Today on Radio New Zealand National I talked about why the two main parties are falling over each other to offer to buy us all decent broadband. Read on for my notes and links or listen to the podcast.
Q: First of all – what do we mean by broadband?
A: Not a straightforward definition I’m afraid – it’s like asking “how much money is enough?” – you will get a different answer form just about everyone. But really what we mean by a home broadband connection is one which is faster than dial-up, that’s on all the time you have your computer on, and that doesn’t interfere with your phone line.
Q: How does broadband work?
A: There are lots of technologies, but easily the most common one is called DSL – digital subscriber line – which is a way of layering a broadband connection onto the same pair of copper wires that carries your telephone calls. And DSL is what techies types like me call a kludge – it’s a way of forcing something to do a thing it wasn’t designed for. In this case, by using DSL, we are forcing a pair of copper wires, deigned to deliver a voice grade analogue circuit to your house, into carrying quite a bit of digital data while still brining a voice grade analogue circuit to your house.
Q: Remind me about analogue and digital again?
A: Digital is when something is on or off. Black or white. One or Zero. Unambiguous. Computers deal with digital information, streams of ones and zeros. The Internet is a network that ships digital information around the word. Analogue, by contrast, is smoothly varying, shades of grey, could be any number not just one of zero. Our voices travel through the air as analogue vibrations, and that’s how the microphones pick them up and how the radio transmitter sends them out. Analogue is the world we inhabit, what we hear and see. Digital is the world of computers and the Internet. You can convert between the two.
Anyway, a DSL line, which is what most home broadband users have, is a way to pack a lot of digital data onto a voice circuit while still keeping it useful as a phone line.
Q: How does it do that?
A: Well, there’s some clever technology as you’d imagine! The copper wire pair is well good enough to send a voice signal to your home, unless you are absolutely miles from the exchange, that is. Voice circuits use only the frequencies up to a few kilohertz, so DSL uses frequencies that are higher. It packs all this digital data by modulating a lot of higher frequencies on the wire – sounds that are too high for us to hear. Dogs might be able to hear them perhaps, except we generally put a filter in when a DSL modem is installed to make sure that these high frequencies never get to people’s phones. And the data is modulated onto these tones using a mix of amplitude and frequency modulation techniques, a bit like radio transmitters use. The result is that, over short runs, the most odern versions of DSL technology are getting up towards 50Mbps, and most suburban lines can manage several megabits.
Q: You said that was the most common technology – are there alternatives?
A: Yes. There’s cable Internet available to houses with TV cables supplied by TelstraClear. That uses a different technology running on a dedicated piece of cable. But only some households in New Zealand have access to that. And there’s several different wireless technologies out there- Woosh Wireless and Wired Country are perhaps the most well-know operators of these. And not to forget the Pacific.Net in Nelson region who also provide domestic Internet service using wireless.
But all these services pale into insignificance compared with the ultimate – optic fibre.
Q: That’s what the parties are promising to roll out. What more do you get from fibre that you don’t get from other broadband?
A: Fibre is awesomely faster than copper. It’s tailor made for squirting a huge amount of digital data down.
Q: So it’s just like DSL but faster?
A: Yes, that’s really all it is – but it’s so very much faster than copper or wireless that it’s a complete game changer.
Q: How much faster?
A: Three orders of magnitude at least. Perhaps five or six orders if you push it – that means anything from thousands of times faster to millions of times faster. You are comparing a tortoise, not to a hare but to a Concorde. And when we are talking increased speed, we mean that in any given period of time – a second, say – you can move a lot more information through the fibre than through a wire.
Q: Why does that matter?
A: Because it makes the scarcity go away. We’ve always behaved as though it costs money to push bits through wires. Telcos have encouraged that by charging us for each bit we move through our Internet connections. Now, the big news is: it doesn’t cost money to push bits through wires or fibres. It costs money to lay those wires and fibres, and it costs no more to lay fibre than wire.
Q: But the companies who lay this fibre need to make a return.
A: Of course they do! But you’d have to say the return on the copper to all our houses was made years ago. It was built with public money of course, back in the old Post Office days, and until the announcements about ‘cabinetisation’ that Telecom made last year it’s been substantially unimproved since then. Internally in Telecom they describe the copper wire as a ‘sweated asset’ – meaning they have got value and more from it and it’s time for a replacement. That’s where the various ideas for a fibre fund come in.
Now, this isn’t just the usual suspects saying that we need fibre to the home. The New Zealand Institute, which is an economic think tank, is running a whole series of articles saying that New Zealand needs fibre to the home on economic grounds, and that there’s a case for public investment to
Q: Is that what the National Party are promising to spend one and half billion on?
A: Yes, and there are about one and a half million households in New Zealand – so that number amounts to about one thousand dollars per household. The telcos will tell you that there’s no return on that money, but in places where it’s been done overseas they have found that there is a return.
Q: How does that work? Do we all have to pay more?
A: Imagine how much most of us pay for our phone rental, our broadband and our cable TV or Sky TV, all lumped together – that’s a reasonable penny and most of it goes on feeding what are close to monopoly suppliers. If we put that kind of money into a fibre connection to our homes we could get a fantastically faster connection and have all those services delivered across it as part of the benefits.
Q: Don’t you wind up with just another monopoly – the fibre owner – which can charge what it likes?
A: That’s what the government said about National’s $1.5 billion plan. And it would be very bad in the long run just to throw public money at a monopoly, or something that could become a monopoly. To be fair to the Nats, they said that wasn’t what was intended, and we haven’t seen exactly how they would apply these public funds to prevent that. We know the government is likely to announce something in the budget next week, and having gone to all the effort of forcing Telecom to give up a lot of its monopolistic practices, they are hardly likely to throw money at it directly.
But this is quite a hard public policy problem. About 6-7 years ago the government ran a project called Probe which got broadband into schools and communities. It threw some public money in and went to some considerable lengths to be neutral about which companies wound up getting the tenders to supply the broadband. It’s fashionable to bash Probe in the press, like most government initiatives, but it did actually deliver everything it said it would – broadband to all schools – and it did so within the money it was allocated.
Spending public money on getting broadband out there is going to involve running a bigger version of Probe again, and whatever happens you can be sure that it will attract its share of detractors – from people who miss out on tenders, from political enemies, and just from plain luddites. But it’s really important for New Zealand that something be done. So, when this project does get going and the criticism does start flying, just lets all keep a clear head and ask ourselves whether people are doing a reasonable job and whether the criticism is justified.
Q: New Zealand’s isn’t the only government making this an election issue.
A: No, the Australian Labor Party made this an election issue over there, and won handsomely of course. And we are beginning to see similar comments being in the USA in the run up to their election.
Q: What benefits will we see from fibre?
A: As I said, you can do all your information needs down a single fibre – TV and the works. But the real point is – just imagine back to the early days of broadband. What new stuff does broadband do for me, people said? But with more a more people having broadband, better and better services become available. Youtube and live radio streaming are impossible with broadband. [Oops: of course, I wrote the opposite of what I meant there. The sharp- eyes of Peter Lynch picked it up] Online banking and air ticket purchase probably wouldn’t be happening if most people didn’t have broadband, neither would Trademe. They wouldn’t even have been thought of. So how much new stuff will we get that nobody’s thought of yet when we all have something much faster?
As always, you can discuss this broadcast at it.gen.nz.
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