirements. Ms Barnett, from
VERNet, told the committee that their network required 'scalable capacity' and
...that is why we used dark fibre rather than managed services
... [which] could not meet capacity and demand increases in a cost-effective way.
Ms Barnett continued that VERNet because they had access to dark fibre
that their networks were scalable and could be upgraded as required:
...we have upgraded to 10 [Gbps] and ... the technology we have
chosen currently has product at the 10 [Gbps] and 40 [Gbps].
In particular, deployment of the NBN fibre in more remote, less
commercially viable regions will assist organisations like VERNet to connect
education and research institutions in those more remote areas to their
These issues serve to accentuate that, unless carefully implemented, the
NBN proposal has the potential to worsen existing gaps in the resources
available to metropolitan versus rural educational institutions. The committee
cautions the government to ensure it does not inadvertently widen the 'digital
divide' as the NBN is deployed.
Commenting on an issue closely related to the educational digital
divide, the Fibre to the Home Council Asia Pacific submitted:
There is a tangible threat that ‘applications divides’
(innovative applications being available to some communities but not others)
might emerge if application providers cannot easily ‘go national’ with their
innovative services. Applications divides could similarly emerge if innovative
services are not nationally embraced by government and national applications
providers, to assure critical mass.
The NBN has the potential to provide applications that lower the costs
and improve the productivity of Australian businesses. As Optus submitted:
The ability to access and share complex applications and
databases and to work remotely will allow much lower costs and greater
innovation for business.
Many such applications are currently available, but may become more
widely adopted in a faster speed broadband environment. A simple example is the
videoconferencing application. High-quality video-conferencing has the
potential reduce travel and transport costs of businesses, as well as
associated environmental impacts. The benefits of video-presence in the health
services arena have already been discussed above and in chapter six.
Additionally, if the broadband prices and the regulatory environment are
both favourable, the NBN has the potential to make Australian ICT businesses
innovators in applications development and stimulate entrepreneurial activity.
This potential has already been realised in the Ballarat region, as detailed in
chapter six and also later in this section.
Again, the committee secretariat was able to see first hand several
examples of businesses that have benefited from the provision of high speed
broadband that have enabled the uptake of services and applications. One
example was a teaching medical practice situated in Bungendore, about 45 km
from Canberra, which has been provided with broadband by YLess4U. The company's
Chief Executive Officer explained the setup to the committee at a subsequent
We also equip the local medical teaching practice at
Bungendore with two distinct high speed services – the first for the [benefit
of the] medical practice and the second for the [benefit of the] out-posted
medical undergraduates from the Australian National University who are
undergoing rural field work as part of their undergraduate studies.
The provision of wireless broadband to this medical practice has enabled
the practitioner there to participate in peer-specialist group consultations
via videoconferencing, saving valuable clinical time and reducing the travel the
doctor would otherwise have to undertake. The medical students are able to
access the university network and also participate in weekly meetings with
peers and supervisors still in Canberra.
Another example was that of an organic farmer in the vicinity of Canberra.
Organic farming is very labour-intensive and consequently requires a higher
proportion of workers for each organic crop or herd raised. This gives rise to
potential safety issues due to having a large number of staff dispersed across
the property and no means of contact with them.
Once broadband was provided to the business property, each staff member
was provided with a hand-held device. Constant contact can now be maintained
with the farm base, while staff can also download detailed crop information from
the mainframe and/or record changes to conditions in the field, all in situ..
This subsequently allows full compliance with the very strict standards
regulating the organic farming industry. The farmer is also contemplating the
development of labour-saving applications, such as automated gates for animal
yarding. The provision of broadband has enabled the development of applications
that have resulted in greater diversification for the business owner than would
otherwise have been possible.
There are numerous benefits to making government services and
information available electronically. The Government Online initiative
commenced around 1999, with the Australian Government encouraging all
government agencies to ensure as much of their information, and later their
service delivery, was available online. Online government service delivery in
an area such as social security can significantly improve the effectiveness and
efficiency of service delivery and save time and travel for users of the service.
Development of online services has gradually increased across all agencies and
across the three levels of government over the past decade.
