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STANDING COMMITTEE ON INFRASTRUCTURE AND COMMUNICATIONS
04/04/2011
Role and potential of the National Broadband Network

CHAIR —I welcome the representative from the South Australian government. Although the committee does not require you to give evidence under oath, I should advise you that the hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. We have a written submission, and I commend you on the quality of your excellent submission. Would you like to make some opening statements and then we will have a question and answer session?

Mr Mills —The South Australian government considers broadband vital to the future of the state, as well as essential in improving the delivery of government services to our citizens. It has had long-term support for broadband. Since 2003-04 it has invested $7 million of its own money, along with partners and with the Commonwealth, which added up to about $42 million worth of investment in a number of broadband capabilities, particularly in our rural and regional areas.

You have heard about Cinenet this morning, which was one of those, but there was SABRENet, which was an education and research network that joined all of the major research and educational institutions in South Australia. There have also been a series of broadband projects with the dual aim of improving government services and services from government facilities in those areas, as well as the side effects for businesses and citizens in areas such as Port Lincoln, Mount Gambier, Murraylands and Yorke Peninsula, as well as currently finishing off a black spots broadband project for Adelaide. One of the challenges we have is that broadband access is not ubiquitous across the city.

CHAIR —I am interested that your submission raises a point on page 4 about the issue of attracting staff to difficult staff areas. You give the example of the APY Lands latest enterprise-bargaining agreement, where one of the things that the nursing staff required was that you would provide ADSL to the houses. We had evidence from the Rural Health Alliance in Canberra that if the younger generation of GPs and medical specialists cannot stay connected to their world through a good broadband service it is very difficult to get them to go to remote areas. Would you like to talk to us about what your experience of that has been and how significant it is. We tend to think of providing it to provide the services they are taking, but it is clearly also a recruitment and retention issue.

Mr Mills —I cannot answer in detail, because it is not my area. But, yes, what we have seen from our agencies is that one of the key issues, particularly with younger staff, is getting them access to broadband capabilities. But it is not just those areas; it is allowing them then to deliver services better. It is those sorts of issues. As well, it is not just in remote and regional areas. There is no doubt that it will have an impact on our workforce over the next five to 10 years, particularly the ability to telecommute and do much more work away from the traditional workplace, with its obvious flow-on benefits for congestion, carbon et cetera. So we see a lot of benefits from a workforce point of view around improving how we deliver services and how we do our workforce planning and provide capabilities.

CHAIR —Further to that, something that is consistently raised with us is that as a nation we tackle major city congestion, climate change and environmental challenges and that this could be part of the solution, through telecommuting and home based businesses. But it is really difficult to find information, actual hard data, on how many people are running home based businesses, how many people are telecommuting and indeed what policies are in place to support telecommuting. I am interested in the task force experience in those areas.

Mr Mills —The experience is actually not from task force but from some cross-jurisdiction work that we have been doing with other jurisdictions on telecommuting. It is very patchy in government and there have been a lot of pilots. I believe one that you actually talked about came from Wollongong. I understand New South Wales have been running pilots in Wollongong and Newcastle. But again the technology has not been there and the bandwidth has not been capable of supporting it.

One example is videoconferencing. Unless you can walk in, switch it on and it works, it is very difficult to use. With the current technology and the current bandwidth you cannot achieve that ubiquity; you cannot achieve that outcome. We are doing a lot of pre work at the moment on those sorts of issues. We are doing a lot of work internal for government to get videoconferencing to the desktop and also to connect between agencies, which is another key issue for us. But until you can get that type of bandwidth and that sort of capability out to the home people will continue to need to come into work. In a sense it is an idea that has got a lot of merit, but the supporting of mobile workers is quite difficult and until we get better broadband and much more ubiquity—I will keep using the word—it is not just about it being broadband; it is about it being available everywhere. That is the key issue for us in that space.

