Our director previously wrote a letter to News Corp CEO Rupert Murdoch asking him to clarify his position on the Australian NBN. Sadly, these letters received no response. We have also published other posts sharing our view of News Corp’s influence on the NBN.
Recently, Mr Murdoch gave an interview to Sky News, which is part-owned by News Corporation, in which he revealed some of his views on Australia’s biggest public infrastructure project
Click ‘more’ to read the transcript and our comments.
Update: The video is no longer available, but here is transcript of Mr Murdoch’s comments (in the original video, between 00:32 to 01:27):
“The NBN was a ridiculous idea, still is, because people think I’m talking from my pocket and Foxtel. In fact, NBN would be great for Foxtel because it would take all those programs into every home. The technology has passed these things now.
We have in Australia, thanks to the much controversial, the very controversial Sol Trujillo [former Telstra CEO]. We probably have the best mobile telephone system in the world. We get 45 megabits [per second] or 44 megabits [per second] pretty much wherever we are.
You go down the streets of Los Angeles or New York and you get about 7 [megabits per second] and you lose your connection all the time, and they can’t make up their mind in America what to do about it.”
Our Opinion
It is clear that Rupert Murdoch is against the NBN and he believes that wireless mobile data provides a cheaper, but equivalent substitute. We are disappointed by the ignorance in Mr Murdoch’s statements.
On Rupert Murdoch’s comments regarding Foxtel:
We note that both the ALP-initiated FTTP-network and the Australian Liberal Governments proposed Multi-Technology Mix would provide sufficient download bandwidth to broadcast Foxtel Pay TV in compressed form at current HDTV resolutions (1280×720 and 1920×1080).
On Rupert Murdoch’s comments regarding mobile telephony/mobile data:
Mr Murdoch does not seem to appreciate the difference between the peak speeds one can achieve on a 4G mobile network and the average speed a subscriber can achieve, especially when there are many mobile data users all attempting to transfer data at the same time, which results in a massive degradation of performance.
In fact, it is almost certain that those poor speeds and frequent disconnections, that he claims are common in Los Angeles and New York, are symptoms of heavy mobile network congestion. The only solution to alleviate congestion is to:
- Build more towers
- Upgrade cell towers to newer wireless technologies that make better use of the spectrum
- Allocate more radio spectrum
- Provide other connectivity options to reduce the need for subscribers to use mobile data
- Increase the price of mobile data access enough to make subscribers cut down on their usage
If those options are considered impracticable or uneconomical, then subscribers have no other option but to tolerate a low quality of service.
These reasons go a great way in explaining why Telstra (and other) Australian 4G network often perform well – at the moment, they are not too congested. Australian 4G mobile data plans are priced much more highly and offer the fraction of the monthly data allowances of fixed-line ADSL connections.
Australian users generally use 4G only when they are on the move, and rely on their fixed-line broadband for bandwidth intensive activities – e.g. cloud file storage, media streaming. There is a smaller group who use 4G because they are in an area where ADSL is unavailable or they need the higher upload speeds that 4G provides.
The NBN, especially a Fibre-to-the-Premises NBN will in fact increase the speed and availability of mobile data. It will be much easier for Telcos to install cell towers, as they will be able to use the NBN as backhaul.
On what Rupert Murdoch did not mention:
As Rupert Murdoch is by large a businessman, one would expect the following to be highly relevant:
- The economic impact of having Australian Internet carried over an infrastructure that breaks down far less frequently, lasts longer and requires much less maintenance. This is what the FTTP NBN provides.
- The economic impact of having Australian Internet carried over an infrastructure that can easily scale to an arbitrary capacity, requiring nothing more than changing the network termination at each end of the cable with higher-bandwidth devices that are available with today’s technology. This is what the FTTP NBN provides.
- The economic impact of allowing businesses to operate internet-connected servers in their own offices, located anywhere in Australia, as opposed to requiring them to relocate to an expensive central CBD location or business park that is lucky enough to have fibre installed already. This is what the FTTP NBN provides.
- The economic impact of allowing internet users to quickly upload data into the cloud. This is what the FTTP NBN provides.
And of course there’s what we did not expect Ruport Murdoch to mention:
- The impact to Rupert Murdoch & News Corp of having other businesses being able to cheaply offer competing Pay TV and video-on-demand services, also provided by the high upload speeds offered by the FTTP NBN.
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