Only Gamers & Geeks

revenge-of-the-nerdsOver the past week I’ve seen a rise in the use of the old “geeks & gamers” argument for not investing in a National Broadband Network. It’s one of those tired platitudes first put forward by Abbott many years ago, & somehow it has been given a fresh breath of life by conservatives Australia over.

The argument is simple: Why should taxpayers pay for a network that only gamers & geeks will see benefit?

The key to this argument is that it can be used on those with little knowledge of technology, it’s an argument that exploits people’s apathy toward things they don’t understand. Not only that, it exploits the old “Revenge of the Nerds” imagery to denigrate a massive infrastructure project. Unfortunately it has seemingly become the default fall-back position for those opposed to the NBN.

The problem with this argument is that it skirts the truth: gamers & geeks subsidise internet access for others. As we’re seeing, the top 20% or so of users are paying for the network, essentially subsidising cheaper plans. The reality is, the taxpayer isn’t paying anything for the NBN, no matter who’s implementing it, geeks & gamers are!

This argument is used to support the position that the private sector will build a network if you let them. Looking at the past decade of Telstra being privatised, little to no development of the network has happened, & any that has happened was paid for (at least in part) by taxpayers.

As some people are well aware, since privatisation Telstra had approached the Howard government no less than three times to deploy a nationwide network. At one stage it was almost identical to the current plan with FTTP being suggested for greenfields (Once called Telstra Velocity, now Telstra Smart Community, the pilot sites are still live) & FTTN for brownfields. This was to cost the government $3b, yet was rejected by the Howard government, specifically Senator Coonan, deeming the plan as not needed & too expensive.

One key feature of the plan was Telstra’s desire to be exempt from telecommunications legislation when deploying FTTN, something we should all be keeping an eye on over the coming months. Telstra essentially wanted exemption from many of the protections for consumers, this was Sol Trujillo’s doing. If you don’t know anything about Sol, he presided over the most inactive time for both network deployments & share price rallies Telstra has seen. Sol made Ziggy look like an intelligent man.

I digress, the key here is that the Liberal party had ample opportunity to spend a pittance for FTTN, yet passed it over for years. Now the network is degraded beyond belief, they want to use it. This kind of irrational behaviour is exactly why an FTTP NBN is vital.

One thing to note is that the NBN technically doesn’t have any brownfields sites. Brownfields requires the ownership of the copper network. The ONLY way to create brownfields sites is to purchase Telstra’s network, which you can bet will not be as cheap as deploying FTTP, especially in light of current comments.

Seeing as none of these costs are on the plan, we can only assume that anything from another $10b to $20b will be required to purchase the copper. Whether by debt or by taxpayer funds, purchasing an outdated network for so much would be tantamount to securities due to the new board members having severe conflicts of interest with Telstra, & the obviously bogus information Ziggy has supplied to Senate Estimates.

Takeup Rates

As we can see, 26% take-up rate of 100Mbps & 54% of 24-100Mbps leaves the “geeks & gamer” argument in the dust. (Source: NBN Co Corporate Plan 2013-2016)

Essentially with an FTTP NBN the highest speed services will be subsidising the slowest services. In an FTTN world the opposite is true: services at the end of a long loop subsidise those on a short loop that receive higher speeds. While NBN Co may bring in a two tiered system for FTTN similar to BT’s services in the UK, there will still be users whose speeds are far below that of others, yet still paying the same price.

The bigger con is that 35% of users will not even receive FTTN: they will be left to languish on HFC, if they can get it, or ADSL2. There has been no word of any regulated pricing for Telstra & Optus’ HFC network, so we can assume prices will be anything from $60 p/m (50GB) to $130 p/m (500GB). Not exactly competitive, mainly because Telstra have no competition really. One thing to note is that Telstra have removed their cable plans from the site, & Optus are already scheduled to shut down their HFC network.

So we come back to the fallacy that is being repeated ad nauseum over the last week: geeks & gamers are being subsidised by taxpayers. We can see this is false, even if we look at the simple fact taxpayers aren’t paying a cent for either NBN policy, let alone FTTP.

The key is, to move forward in a digital economy we should be ignoring the opinions of tehnophobes, Luddites, & people who “just use the internet to check email”. They are the ones being subsidised.

Listen to the people who will drive our economy, utilise these services, & subsidise cheaper services: the geeks & gamers.

EDIT: I failed to mention that the computer gaming market is worth $1.45b annually, not exactly something to dismiss.

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  • scott

    For a direct analogy, it’s funny how nobody complains about the billions spent on roads that most people will never drive on. Why don’t we hear about how all our tax payers money is going into roads just for the hoons and revheads?

    The internet infrastructure should be seen in exactly the same way as road infrastructure. Internet infra is still stuck on the “why should I pay for what you want” argument because it hasn’t been around as long as roads have been. I’m sure the same arguments were made about building the federal highway network at first, but now everyone just accepts the need for them.

    My question though is how long do we have to wait before the NBN reaches the same level of acceptance.