From a broader industry point of view we are seeing more and more of it, but again a lot of the anecdotal evidence is the challenge of getting broadband out to the smaller industries. It will be interesting to watch Willunga as the first rollout site—a very interesting town in the sense that it is a village but it is close to the city. There are nearly 1,000 ABNs registered in that town of 1,100 premises and about 600 where there are multiples, and I think about half of that 600 have registered for GST as well. I think the SME market will be where this will have the most impact and actually broaden their capability to do their job better.

CHAIR —On the teleworking issue, another thing has been raised. I telecommuted in the late nineties on dial-up, believe it or not.

Mr NEVILLE —You lived to tell the tale!

CHAIR —Yes. It had its frustrations, but it was not as frustrating as driving four hours a day to and from Sydney. It struck me, and I hear this anecdotally all the time, that one of the big barriers actually is attitudes. The technology will facilitate it, but in some ways we have damaged the brand because the technology was not there to support it. I am wondering whether you have any experience or concept of how we can rebuild the concept of what it is able to do, now that the technology can support it in real ways, because I think there is a level of—

Mr Mills —I am not sure we are there yet. That is my comment. One of the reasons we are really supportive of the NBN is that you need that sort of bandwidth, not what we still have at the moment. It is on the edge of the cusp. For the companies that I have seen using it, particularly some of the Australian based companies that have gone deep into the ability to videoconference from desktops et cetera, I do not think it takes long the culture to change. That is the issue. When it is good enough it will move, but until it is good enough it will not.

CHAIR —Is there a company that you could think of about which you could provide us some information?

Mr Mills —I would like to check up with them first.

CHAIR —Of course—absolutely.

Mr Mills —There is one that we deal with locally that uses it quite considerably. They have offices right around the world but also in Australia. The head office is on the east coast and the locals use it quite a lot instead of travelling

CHAIR —If you would not mind, it would be the really good for us to have a hard example of where that has been enabled, and to see the difference it has made would be great.

Mr Mills —They are not manufacturers of the equipment. I think it is better to find someone who is using it, other than someone who is selling it.

CHAIR —Exactly. That would be great. The other issue in your submission that I wanted to take you to was where you talk about education capacities. It is fair to say that your submission emphasises very much that a lot of that is video based and interactive. You made the point several times about the symmetric nature of that engagement for it to be meaningful. You talk about the Adelaide based Royal Institution of Australia. Could you give us a picture of what that actually does and the difference it is making?

Mr Mills —It is the first royal institute outside the UK. Our government runs the Thinkers in Residence program, which is basically bringing thinkers here for three months, six months or 12 months to look at particular issues. The Royal Institution is an outcome of one of those thinker’s programs. It is about connecting both ways with science, connecting citizens back to science and vice versa. The Royal Institution has a physical location here in Adelaide. In fact, it is not far from here, at the old Stock Exchange building, which has been renovated. Its main aim is to run training courses and give information to the public. There are physical and virtual meetings for the public. It has all its content on demand with a web delivery approach. Again, the challenge with most of that rich content information is that, unless you have a reasonably fast connection, it is not the easiest thing to work with. It is aimed at improving science in society and part of that is driven from the education side. We are finding that science and maths teaching is something that we are trying to build up. It is about reconnecting with society.

CHAIR —It is interesting. Simon and I were on the education committee previously and looked at the issue of science teaching and lower science enrolments. It was pointed out to us that young people were not doing the subjects but they were at home watching National Geographic and all of those sorts of the things and we were missing a connection. Is that what this is trying to—

Mr Mills —This is part of that connection: to reconnect our society with science.

CHAIR —And also the schools—is that what you are saying?

Mr Mills —Yes. And to provide resources for school teachers and students to use around science. Again, it is a resource base for education.

CHAIR —But heavy video is the issue?

Mr Mills —Yes, but, again, there is quite a lot of face-to-face et cetera to complement that. Online delivery is one of its core delivery methods.

CHAIR —Fantastic.

Mr NEVILLE —Thank you to your submission. It is a very good one. You talked in your opening comments about what the government has done thus far to link up schools, health institutions and the like. What proportion of that over the years has been done with fibre? If not mainly with fibre, what technologies have you used?