However, there are key issues that need to be addressed before
government would be able to roll-out significant e-government applications. For
example, the Australian Library and Information Association (ALIA) submitted
that, anecdotally, a large portion of those accessing broadband services in
libraries use those services to access and download government information and
services, stating that:
In some rural and regional communities the public library is
the sole resource for access to government services and publications – e.g. the
Centrelink fax machine is housed in the library at Hillston NSW. Government
agencies are sending people to the local public library for government
ALIA noted that many of those using free broadband in community
libraries are economically disadvantaged, and likely cannot afford broadband.
Furthermore, those people are also likely to have difficulty using computers
and internet services because of their lack of access. Accordingly, librarians
are frequently asked to assist people in using the internet to access
government information and services.
If a greater portion of government services and information were only
available online, then the resulting impact on local libraries would need to be
considered, as would the capacity of disadvantaged groups to access the
internet. ALIA suggests that training and support of the library customers is
also necessary if e‑government applications are to succeed. They
For sustainability, such training should be conducted by
organisations such as libraries which are part of the long term community
infrastructure rather than a short term project.
The dependence on public libraries for basic government online services
resurrects the previous suggestion by Professor Gans, detailed in chapter six,
that the government should include in its proposal the free provision of basic
internet connectivity for socially and other disadvantaged sectors of the
Evidence taken form representatives of the City of Whittlesea also
highlighted that the uptake of smart forms was not possible until high speed
broadband was provided throughout the council. However once that occurred
additional smart forms were developed, producing increases efficiencies and
productivity for the council. The initiative is now being applied more broadly
across all 80 council in Victoria.
Smart grid applications have the potential to significantly improve the
efficiency of the energy sector by enabling better monitoring and control of
energy networks. The committee heard evidence from a strong proponent and
advocate of smart grid technology, Mr Robin Eckermann:
The introduction of smart grid technology holds the key to
modernising the electricity industry and providing a framework for
next-generation energy management. The benefits are economical as well as
Smart grids involve the installation of 'a small module of technology at
every distribution transformer...to monitor voltages, current flows and various
other environmental parameters'.
This allows rapid, remote fault recognition and rectification by energy
suppliers and also the ability of suppliers and users to monitor the flow and
use of energy at any point in time. As explained in Mr Eckermann's submission:
An in-home display that shows current usage, costs etc, can
also be provided to give consumers information about the energy they are using,
its costs and its carbon impact.
Accordingly, consumers can adapt their energy usage to make use of
non-peak times, and proactively minimise the use of high-energy intensity
appliances. The management system also allows electricity suppliers and
distributors to optimise the effectiveness of the energy grid. For example they
can detect 'inefficiencies resulting from the way the network was constructed'.
Mr Eckermann outlined for the committee why the NBN is critical to
ensure the benefits of smart grid technology can be optimised:
So right now the electricity industry sits on the threshold
of a radical transformation ... The enabler for this transformation is the
infusion of information and communications technology throughout the grid, from
generation right through to consumption; and it is the pervasive real-time,
grid-wide communications that underpins the possibility of synergies between
smart grids and the National Broadband Network.
In addition, smart grid technology can improve the reliability of energy
supply by accurately identifying any problem, pin-pointing the location of the
fault, and identifying whether or not it has been corrected; this cannot be
performed by existing technology.
The Australian Information Industry Association submitted to the
committee that an investment of $3.2 billion into smart grid technology over five
lower electricity use by 4%
increase the NPV [net present
value] of GDP by $7-16 billion over 10 years, and
create 17,600 jobs.
However, as with other applications, smart grid technology will only be
capable of achieving these benefits if the government provides the right
regulatory and pricing environment. For example, by requiring greenfields
developments to implement smart grid technology, the government could promote
the development of this application.
The committee acknowledges that there are complex issues involved in
gaining productive collaboration between the telecommunications and the energy
utilities sectors. There is consequently a need to ensure there is adequate
consultation within each of the sectors involved, and that this consultation
commences as early as possible to ensure optimal outcomes for government and
consumers. This was emphasised by Mr Eckermann when he stated that;
I think at the earliest opportunity that [the NBN Co] has the
resources to do so, it should engage the utilities collectively and/or
individually... There are a lot of complex issues ...that really need a solid
engagement at an engineering level.
