Investment in outdated technology continues unabated

The 2019 Budget is almost upon us and unfortunately it appears that yet again our various governments (State, Federal etc) seem to prefer spending large amounts of (our) money on old-world, outdated infrastructure rather than the infrastructure we know we will all need in the future.

I note that another $115m is to be spent on the approach roads to Hobart which will join the $461m to build a new bridge across the Derwent River (at Bridgewater). That is almost $600m on roads and bridges just in Hobart! Now don’t get me wrong I like driving on roads and bridges, but having lived in Sydney for many years, Hobart’s traffic congestion still doesn’t come close to what’s going on over there (although I admit having a plan for the future would be prudent, but it should include the likely effects of technology).

Just for comparison, the cost to upgrade all of Tasmania’s fixed line areas, those currently using NBN’s Fibre-To-The-Node technology, would be about $200m. So take your pick Tasmania: a few minutes less commute time or ultra-fast broadband which would mean that you could probably work from home and avoid the commute in the first place, oh and you’d still have $400m to spare – maybe bolster the Fixed Wireless network with delivering fibre to the towers, as originally envisioned, instead of the limited (but cheaper) microwave backhaul links they currently use.

I get it that pollies, quite prudently, want to invest in technology they know will be useful and not soon get outdated. However I would argue that an investment in roads is riskier than fibre. Looking forward 40 years, are we sure we are going to need these roads, or at least such wide, multi-lane ones? By then there’s a strong likelihood that we will have self driving cars – ones that can drive at 110kph 1 metre behind the vehicle in front. They will be synchronised so that all the traffic moves in an amazing high speed dance through areas where we currently see congestion. We will need no traffic lights, cars will just call ahead to the other cars, then speed up and slow down as they approach intersections so they seamlessly join or cross the traffic flow. Will this happen? I don’t know, but it wouldn’t surprise me. It is certainly a cloud on the horizon for road investment.

Compare that with fibre. There is just no possibility we won’t need this and lots of it over the next 40 years. Every part of our lives is increasingly connected and our demand for data carriage seems to grow completely unabated (anyone see any hint that it is going slow down?). Forget 5G, it will be a great technology, but it will only ever be a “fill-in” where mobility is important, it will never be able to do the heavy lifting that fibre, with its almost unlimited bandwidth capabilities, will provide. Hands up anyone who wants to predict that the internet is just fad and in 10 years time we won’t need it! Investing in fibre is seriously a dead cert.

Tony Abbott said: “Do we really want to invest $50 billion of hard earned taxpayers money in what is essentially a video entertainment system?”. I wonder if this is the problem. A fundamental misunderstanding in what the internet really is. Let’s face facts, typically the most formative years of politicians, in previous business life, were before the internet really existed. For some, those who have been in politics from school, they’ve not been in areas where innovation has been needed . Perhaps, they just don’t get what the internet is about. For them the internet is just about entertainment. How do we change that?

Yes the internet can be used for entertainment and why not? When I last checked governments everywhere invest in stadiums, parks and supporting the arts. Not to mention that roads also get used by people in their leisure time. This is about making our lives more enjoyable, we don’t want to just live to work. However the internet is so much more than entertainment. It is now a key driver to our economy – sadly it’s becoming a bigger key driver in other economies. You try taking almost any business and disconnecting their internet – it isn’t long before staff are sent home. Xero published a very interesting report showing how the arrival of NBN has caused businesses to do more sales and employ more staff – oh and these business no longer have to be in the centre of the city, at the end of a long commute, in order to operate or even do sales.

So yes I get it that everyone is getting excited about 8k TV and many people are saying it won’t work here, but that’s not the only reason we should be rolling out fibre.

Underpinning our mindset with technology ensures our ideas are innovations at a global standard. But if ideas are constantly held back by the limits of technology then we’ll always be playing catch up to other parts of the world who are turning their economies around. In fact, as the pace of other gig-cities picks up our opportunity to be a leader in the new world economy falls further behind.

I get it that pollies love to turn up and cut a ribbon, great for roads, but there is no ribbon for a fibre project – it’s not all in one place – in fact that’s the point. Unlike a road that typically only connects two places (or crosses a river etc), what makes fibre great is that it’s a web of many points to many other points.

Indeed, roads themselves are being reimagined. China is likely to build the first truly smart highway and auto makers are investing heavily to ensure their model lineups stay relevant!

For anyone who clings to the idea that the current government are good economic managers, clearly has not understood the extraordinary damage they’ve done both to the financial viability of the NBN project and worse to our economy as a whole by switching to old copper technology. This damage is just beginning to show now, but there’s lots more to come as we continue losing our place in a connected global economy.

What do we have to do to get governments to plan for the future before the damage is too hard to repair? Does anyone care that Australia could in the not too distant future lose our place as a first world economy.

Damian Ivereigh