Mr Mills —It was actually a combination of technologies—fit-for-purpose et cetera. Part of our approach, where we did not have any competitive backhaul, was to look at the backhaul issue. We have some parts of South Australia that did not have a market for backhaul. We were challenged—

Mr NEVILLE —Have you leased that from other companies?

Mr Mills —We worked with a carrier and provided some funding from us and the Commonwealth but also the carrier. The carrier owns it and it must sell on. Because of where the money has come from, they must sell wholesale. We used a combination of fibre and microwave for those because of cost. After building fibre for the government, we were looking for the cost-effective outcomes at the time, knowing that it was relatively short term.

Mr NEVILLE —To what extent will the NBN enhance that?

Mr Mills —We hope it will replace it.

Mr NEVILLE —Replace it completely?

Mr Mills —Yes.

Mr NEVILLE —Or will part of the fibre you have rolled out become part of the new network?

Mr Mills —We are having those conversations with NBN. We do not know and they do not know. In a sense some, some of it is private in that it links government entities and we do not know what is happening to our private infrastructure at this stage.

Mr NEVILLE —You have highlighted the importance of backhaul. I can imagine that that would be more so in South Australia given that most of the population is in greater Adelaide, south of Adelaide or around the gulf, so about 80 per cent of the state is outside that area.

Mr Mills —It is 80 per cent of the state but not 80 per cent of the population.

Mr NEVILLE —Yes, I understand that. It is 80 per cent of the landmass.

Mr Mills —Yes.

Mr STEPHEN JONES —Kangaroos do not use a lot of broadband!

Mr NEVILLE —I am not suggesting that kangaroos do use a lot of broadband. The point I am trying to make is that you also go on to talk about WiMAX in your submission. You quote Obama quite liberally in your submission. I am not saying that it is inappropriate; I think it is quite appropriate. For that WiMAX possibility to exist you will have to have fibre spines out into regional South Australia.

Mr Mills —Certainly.

Mr NEVILLE —Not to the kangaroos, necessarily, but certainly to some of the pivotal country towns, even though they might be small.

Mr Mills —Yes.

Mr NEVILLE —What are your plans for that and are you satisfied with the planning so far by the NBN in that respect?

Mr Mills —It is a bit difficult to make that statement because we do not know sufficient yet about—

Mr NEVILLE —How far out they will go?

Mr Mills —We have certainly seen the fibre footprints. Our distinct preference is for fibre as far as it can go, because of its longevity. But there is the reality that we will need to cover some with wireless. Our least preferred preference is for satellite, even though some will be there. We wish to see that only as the last resort. Regardless of even modern satellites, the latency issue does bring a lot of challenges for us. There is no doubt that a proportion of our population will be on satellite. So our preference is strong for as much fibre as possible, understanding that that will not be there, and then for wireless to support the next layer, and to go as far as possible with that. I think the challenge with wireless is that this is a 10-year project. Certainly the challenge we have at the moment is that we do not know what future generations of wireless will provide us. We do know, though, that spectrum is a limited resource and so it will not necessarily provide the same sort of performance to everyone who is on it, as you can do with fibre. So, in a sense, we would like to see that minimised but we realise the reality that we will have wireless out there. Our broadband projects are a combination of fibre and wireless for connection, so we accept that.

Mr NEVILLE —I would be interested to know what the government’s view is on the proposal made about 10 days ago that the NBN might sell to selected government agencies and the like, allowing them to be their own ISPs, so to speak. Do you have any plans to operate in that field—for example, to link a government department and its offices, or several government departments or government agencies, into an internal ISP? Is that on your radar?

Mr Mills —I will start my answer by saying no we will not retail to anyone else. There would be no intention for the government to get into providing services to anyone else.

Mr NEVILLE —What about to yourselves?

Mr Mills —We already do that. We already have quite a large private network of our own, but at the moment we also buy quite a lot of our connectivity from retail service providers. We have six companies that we deal with across government.