The committee also notes that the utilisation of smart grid technology
is likely to establish costs to consumers in relation to the installation of
in-home equipment, necessitating broad community consultation and awareness
How government can support the development of applications
The committee heard a range of suggestions from people inside the
telecommunications and applications development industries about the measures
government can employ to ensure the development of appropriate and beneficial
applications in Australia. Many of these are noted in the discussion above,
such as the importance of appropriate regulation for e-health, and the funding
of training programs for online government applications. This section expands
on a number of associated key issues that will facilitate the effective
development of broadband applications; these include leadership and
collaboration, regulation, flexibility and consultation.
Leadership and collaboration:
Ballarat ICT case study
The committee heard from members of the Board of Ballarat ICT Ltd about
the state and local government initiatives in Ballarat to develop the Ballarat
ICT Cluster. The development was assisted through a range of initiatives
including networking opportunities, business opportunities, the fostering of
research and development partnerships, and stakeholder negotiation. As a
consequence, Ballarat has become a hub for the ICT sector.
Ms Helen Thompson, a Board Member of Ballarat ICT Limited, explained
that the role their organisation had played was a multi-faceted one, but a
major function had been in facilitating the networking and collaboration to
Ballarat ICT Ltd has an active role in facilitating
everything from networking events to breakfasts on a regular basis every
month...We have forums and roundtables but we also identify project areas each
year. Last year we had two examples. One was the e-health capability study...
There are a range of businesses involved in the Ballarat ICT Cluster:
At one end of the scale, we have a very large multinational
corporation and at the other end of the scale is the 100-plus SMEs [Small and
Medium Enterprises] that work in the ICT sector. That is where the Ballarat ICT
Cluster comes in, recognising the role of those groups of small firms,
understanding where they are at and what might add value to them.
Ballarat ICT Ltd told the committee that the keys to its success have
been 'the collaboration between the City of Ballarat and state, local and
federal government' and 'leadership, doing it ahead of everybody else'.
In addition, the building of a high speed fibre link has been critical
to the ongoing success and continued growth of Ballarat ICT Ltd. Mr Mal
Vallance, Chairman of Ballarat ICT Ltd, said:
If you look at the development of technology, there is a
strong correlation between the infrastructure in place, including really good
optical fibre into the park, and the developments that occurred. The reality is
that to attract investment out of capital cities you have to provide the
committee urges the government to take heed of the Ballarat ICT
Cluster case study, and ensure that not only the appropriate technology, but
also strong leadership and close collaboration between the business sector and
all three tiers of government, are all utilised to encourage innovation in the
Australian ICT sector.
A supportive regulatory environment
Throughout its inquiry, the committee heard much evidence about the
exciting possibilities that the NBN will create in terms of applications. Conversely,
the committee also heard evidence of ways in which the NBN might fail to
achieve its optimal potential if not properly regulated, particularly in
relation to maintaining a competitive environment.
For example, the Fibre to the Home Council Asia Pacific warned:
If the NBN and its [regulatory] competition framework is
optimised to propagate today’s kind of Internet access services, it will surely
underachieve its transformative potential. New applications may not emerge on
an inappropriately conceived NBN either.
The Productivity Commission submitted that it supports the government's
proposal of building a FTTP network on the basis of the Commission's previous
work, which demonstrated a strong link between productivity and investment in
ICT (see discussion in chapter six).
However, the Commission cautioned that:
An equally important message emerging from a variety of
Commission work is that the scope for Australia to reap the benefits
potentially on offer from the NBN and other ICT innovations...will depend
critically on strong competition among users to drive the search for profitable
applications, and on a supportive, flexible and responsive policy and
The Productivity Commission's submission also pointed out the importance
of ensuring that the telecommunications industry is open and competitive for
fostering innovation. The Commission highlighted:
[T]he Commission's Telecommunications Competition Regulation
report found that open access networks, by encouraging downstream competition
and innovation, have major advantages over those that restrict entry.
Importantly, the Commission highlighted that the same is true of
competition between network technologies:
...exclusive arrangements for providing content to particular
network technologies (satellite, cable, mobile or copper based) were unlikely
to deliver the most efficient outcomes.
This point emphasises the committee's concerns with the government's
Telecommunications Legislation Amendment (Competition and Consumer Safeguards)
Bill 2009, which is discussed in chapter seven.
