NBN and Roads: Why the city should pay the bill
I’ve been a bit of a fan of Ross Gittins of the Sydney Morning Herald as a writer on economics: he is one of the few of his kind who makes a point of reminding us that Not All is Money and that humans have other perfectly good reasons for doing things other than for financial benefit.
But a passing remark he made yesterday has started to piss me off a bit. In a piece for the SMH in which he tried (not very convincingly) to suggest that the NBN really might need a CBA job from the Productivity Commission, he echoed a refrain that is almost a cliché, and which probably shares a good measure of falsehood with many clichés.
He suggested that city users would be subsidising country users in the development of the NBN network (although admittedly he thought this was a good thing).
A lot of economists take this view and then take it further. They’re doing us country folk a good deed by paying a big chunk of the cost of the NBN — when presumably, by all rights, they shouldn’t have to. After all, they’re all in the city, and the NBN lines run out to the country, and when they run lines long distances out of the city areas, where there aren’t so many people, that’s the rural responsibility.
Now this may come from my relatively recent rural experience, but I think that last bit is basket-weaver’s codswallop. It’s more a case of condescension from city-based economists than a piece of clear thinking. Really clear thinking should start from the assumption that when the city pays for communications in rural areas, all it’s doing is taking up the bulk of the bill it’s responsible for, and maybe a teensy-weensy bit more.
For a time, I worked in Sydney’s Flemington markets, in a fruit and vegetable merchant’s office. Looking back on it, one thing I recall distinctly is that that business had very few incoming calls from the rural suppliers of produce to the city: the boot was on the other foot. The merchant’s office was the one doing all the calls — they were the ones initiating most communications. And as it is with fruit and vegetable, so it is with everything else. Our cities dominate our economy and our social life in so many ways.
It gets down to a question of perspective and population.
The basic pattern goes like this:
- Communication is a two-way thing. There’s always someone at each end.
- The vast majority of Australians live in the cities.
- Use of communications, like roads, is a function of population.
- Most phone calls and communications involving rural connections are initiated by the vast majority of users living in the cities, just as most rural road usage actually has city origins.
- If city people make by far the bulk of the calls, they should pay for them.
So why don’t all of you in city economists who keep jamming up our phone lines and our roads just sit down every time you want to talk about subsidies and tell us what proportion of the costs you’re responsible for, and what proportion us Country Folks might be up for?
And don’t just talk about capital costs when the usage made possible by the capital expenditure is all the other way.
I have this sneaking suspicion that this great subsidy is a lot less than those who talk about it so grandly all the time want to imply. A quick stab in the dark says the city is responsible for 90% of the traffic and should be paying at least that.
Anyone got any better figures ?
Postscript and Rethink….
I wrote the above early this morning and then went back to bed to think about it all.
I think I got it wrong. There’s every reason for your city-slickers to pay for the lot.
It’s all to do with networks
The N in NBN stands for network… just as it does in PSTN (the phone system). And a feature of modern networks is they are designed for redundancy. They’re not designed in a simple fish-bone or tree pattern, with a single trunk and some nodes. They’re much more intricately interconnected.
This applies to a limited extent to roads. If there’s a bad prang on the Pacific Highway north of Newcastle, and the highway is blocked, there are two options: you can sit and wait until the road is clear, or you can head off via, say, Stroud and Gloucester, and get on with your journey. There’s more than one way to do the trip.
With phone calls and internet connections, the option of sitting and waiting is not much of a choice, and these systems, and particularly the internet, have been built for a high level of redundancy — a good deal higher than our road system.
Two features of the modern network are particularly relevant:
- a connection design pattern which makes sure that there are many multiple paths to any given point on the network; and
- the use of devices such as intelligent routers which can sense and report on traffic patterns and can redirect a connection away from busy circuits or around a break in the connections.
The availability of these features is one reason why things like STD charges for phone calls are simply a bad joke. If you’re making a call from say, Mosman in Sydney to Parramatta, then depending on current traffic patterns, there’s every chance your call might actually be connected through a 100 kms of cable via Wollongong or even Newcastle, particularly if a bulldozer just cut a major trunk line somewhere near by. The routers just do the job automatically.
What this system depends on, though, is the existence of a set of “fallback” connections that link around any trouble spots. “Fallback”? Well maybe, but also, think maybe “Rural”?
Yes, folks, when that call to Sydney to Brisbane is cut by the effects of the floods at Coffs Harbour, you won’t even know it, but your call or your internet hook-up will be going through places you’ve never even heard of. It’ll be slipping by on the country bumpkins’ part of the network which you think we bumpkins should all be paying for in spades.
So somehow some of us don’t think of rural connections as being something you “subsidise” out of the goodness of your heart. Rather, it’s something you need and probably finish up using much more than us locals do.
And come to think of it, even when we use our home nodes to connect into an ISP somewhere via a local switchboard, one thing we are doing is testing the availability of these rural fallback systems for you. If we can’t connect, and report it, the redundancy system can be maintained for your use when times are tough.
So when it comes to rural connections, you city slickers really should pay your dues.
And we bumpkins could do with a nice fee for all the circuit testing we do for you on your backup communications.
Just slip the cheque in the mail anytime now.