Mr NEVILLE —So it is a mixture of your provision and theirs?

Mr Mills —Yes. We have a mixed environment at the moment.

Mr NEVILLE —Let us take the case when NBN overlays that. As you said earlier, you hope that it will replace it. Do you plan to maintain that internal structure in that circumstance?

Mr Mills —No decisions have been made yet. I will get a little bit technical for the moment. It depends on what layer they will sell at. So, in a sense, we will need to maintain at least some layer of functionality. At the moment we basically own a private network, so the box at the end is ours, and we then use telecommunications companies or our own facilities to join those together. We then also join back to the wider internet through a single gateway. So we have quite a structured approach to this right across our agencies.

Mr NEVILLE —In that mix are the government or the government agencies the billing entities, or does the billing come from the retail entities that you are working with?

Mr Mills —The retail entities bill our customers directly for the services they buy off them. We also do run an internal aggregator.

Mr HUSIC —There is a great danger in this committee becoming a submission sycophant so I might as well join in. It is not to take away from the quality of the other submissions but this was a very strong submission. One of the things that stood out is how seriously it appears the government is taking the opportunities presented by high-speed internet. As a result, I have three questions. The first goes to talking further about any identified economic productivity benefits that you see accruing to the state from the rollout. The second is something on which I raised questions with the representative from the City of Tea Tree Gully, who I think is still here, and relates to how the South Australian government is engaging with councils, chambers of commerce and regional development authorities on how to best maximise outcomes and benefits in their areas. The third relates to a reference you made in your submission on page 8. This was more about the environmental or power impact and the savings that might result. On page 8 you said:

Improved bandwidth into schools and government locations will support centralised provisioning of applications and storage of data. This will result in a significant reduction in ICT equipment and lead to associated reduction in the use of power for the equipment and necessary cooling.

What estimates have been generated from that? Have you been able to quantify that a bit further? So my three questions go to economics and productivity, to working with local government and regional development and to environmental benefits and savings.

Mr Mills —I certainly cannot answer in any detail on any of those issues but I will talk in general and we might be able to provide something more. On the economic side some studies have been done on the impact of broadband. One on the Yorke Peninsula has been made public, and I am sure we could get those for you. From work we have done already in looking at improving broadband out there, even though it is old-generation broadband, if you want to put it that way, which is ADSL et cetera and some wireless capability—there have been some economic studies done on that. I will have to go and check but I think we are also doing some work in the Murray-Mallee area from that side. So we have done some work in that area. Again, it is certainly early work and we could go to a more sophisticated level. But, as always, the challenge is how much work do you spend on studies and how much do you spend on doing the real work. So some work has been done there.

More generically, and I am not sure whether you have read it, we had a Thinker-in-Residence called Genevieve Bell, who did some work on connectiveness in South Australia. While it is not on economics there are some key delineators in there. Ms Bell, an Australian, is a senior person with Intel in the United States and came back to Australia and did that. I can also provide that information.

We have a long-term program of quite a few years, through one of our groups, our Information and Economy Office, working with local councils and regional areas, not just on broadband but also on digital literacy, abilities, connecting up, telepresences, internet cafes et cetera. That is ongoing work that we have been doing quite successfully.

All the projects we have done in the regional areas have been with councils, regional development boards and those sorts of groups. It has only been the state government. We have been more a coordinator and a collaborator than a leader and driver in those; we have been supportive.

CHAIR —I would like to just clarify that. Is that a specific program that you roll out to all councils and regional development, or do they come to you seeking advice?

Mr Mills —It is a mix of quite a few programs. I can get some more detail for you. I do not have it with me today.

CHAIR —If there is something that has been particularly effective and has made a difference for regional participation, which is what we are looking for, that would be useful.

Mr Mills —We can do some work there. I think you will find that, as with Prospect and Tea Tree Gully, we have been working with all our councils. In some senses we see that some of that should be council led more so than state led, because each community is quite different, so it is having that local approach with us in support. In a sense we see ourselves, along with NBN, in a supporting role more than a lead role. We have the Commonwealth government. It is a Commonwealth government program so we are expecting them to lead. We expect the NBN Co. to get out there and start talking, and we will support them in that space. So it is a mixture of those four. I do not think any of us will do everything in it. I think a lot of education is needed about what it can do and what the impacts are. I think that is one of the things we would want to see.