The Productivity Commission's submission also noted:
[P]olicies or regulations that unnecessarily inflate the
costs of using new ICTs, or that limit competition among potential users, will
reduce or at least delay uptake and the associated benefits.
As discussed in chapter six, the committee stresses the importance of
undertaking a cost-benefit analysis, noting that without it the government cannot
formulate policy to assist in maximising the benefits of the network and
minimising its costs. The importance of this was echoed by the Productivity
Commission, which submitted that certain applications, although not
commercially viable, should be supported by government to ensure that the
social benefits of the applications are realised. An example of this, as noted
above, is the technology and applications which assist Australia's Deaf
Similarly, the Fibre to the Home Council Asia Pacific submitted that:
We anticipate that Australia’s applications marketplace will
be vibrant and competitive. Indeed, achieving these characteristics will be
sure signs of the success of its FTTP deployment. In order to ensure this
outcome, it might be necessary that some initial price controls be imposed for
basic services. It might also be necessary that government departments and
enterprises (including but not limited to the public health and education
systems) actively move to establish service delivery via the applications
The committee acknowledges that achieving the right regulatory balance
will be challenging. It will be required to underpin competition, facilitate
applications development that will drive uptake, create affordable access to
high-speed broadband for all Australians, all within a commercially viable NBN
That said, ongoing, meaningful and productive consultation with the
appropriate mix of key stakeholder organisations will be required in order to
ensure that the regulatory environment supports the development of
The committee is concerned, however, that the government is not
cognisant of the appropriate mix of key stakeholders for consultation purposes,
having heard that a number of key stakeholders, including the Productivity
Commission and the CSIRO, have not been directly consulted in the NBN process.
Another key theme raised during the committee's examination of
applications is the need for flexibility in a number of associated areas. For
example, as outlined above, a flexible and dynamic approach to regulation will
be required, particularly as new applications create new and unanticipated
Southern Cross Equities Ltd raised some concerns about the inflexibility
of the government's current NBN policy. Southern Cross Equities Ltd Inc submitted
We believe the NBN is focused on a technology solution when
it should be focused on outcomes (i.e. what services and applications will be
demanded with higher speed broadband access).
This raises the question of whether part of the government's $43 billion
investment in the NBN should be focussed on encouraging the development of
appropriate and socially beneficial applications. For example, the government could
support further development of online initiatives, including smart forms, that
facilitate online completion and submission, as described to the committee by
the City of Whittlesea.
There is also the argument that investment is needed in more that just the
infrastructure and the applications, and that investment funding for human
resources is essential to support uptake by the consumers. As described by
representatives from the Grampians Rural Health Alliance:
We invest in technology but we do not invest in the people. ...
without that ongoing investment in the people and working with the people to
demonstrate the value of broadband and videoconferencing in fact it would not
be anywhere near where we are at. ... It is all very well to have a technology
infrastructure rollout, but unless the people use it and have a reason to use
it and value it, it sits unused.
The benefits of the NBN will not derive from the optical fibre itself,
but the uses to which it is put through applications and services. There are
many varied and exciting possibilities in the applications that may be developed
through, and enabled by, the NBN.
However, the committee concludes that these will only come to fruition
and provide optimal benefits to all Australians if the right policies and
consultation processes are in place. These policies will include: the parallel regulation
of the ICT and other industry sectors to which individual applications relate;
pricing to ensure the NBN remains affordable and hence accessible across all
demographics; government investment in building the right collaborative and
consultative environment in which ICT applications development can flourish; appropriate
resources made available to illustrate the value of broadband applications to
all Australians; as well as a flexible approach to both funding and regulation
of the NBN to ensure that the best applications are developed using the most
The committee strongly advocates that a greater focus be placed on
fostering the development of applications that will drive demand and uptake of
NBN services and consequently underpin the commercial viability of the network.
The development of applications must occur in parallel with the development of
the technology architecture.
More specifically, emphasis for development support must be placed on
those applications that will facilitate economic development and/or
productivity improvements, such as those detailed that can improve health,
education and energy efficiency outcomes across Australia.
That the government provide greater opportunities for commercial
viability of broadband networks by advocating the development of new
applications that will facilitate economic development and improvements in
health, education and energy efficiency outcomes.
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