Australia commits $43b to network that will be redundant before it’s finished

The Australian Government has committed AU$43 billion (US$30.4 billion) to rolling out a national broadband network (NBN) that will be redundant before it’s finished in 2018.

The NBN will be rolled out by the Australian Government directly, after it decided that private companies who had applied for the work weren’t up to scratch. The network itself was a policy promise made by the Australian Government in 2007, and was due to start originally in 2008.

The NBN rollout will now start in 2010, and take 8 years to complete. The fiber to the home network will provide “up to” 100mbps internet access to 90% of Australian homes. The remaining 10% will get lower access speeds through other technology including wireless and satellite. The network will be managed by a new company, The National Broadband Network Corporation, and will eventually take private investment, although the Government will maintain a minimum 51% controlling stake.

The problem with this huge investment is that the network will be redundant before it is completed. Australia’s largest telco Telstra is already rolling out a 100mbps network in capital cities, beginning with Melbourne this year. Technology in use in Japan offers 160mbps internet access over existing cable networks (details here); Telstra does have the largest cable network in Australia, although there are competing systems in large cities. Notably the cost of rolling out this technology isn’t excessive; in Japan, it has been rolled out at the cost of US$20 per connection.

But those are before we get to the holy grail: telephone lines. 100mbps over copper with DSL is already a possibility. 500mbps VDSL2 over copper (that is, the telephone connection into a home) is already being tested (details here)

By 2011, most Australian’s will already have access to a 100mbps connection via a variety of technologies, while the Government will only be one year into the NBN rollout.

Imagine the competing technlogies and services on offer by 2018? South Korea is rolling out 1gbps over 3 years today; with some advances in technology, 1gbps or even faster may be the norm in Australia when the NBN finally finishes its 100mbps rollout 9 years from now.