Mr HUSIC —How do you think NBN are performing on that issue of community engagement?

Mr Mills —From what I have seen so far, particularly at Willunga, which is the only one I can judge very well, they have the people in place and they are doing that sort of work. They are working at the grassroots level. I think we need to see a bit more public conversation around those sorts of issues. I suppose the example I would use is that, if you watch the digital TV rollout, there is some work to be done to get that level of understanding that this is coming, it is happening and what the impacts are. So there is work to be done there. We have some successful programs with our councils, the regional boards et cetera, so we will continue that work.

The third one was the savings, not specifically on what NBN is going to do for us. What it does is basically allow you to put your ICT equipment where it is best situated. Where is the cheapest, where is the best and how can you situate it? You are not forced to put it out into, for example, Coober Pedy. Power is pretty expensive at Coober Pedy because it is so far from anywhere. It is about the ability to get big ICT equipment out of Coober Pedy and into the city, close to green power generation facilities. We are starting to look at co-generation coming along for some of our data centres. Being able to use that will certainly give us savings both in dollars and in greenhouse gases and the usage of power et cetera. But that is not just for regional areas; that is something right across the board at the moment. We are seeing that happening.

CHAIR —Is the government also looking at the capacity for cloud computing?

Mr Mills —Certainly. In fact, there is a cloud meeting going on in my office at the moment. It is certainly the next generation. Again, it is a challenge for government. We have to deal with some of the sovereignty of data issues, but we see that as the next generation. I think we will come around the circle and see that, with the NBN, rural and regional people particularly will be able to start using those facilities, which have not necessarily been available to them before. When you look at things like the amount of video out there now, without this sort of bandwidth the digital divide will get greater.

Mr SYMON —I would like to continue on in the economic vein, as it were, and ask a question in relation to your submission. You have quoted the World Bank report estimating that every 10 per cent increase in broadband penetration results in a per capita increase in GDP of over one per cent. I have a couple of questions to ask about that. What is the current penetration of broadband in South Australia? Do you have that figure?

Mr Mills —I would probably put the question back: what do you define as broadband?

Mr SYMON —That was my second question to you, because it can be many speeds. Obviously we are talking about what is here now versus what may be here in the future.

Mr Mills —If you consider 3G to be broadband, which I am not sure you can, it certainly has good coverage in the populated area and along the highways, but it peters out very quickly once you get beyond that. There are a significant number of places in South Australia that do not have it. I will give you an example: the APY Lands has very little mobile coverage. In terms of broadband projects, one of the aims was to put fixed wireless out there for those areas. We have done Port Lincoln up in the Murray lands and extended that. We also used the towers there and put Wi-Fi on them. Again, we would be pushing it to call that broadband going forward, but at least it is a starting point. ADSL has reasonable coverage. We can provide you coverage maps if you want. I do not have them here, but we certainly have maps of where the coverage is at the moment.

What has happened is that ADSL has also appeared in a lot of places that are cabled up now. With some of our own funds and other funds, we worked with four of the communities in the APY Lands to get ADSL up there. That is why we had that conversation. It is certainly not in all of those settlements, but at least we managed to get ADSL into four of them through some work we did with the carriers. So it is patchy. You can drive through a lot of places around South Australia and your phone does not work. The challenge is there, if you read Genevieve’s report. I will go back to the symmetry issue. In a lot of those places, broadband is basically a broadcast medium. It is not a two-way medium, and that is one of the challenges.

Mr SYMON —With those local examples has there been any measurement of economic improvement done where you have put a basic broadband service in?

Mr Mills —The report we have done on Yorke Peninsula, which we can provide a copy of, will give you some of that.

