NBN vs. the world: The American experience

NBN vs. the world: The American experience

Policymakers explain why the U.S. and Australia took different approaches to spreading broadband.

The American Perspective

The NBN would not work in the U.S, said Levin, the former FCC broadband advisor who is now a fellow at the Aspen Institute.

The U.S. has two broadband-capable wires to about 90 percent of homes, Levin said. Australia serves less than a quarter of its population with cable modems, according to 2008 OECD data. “The two-wire strategy for the U.S. had driven upgrades through the private market that Australia was not seeing and so there was less of a need to change strategies.”

“Further, the Australia approach in the US would have been much more expensive as it would have required buying out both cable and telco providers,” he said.

“Government financed broadband networks made available on a wholesale basis to private sector telecom providers and to other governmental entities are highly appropriate in one unique circumstance and that is where the private sector fails to make the necessary broadband investments to serve a community or a larger region,” said former Democratic U.S. Rep. Rick Boucher. Boucher helped write the law that ordered the National Broadband Plan.

In addition to two wires at most homes, the U.S. has four national wireless networks and fixed wireless providers providing service to rural areas, said USTelecom vice president Patrick Brogan. USTelecom is the largest American telco association and counts AT&T and Verizon as members. “Building a national network on top of those existing infrastructures would be wasteful and could strand a great deal of private investment.”

The U.S.’s much larger population would make the cost to serve everyone prohibitive, Brogan said. Australia has estimated the NBN costing $47 billion to serve 22 million Australians. “Imagine the cost to serve 310 million Americans – though not necessarily a linear extrapolation, the cost would be huge,” he said.

“In rural areas of low population density where deployment costs are great because of distance and return on investment will be low because of the limited number of subscribers, government financing for broadband deployment is highly appropriate,” said Boucher, who is now a partner at the Sidley Austin lawfirm. “I can imagine that Australia with most of the country being rural and lightly populated presents an ideal opportunity for the application of this principle.”

“The basic challenges are the same,” Levin said. “How do you get networks everywhere, how do you get everyone on, how do you have a competition framework that drives consumer welfare, how do you use the ecosystem better to drive economic growth and social policy goals, and how do you drive continuing innovation and potentially, technological leadership.”

“The technologies that create the opportunities are largely the same as they involve international development and standards,” he added. “The key inputs are the same—fibre and spectrum—and the government policies that create access to those inputs are similar, such as rights of way policies, access policies, spectrum auction policies.”

“But the history, market structure, and regulatory structure are different enough that again, while the American Plan is useful in some ways, I would be the first to say that as to Australia, our plan was not like, say, the 10 Commandments but more like, as Captain Barbossa said in Pirates of the Caribbean, “more like what you’d call guidelines than actual rules.”

This story is part of a series on how other countries have dealt with their own broadband networks and what Australia could learn from their experiences. Read about the Korean experience here.

Follow Adam Bender on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about AT&TAT&TetworkFCCFederal Communications CommissionOECDTelstra CorporationUniversity of MelbourneUniversity of MelbourneVerizonVerizon

Show Comments