The Digital Divide – a creation of the NBN

Telstra NBN

Last night our Managing Editor, Ray Shaw, was the prime witness as to some of the deficiencies of the NBN. He appeared on “7:30” on the ABC in a segment on the “Digital Divide”. Golly, I wish my office were as neat as his! But what got me expostulating futilely at my TV was Federal Communications Minister Mitch Fifield.

You see, it seemed to me he was saying the equivalent of: “Why do you need a smart phone? A flip phone is all you need to make calls.”

Fifield was interviewed for the report, of course. And he made some points with which I agree. “The real digital divide in Australia,” he said, “is between those who have the NBN and those who don’t have the NBN.” I am someone who still doesn’t have the NBN, so I can’t help but agree.

And, of course, he spruiks the NBN’s virtues: “Ninety per cent of people on the fixed line network … will be able to get speeds of fifty megabits per second or more. Seventy-five per cent of people will be able to get speeds of a hundred megabits per second.” That’s fine.

But then he added, “You only need five megabits per second to watch high definition Netflix.”

Embedding the Digital Divide

He’s right, of course. I watch high definition Netflix. And my home and office get somewhere between five and six megabits per second. That’s not the problem.

The problem is that in my home and office I was getting somewhere between five and six megabits per second … back in 2006.

Remember then? I had a Samsung flip phone with a VGA-quality camera. Smart phone? The original iPhone was just about to appear in America, still a couple of years off for us in Australia.

Back then, a 4GB SD card cost $90. Today, that $90 (which is worth less now than it was then, thanks to inflation) will buy you a 256GB microSD card. And let’s not talk about CPUs, gigabit home networks and all the rest.

Compare any aspect of communications and computing technology between 2006 and 2019, and you’ll see they’ve all improved by a couple of orders of magnitude. Except fixed line Internet for those of we Australians who are yet to benefit from connecting to the NBN. Those of us on the wrong side of the digital divide.

According to the “7:30” report, a quarter of us still don’t have the NBN installed in our areas. Now that’s a digital divide.

In reality, it is almost indisputable that the reason my fixed line Internet speed has remained stuck at under six megabits per second these last dozen years is entirely because of the NBN!

How to get fast Internet

A couple of years ago I interviewed Pat Griffis from Dolby Laboratories. He’s now also President of the Society of Motion Picture and Television Engineers. He was here in Australia speaking up the benefits of Dolby Vision, which is available on a number of Netflix programs. I noted that there could be problems here with it because of Internet speed. To illustrate, I mentioned that I was getting that 5-6Mbps speed.

Griffis looked honestly shocked. He gasped that in San Francisco, where he was based, “even the homeless get faster speeds than that.”

Well, that’s San Francisco, so of course it has higher Internet speeds than, say, the Canberra suburbs.

Except that it didn’t used to. Back in 2007, according to a US free market think tank, the Mercatus Center, San Francisco (and also Washington DC) was also on 6Mbps, the same as me. That was up from 1Mbps in 2002, same as me.

What was not the same as me was that in 2008 they jumped to 20Mbps. And in 2013 to more than 50Mbps. And again in 2015 to nearly 80Mbps. While I was stuck on less than 6Mbps.

Why did their speeds increase, while mine remained stuck? The NBN. There was a digital divide between those with access to the NBN, and those of us without.


You see, the fixed-line Internet system was improving, organically and in the normal course of business, up until 2007, both here in Australia and over there in the US. But the moment the NBN was announced, everything changed here. The telecommunications companies stopped their investments in ongoing network improvements dead. Just like that. Why would they invest if a government-owned monopoly was taking over the whole system? There could be no return on their investment.

So, of course they shifted to maintenance mode. They fixed problems with the lines as they arose but did nothing to improve them. Why would they?

Meanwhile, in the US network improvements continued as part of the normal course of business. One of my daughters lives in a normal suburban apartment near the edge of Oakland, California. That’s the city right next to San Francisco (it’s considered the poorer of the two). For $US40 per month she could get a 60Mbps connection. Not fast enough? How about 250Mbps for $US60? Or 1,000Mbps for $US90?

Or if she wanted to do some heavy-duty data shuffling, she could pay $US300 per month for a 2Gbps connection.

On the “7:30” report, one of the other subjects was a video producer who seemed very happy with his NBN connection. I couldn’t help but notice that his meter was showing 92Mbps. Would he be even happier if he could get ten times the speed for around the same price?

Not convinced?

Still, that’s America and this is Australia. How can we know that the private sector would have continued improving things in the absence of the NBN?

Well, it turns out that the private sector did continue to improve things in the one big part of Internet connectivity that isn’t an NBN monopoly. That is the cell-phone network.

In 2015 I was sitting at a park bench in Hyams Beach on Jervis Bay, New South Wales, 25 kilometres south of Nowra, using my 2013 Android phone as a WiFi access point. And I was pulling in 26Mbps from the Telstra 4G network. That’s more than four times what my home fixed line broadband offers to this day. And it’s somewhere between ten and a hundred times faster than what was on offer on the cell phone network back in 2007. Heck, Mr Fifield, with that kind of a connection I could stream Ultra High Definition from Netflix, not mere High Definition.

Since then, using more modern phones, I’ve seen download speeds of up to 270Mbps on my phone. As 5G starts rolling out, things are just going to keep getting faster and better.

There’s no digital divide if you’re using your4G/5G data. And there’s no digital divide between Australia and America when it comes to cell-phone use.


In the late 1980s the Hawke Labor Government privatised Telstra and introduced competition to the Australian telecommunications market. I guess many people can’t remember the monopoly Telstra. I’d just note that if you wanted a phone, you’d apply and would typically wait up to six weeks for installation.

In 2007, the Rudd Labor Government re-created a de facto monopoly for fixed line Internet connections.

The lost opportunities for those who placed a high value on faster Internet but have had no access to it this past dozen years, are incalculable. Some people – that video producer in the report, for example – actually moved house in order to access fast Internet. But few of us can do that.

Instead, we’ve had to wait for NBN to decide, through its cryptic practices, when we’d be granted to boon of access to Internet speeds which are now several years behind the state of the art.

But I don’t blame the NBN company itself. Perhaps it could do this thing or that thing better than its doing. But the effect there is marginal. No, the fault lies with arrogant politicians who decided to jump into a market that was already developing very nicely and destroy it, holding the delusion they we somehow improving it.