Mr SYMON —I would like to go on and ask another economic question, which is bit unlike me. On the next page you have got increasing household and business productivity and there is a line there about household real income effect. It then goes on to say: ‘households will experience cost savings and enhanced income earning opportunities as a result of adopting broadband and these will grow over time. We have estimated the household real income effect at 20 per cent of the value of consumer surplus.’ I would just like to ask you: what can I make out of that statement? I do not quite understand it.

Mr Mills —What page was it on?

Mr SYMON —It was on page 10 down the bottom. I do not quite understand the 20 per cent.

Mr Mills —That is the study I talked about. We will be able to provide you with more detail. I am not sure I have got the ability to talk about it in detail now.

Mr SYMON —All right. I will stop asking hard questions and ask an easier one. You also talk about on-the-job remote learning. It is not something we have spoken about too much so far in the committee, especially here. We have touched on it a couple of times. I have seen in workplaces virtual simulations of training and I take it you are referring to this being done in an off-site area—for instance, being delivered to a mining site from a training facility right here in Adelaide. Is any of that happening at the moment or is it waiting on greater bandwidth to be available?

Mr Mills —Not to my personal knowledge. I will take that on notice and try to find if it is happening anywhere. Certainly the mining companies are telling us that a lot of their training is now simulation. There is now real simulated work et cetera. The ability to deliver that on-site is one of their key needs. I will do some checking up. I do not know of a specific example at this stage.

Mr SYMON —That is enough questions from me at the moment. Thank you.

Mrs PRENTICE —What we have heard today from other cities and operators is that to get maximum benefit you need maximum take-up. We were disappointed to find in Tasmania that there has not been the take-up level that we need to make it as effective and efficient, particularly for government services. Do you feel that that is perhaps a role that the government should undertake and have you looked at any promotion or other ways of engaging people to stress the importance and encourage them to take it up?

Mr Mills —I suppose there are two issues. We have not seen the problem here. Willunga is 90 per cent plus in the take-up of the connection. We have not gone to the next stage yet so it will be interesting to see how many people actually take up the service. As I talked about a bit earlier, we see ourselves as having a supporting role in this. Certainly we see that the Commonwealth should lead on the education for the community. Part of the problem may be the education part of it, particularly in the first rollout sites. I think there is a bit of work to be done on explaining to the community what it means to have broadband and what it will bring for them. The example I use when people ask me is the use of a Wii game in the household to help the repatriation of a heart attack victim and the ability to cut a drive to a hospital and a drive home out of their rehabilitation program so you do not lose that part of the rehabilitation.

CHAIR —One of the most powerful ones we heard in Tasmania was the resale value of your property if you are not connected. That was a successful message for people.

Mr Mills —I use those types of examples. We see ourselves as supporting that. As the rollout will be regional in its basis, I think there is a strong council part of this that we will work through. Where we have seen the local councils being very digitally aware, we are not seeing those issues. I think Prospect is coming up and I am sure they will talk about this issue. They have spent a lot of time and work on it. Going back to the earlier question about community programs with small business, working through those and getting them ready for it, from the economic point of view I think it is the small businesses where the real benefit is going to be in the shorter term.

For us in delivering government services, having the citizen connected and having the ability for us to get services into their houses and for them to get services out is going to be a key part of this, particularly for health and education. In health, the ability to have a videoconference with your GP and not have to go down for a visit, or the ability if it is just an issue like needing a repeat prescription to do that over the wire and not have to go and take up a 15-minute consultation with the doctor will, I think, be key areas.

That is a long answer to a simple question but, yes, we will support that and we will look at it as we go. We have some work going on at the moment looking at what we believe needs to happen from our side and we will work through those. Again, I think national plus neighbourhood is going to be where the key messages will need to come from.

Mrs PRENTICE —On page 12 of your submission you stress the need for quality broadband for the continued development of digital literacy in contemporary Australian life for some of the Indigenous communities. Given that there will be seven per cent that do not have fibre, will you as a government look at perhaps rolling the fibre out to community centres in some of the more remote areas to facilitate that program?

