The content on this page and other DCITA document archive pages is provided to assist research and may contain references to activities or policies that have no current application. See the full archive disclaimer.
Networking Australia's Future - Appendix A
This report presents the Broadband Services Expert Group's views on the widespread delivery of new communications services to homes, businesses and schools in Australia.
Inevitably, the way the report is structured reflects the Group's experience in the past year, rather than following the terms of reference sequentially. Nevertheless, the year's work has been organised around the elements of the terms of reference, and this appendix summarises the Group's views on each of them.
The inquiry will examine the technical, economic and commercial preconditions for the widespread delivery of broadband services to homes, businesses and schools in Australia, having regard to matters such as:
1. Current and likely future broadband services and the customer demand for these services
Although current broadband discussions are dominated by pay television developments, the Group believes that a much more diverse range of services delivering substantial benefits to the nation will be available in the future. The following is an indicative list reproduced from the interim report. This list, however, represents only some of the services that may become available over time.
POSSIBLE FUTURE BROADBAND SERVICES
Government Health . electronic form lodgment . X-ray and CAT scan transfer . document and data transfer . video consultation . video conferencing . medical records transfer and database . public access to government information . remote monitoring of out-patients . electronic voting and public consultation . video librariesCommunity information . electronic newspapers and reference
Education material . remote interactive teaching . public information services . access to local and overseas libraries . community bulletin boards . international classrooms . service directories and classified advertising
Business . electronic museums and libraries . video conferencing (including 'virtual meetings')
Services to the home . electronic commerce . video-on-demand . remote interactive training . home shopping and banking . multimedia communications . interactive multimedia (including . computer-aided design and manufacturing video games) . linking of high-performance computers. . on-line information services . distributed offices . video mail and video phones . security services and utility meter reading . working from home via computer networks
Predicting demand for new broadband communications services is extremely difficult. Further, seeking consumers' views about services that by and large do not yet exist (and with which the consumers are completely unfamiliar) is unlikely to produce meaningful results. To overcome this difficulty, the Group commissioned a study to examine potential demand for broadband services across a range of sectors: education, health, residential services, business, government, construction and engineering, manufacturing and telecommuting. (Appendix F lists all consultancies commissioned; the Expert Group will publish the consultancy reports shortly.)
A key finding of the demand study was that within the next 10 years a number of services will enjoy reasonably high levels of take-up over broadband networks, including pay television, interactive television, video-on-demand, home shopping, electronic gambling, video conferencing (for training, education, medical consultation, business meetings, and so on), high-speed file transfer (for electronic commerce, CAD conferencing), remote monitoring and security, and government service delivery. A range of other services will be available but will not find wide acceptance within this time because existing services will continue to be used, because they will require significant skill changes or changes to organisational structures or work practices that will not occur quickly, or because network infrastructure capabilities and the cost of customer equipment will continue to constrain their adoption. Fully interactive telecommuting, video mail and home medical services fall into this category.
While not necessarily endorsing the views expressed in the demand studies, the Group commends the studies to people interested in the question of demand for new communications services.
The Group believes that demand for services will evolve as the range of affordable, accessible services increases and as the benefits of the services become more widely recognised. But, in view of the considerable uncertainty still surrounding the likely progress of demand in the next few years, the Group recognises that network providers will develop their network capabilities in a staged manner. This will help to minimise the chances of massive infrastructure investments being wasted because consumer demand fails to evolve as predicted.
2. The relative costs/benefits of delivery by optic fibre compared to other means, drawing on local and overseas experience
In the interim report the Group concluded that it was unlikely that all-fibre systems will be viable for the delivery of residential services for at least another 10 years. Instead, a range of delivery technologies will be available, each with an advantage in particular conditions - satellite, hybrid optical fibre coaxial cable, MDS (microwave), and video delivery over telephone lines (ADSL).
The Group stands by that conclusion. It notes, however, that particular delivery costs will continue to change rapidly, and not always predictably. In these circumstances, the relative costs and benefits of using optical fibre as opposed to other means should be kept under close review.
3. The extent to which broadband services may be delivered by technologies other than optical fibre or through a staged evolution of technologies
As noted, the Group believes that a range of technologies will be used to deliver broadband services, depending on the circumstances. A staged development approach, moving from narrowband to broadband networks, would be consistent with maximising investment efficiency, and would allow content, services, and the links between network operators, content creators, service providers and users to be developed concurrently.
4. The industry development and export opportunities including the potential for increased employment
There are very significant industry development, export and employment opportunities both for the production of communications network equipment and for providers of services and the content for interactive services. Chapter 5 presents the Group's views on this subject.
Although it is not practical to quantify these opportunities, because they will be dispersed across many sectors and because changes are occurring rapidly, Cutler and Company suggested the following targets for the multimedia industry:
- a $200 to $300 million professional services industry in two to three years;
- output of over $750 million in CD-ROM publishing in three to four years and at least another $250 in global royalty streams;
- increasing the number of graduating directors and audiovisual technical personnel tenfold, to 3000 a year.
The Australian Telecommunications Industry Association has predicted exports of telecommunications equipment will reach $1 billion by 1996, with broadband products and systems being a significant and growing proportion of this.
