Sigh. No. Wireless Networks Aren’t ‘A Threat To The NBN’

There’s a headline in today’s The Australian that subtly perpetuates the myth that wireless networks will supplant the NBN. Aren’t we past that particular bit of FUD yet?

To its credit, the piece looks at the business case for wireless networks and the decreasing costs of wireless networking, based on modelling estimates for the prices that NBN Co expects to be allowed by regulators.

I don’t doubt that there are segments of the population that will take up a purely wireless connection model (excluding those in remote communities served only by wireless NBN) on costs grounds, and that’s the basis of this economic threat forecast. There are problems with that forecast, however, as there’s plenty of research that suggests that an overwhelming majority of Australians are keen to have the upper tier plans, not just the entry level ones. Research firm Telsyte suggests that 85 per cent of Australians want speeds of 50Mbps or higher; those price tiers are no threat to the NBN’s budget forecasts, and that mirrors the current experience where nearly half the current users as of October last year had taken up the top-tier 100Mbps plan option.

There’s also seemingly no consideration taken for the cost recovery of those rolling out 4G networks; it’s not as though telcos are going to be handed the network equipment and spectrum for free, after all. Those are businesses with profit as the solid bottom line, and as such they’re after a return on their investment. Mobile data is already a lot more costly than fixed line data for that very reason, and while prices have dropped in recent years as mobile data uptake has risen, is there some magical fairy dust in the 4G spectrum that means that rate will massively outstrip fixed line realities based on a fixed NBN access price?

I’m having trouble seeing that.

Equally, the price issue is based on a model, not reality, with a grudging admission that

“The NBN Co has modelled several scenarios regarding its price, and the corporate plan is based on a different scenario in which prices fall across time in both real and nominal terms, which would make the NBN Co’s services of a similar value to wireless.”

So it’s a model, and it’s probably not a threat, buried ten paragraphs down. Hmm. Still, that’s only part of my problem with the piece as it stands. There’s the rather obvious and tired way the headline (“Wireless networks rise as threat to NBN“) is constructed, which perpetuates the myth that mobile network speeds will outstrip of fibre.

That’s not just the headline at work, though, with the current top end of 4G LTE being highlighted at 300Mbps (as a theoretical) way before any mention of NBN speeds are talked about. Naturally, the comparison appears unflattering when talking about the 100Mbps that the NBN can deliver right now, but there’s no mention of the top speeds offered by 4G right now, which fall well short of 100Mbps in the real world, where even current 4G LTE providers — who are best served hyping up their 4G LTE investments — quote access speeds in the range of 2-40Mbps.

Once again: Show me something that’ll outstrip the speed of light, and those nice folks at Nobel will be lining up to shower you with awards, and possibly a nice box to hold your time machine in.

This is seriously old and tired ground to be going over, and just to check, I went back into the Giz archives. Yep, I was arguing the same point exactly almost a year ago. There are plenty of grounds to fairly and accurately criticise NBN Co. The rollout hasn’t met the targets, or anything close, and the issues that The Australian raises in regards to anti-competitive advertising of wireless are a genuine concern.

But wireless as a “threat” to the NBN in its entirety? It’s a favourite of Joe Hockey, but I don’t think so.

[The Australian]

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