Mr Mills —I think every instance will be looked at on a case-by-case basis. I do not think I can say that we would, but I would certainly look at it on a case-by-case basis. If you look at history, we have certainly done some work ourselves. In a sense, though, every dollar we spend on doing infrastructure is less we spend on delivering government services. Our hope is that NBN will provide that platform for us to then invest in the delivery of better services to our citizens. That is the key. Where we are focusing now is on that next layer of the challenge.

I think the challenge is that we do not even know yet what the services are that will be delivered over the NBN. That is the key challenge. We can use examples of where we are going, like telemedicine, which is a key one, and some of the education services. In some senses, what is going to be delivered in eight to 10 years I do not think anybody knows. I think it will happen and it will develop as we go. Look how quickly things like social networking have taken off. So I think the key challenge is for us to keep up with our core function, which is delivery to the citizen and supporting the citizen, and for us to keep up with that pace is going to be quite difficult.

Mr STEPHEN JONES —You have given some excellent evidence and the submission is great, so all that is left to me is to give you the opportunity to wrap a few things up. But, before you do that, there has been some questions and speculation about governments getting into the reselling game. You have stated categorically that the South Australian government has no intention of becoming a retailer of telecommunications services.

Mr Mills —We may aggregate for our own benefit but we do not intend to be a retailer.

Mr STEPHEN JONES —It is true, isn’t it, that at any time since 1996 if the South Australian government was so moved it could have obtained a telecommunications licence and got into the reselling game?

Mr Mills —We certainly could have, yes.

Mr STEPHEN JONES —You have chosen not to.

Mr Mills —We looked at that issue several times in that time.

Mr STEPHEN JONES —I assume to the extent that you are reselling within the government network that is essentially a cost centre redistribution of government costs.

Mr Mills —Yes, it is purely aggregating business to make it more effective and efficient for government services.

Mr STEPHEN JONES —I understand. We have heard some excellent evidence today about South Australian businesses. What do you think the NBN means, what opportunities or risks does it provides, for the people of South Australia?

Mr Mills —I think we talk a bit too much about the technology and not enough about what it means to us. There are some specific words I can use to illustrate that. One is connectedness. The key issue is we are a connected society. This allows people to get more connected. The community building capability of modern technology, particularly social media, is really powerful and we are only just seeing the start of that.

I think it is the symmetrical issue. It is not broadcast, which is one of the challenges we have even now. When you look at some of the current broadband technologies they are particularly one way—the upload is a lot slower than the download. An anecdotal story from Genevieve is that she could not even do banking online at one of the places that supposedly had broadband because it took so long for the keystroke to get up that they cancelled the link before she got the chance to send the next keystroke. In some senses that is a key issue that I do not think is talked about now. Even NBN will not be fully symmetrical. I do not think that is talked about enough. Because it is complex people do not want to talk about it too much, but I think it is one of those conversations we have to have. To overcome the tyranny of distance you need the ability to do both. Sometimes if you try to upload a photo to the internet you will start understanding why two-way is really important.

I think ubiquity is not talked about enough. It is not about getting broadband to people; it is about everybody having it. I think that is the key to the NBN: you are not going to build another divide between citizens because they are not enabled. There are going to be differences between the services. The more we can reduce that difference, the better we will be. I think that is one of the challenges for us moving forward.

At the moment, bandwidth is a constraint to government services and to the private sector. NBN will get us to the stage that it will not be a constraint, so you will be able to do a lot of things that you cannot do because you just hit against that wall or you cannot get that two-way work going. It has to be affordable for all Australians, and I think that is one of our concerns.

Mr STEPHEN JONES —Without wanting to interrupt, do you see any risks to that in South Australia?

Mr Mills —The affordability or the—

Mr STEPHEN JONES —Yes.

