The new broadband debate: Fibre-to-the-node vs fibre-to-the-home

Advertising and media kingpin Harold Mitchell has added his voice to calls for new Broadband and Communications Minister Stephen Conroy to give greater consideration to the possibility of building a national fibre-to-the-home broadband network.

The broadband debate has predominantly focused on how to build a fibre-to-the-node network – a cheaper option involves building a central fibre-optic network but still relies on “last mile copper connection” to deliver internet services to homes and businesses.

Conroy has said he would welcome proposals from the private sector to build a fibre-to-the-home network, but he has ruled out contributing more than the $4.7 billion Labor has already promised – a figure arrived at on the basis of what would be required to build fibre-to-the-node infrastructure.

But Mitchell has reportedly urged Conroy to consider kicking in additional money to ensure the construction of a fibre-to-the-home network, which would but Australia “right up there with the top three or four countries in the world with our communications”.

“The current plan is to build a national fibre-to-the-node network at a cost of $8 billion, funded 50-50 by the private and public sector,” Mitchell says. “Labor should spend $10 billion and go fibre-to-the-home.”

Building a fibre-to-the-home network would be more expensive – costing an estimated $20 billion compared to around $10 billion for fibre-to-the-node – but Monash University Department of Management senior lecturer Nicholas Beaumont says there could be big gains for business in such a move.

“I believe the faster speeds and lower transmission I believe it would be huge driver of innovation – things like Facebook, Amazon; the web is basically opening the way to innovation,” Beaumont says.

And while cost is a factor, Beaumont argues a cost/benefit analysis justifies the bigger outlay. “Perhaps it would cost $20 billion, but the sums promised for roads over the next five years during the campaign are not much below that,” Beaumont says. “Fibre-to-the-home is much more ambitious, but if you go back to history when people have built other infrastructure like railways, people were aghast at the sums involved but they drove our productivity into the future.”