Employment in the telecommunications equipment industry currently totals 12 000. Despite increasing production, employment is relatively constant because of productivity increases: the industry's real value added per employee has increased by 40 per cent in the last six years. Although total employee numbers are not expected to increase, there is a shift in employment toward more highly skilled people such as engineers.
Telstra expects to involve between 2000 and 2500 people by mid-1995 to roll out its broadband network. Optus Vision has predicted that it will employ around 1000 people by the end of 1995 and that this will grow to between 2000 and 3000 people plus contractors in three to five years.
New communications services will also give rise to process re-engineering in many other industries (including health, education, culture and government services), affecting their employment profiles, competitiveness and overseas customer base. To illustrate, a report to the then Department of Industry, Technology and Regional Development estimated the total Asia-Pacific market for telemedicine at $3.2 billion in 1993 terms.If Australia could secure 5 per cent of this market, it would represent exports worth over $150 million a year.
Some indication of the magnitude of effects on other industries can be found in the work of the United States Economic Strategy Institute, which estimated total savings in the American economy from narrowband and broadband developments (through, for example, decreased travel costs and other savings passed on to consumers) of US$19.5-$48.5 billion between 1998 and 2002 and $57-$112.5 billion between 2003 and 2007.
5. The degree to which industry will be able to take advantage of the opportunities presented
Although potential benefits for Australian industry are very large, the Group considers that action is necessary if industry is to take advantage of the opportunities; of particular importance is a cooperative approach by the key players in the industries of convergence to secure international markets. These players can pool their resources in pre-competitive areas such as education, skills development and export promotion.
Many other industries, such as manufacturing, professional services, health, education and culture, will be able to use broadband services to achieve important quality and efficiency gains and to reach international markets.
Chapter 5 sets out the Group's views on support for industry. It recommends that broadband cable operators be required to implement industry development plans, and also recommends that action be taken to accelerate the development, demonstration and use of networked services and applications.
6. The potential benefits to and impact on the Australian community of the availability of new broadband services
It will be clear from both the interim report and this final report that the Group believes the potential benefits (both social and economic) to the Australian community are very substantial. The Group's vision of the communications society is described in Chapter 1. There are nevertheless some potential negative impacts on the Australian community, including possible threats to privacy, the risk of the creation of a division between the information rich and the information poor and the risk of offensive or illegal content becoming freely available. Chapter 4 discusses the Group's approaches to these risks.
The Group also believes there are threats to freedom of expression if access to new communications networks is closely controlled. Accordingly, it recommends that an open access system be adopted for networks.
7. The inquiry will also examine the research and development effort required;
Chapter 5 notes that R&D is extremely important in bringing new products to market, and is also essential in developing the skills and knowledge needed by our organisations if they are to introduce and adapt foreign technologies and products intelligently. The Group considers Australia needs to build on its strong base through intensive efforts to apply R&D to our national competitive advantage in network technologies, content creation and applications.
8. The educational and training requirements for economic use of the proposed services options;
Chapter 3 notes that there are important training and education implications to be taken into account. The Group recommends that a National Strategy for Networking in Education be developed and that the Government provide funding support for training facilities. A theme impressed upon the Group during its work is that the capacity of children to learn by having fun - by playing with new services - will be extremely important in spreading the skills and knowledge necessary to take advantage of the opportunities awaiting us.
9. The funding mechanisms for investment in such services
In Chapter 1 the Group argues that private sector investment in communications infrastructure through projects such as the Telstra and Optus proposed networks would provide the major part of the investment required. It notes, however, that consideration should be given to mechanisms to ensure equitable access to a range of services. The Group recommends the provision by government of enhanced communications links to schools, hospitals, libraries and community centres (see Chapter 4).
10. The role of international standards
Standards should operate to encourage, rather than stifle, innovation.
Australia should use open international standards wherever possible, but not exclusively, because proprietary solutions can sometimes provide low-cost well-integrated solutions. The Group believes that Australia's needs are not being fully met by existing standards bodies: there may be a need for a single new mechanism to address broadband standards development and implementation.
11. The inquiry will identify options for co-operation among relevant interest groups
The Group considers that significant opportunities exist for cooperation among relevant interest groups in pre-competitive areas. The Group also considers that the involvement of a range of interest groups will be necessary in the continuing development of policies for the communications society. The Group recommends the establishment of a National Information Services Council to bring together industry, carriers, users and consumers, and researchers with an interest in communications networks to provide continuing advice to the Government on policy development.
12. An appropriate role for government within the context of existing telecommunications policy.
The Group puts forward its views on the appropriate role for government in Chapter 6. Briefly, the Government should adopt a national strategy for communications networks as outlined in the report. It should take a leadership role (through a National Information Services Council chaired by the Prime Minister with membership drawn from industry, creators, carriers, users, consumers and researchers) and foster an environment which is attractive to investors while protecting the interests of consumers. The strategy should be supported by a ministerial committee chaired by the Minister for Communications and the Arts to coordinate policy in this area.
The Group also believes that governments have an important role to play as leading users of communications networks both for internal use and to deliver services to the public.