Mr Mills —There are always risks. The people who are most disadvantaged will get the most out of the NBN. The challenge is that they will probably be the ones who can least afford it. So I think there is a challenge there. Getting that price to suit everyone’s ability is really important. I also think some of the conversations around a universal service obligation et cetera need to be talked about. The last matter I will talk about is equity. Regardless of the technology used we need to have equity amongst all Australians, regardless of where they live. I suppose the challenge for South Australia is we are probably more regionalised than most other parts of Australia so that is one of the things we tend to concentrate on, working hard with both the Commonwealth government and the NBN Co.

Mr NEVILLE —With regard to Willunga you mentioned that you had 90 per cent take-up rate. Is that 90 per cent who have accepted the boxes to their houses or 90 per cent of those who have actually bought a retail service on the network?

Mr Mills —There are no retail services at Willunga yet. So at this stage it is purely the boxes to the houses.

CHAIR —I want to go to something that is in your report that we have not heard about anywhere else. It goes to our term of reference (h): facilitating community and social benefits. It is something I am particularly passionate about, because I think a lot of the issues for dealing with mental health are exacerbated by isolation and the ability of people to connect to communities, particularly young people. We had evidence that young people will access mental health services online, but they would not even dream of walking through a door of a facility to access them. You have a whole section there on two areas. I would like you to make comment on the arts and culture. For a lot of young people, it is the capacity to have a virtual beam, to actually engage and play with other like-minded people, to create music in different cities, different towns and connect in that way, to create artwork, to share videos and engage with not just young people but those more broadly. Secondly, in your section on the not-for-profit organisations, you refer to the capacity that the NBN provides for them to also up their model to a new form of engagement with communities. I would like you to make some comments for the record on those two areas.

Mr Mills —To go back, those who are most disadvantaged will gain most out of a ubiquitous network. I will take a step back: I think we concentrate a bit too much on the young—

CHAIR —True.

Mr Mills —The fastest growing demography using ICT is the 50-plus. This is really powerful for connectedness of a lot of people who are—

CHAIR —In a way, a new form of grey nomads online?

Mr Mills —Post the grey nomads as well is what we are now seeing. Interestingly, some work has been done by the Centre for Social Innovation in that area. In particular, once people are housebound they build communities, which is keeping them connected and away from that. In a sense, I think the examples are right. It is about the ability to connect people across the issues. Recently on the news, there was a death in the APY Lands. It provided an ability for them to share their grieving. They did an arts projects about that lad and they sold their art to set up some work in the local community. They have an ongoing trophy in his name et cetera. That was enabled by this online facility. If that had not been available, we may or may not have all heard about it in three months time. That is another aspect of the capability.

The not-for-profits are more and more becoming the deliverers of services to the disadvantaged. So, in a sense, the government is in co-production much more with those facilities. The ability for us to make it easier for the government to work with the not-for-profits, in the sense of how we work with them as our service deliverer, and, also, the ability for them to then extend that out into broader areas and make them more efficient and effective will make the dollar go further. Those are the two areas that I think are quite important. To again talk about the issues, I am not sure we know what a lot of those facilities or services will be, because I do not think we have got to the stage of really working through those.

CHAIR —The CSIRO, I think it was, told us about an interesting example concerning rehabilitation for stroke victims by doing exercises in the home. The upload is important because the specialist has to be able to see the timing. They have created a game that a lot of stroke victims play against each other in their homes. They said that the success rate is significantly upped when a community is doing an activity that is social, as well as the straight physical rehabilitation. It struck me that you were talking about a similar sort of thing to do with the added benefit from those things.

Mr Mills —It is interesting—and I am showing my age here—to go back to when the Space Invaders game first came out. The first place it actually had significant usage was as part of rehabilitation in hospitals. The best players of Space Invaders I have met were nurses who used to do it after their shift. They put them in to do that. I think this is the next generation of getting into that. We do not talk much about the usage of certainly the social media and gaming, and I am not really an expert in that area. But I think that, when we start looking at what the youth are doing in gaming, we will see a big growth in that side.

Going back to the training question, converting some of the simulation capability coming from the gaming industry these days into a training medium is quite exciting. I am not sure we are there yet, because we do not have the bandwidth. But it is quite exciting where that could end up.

CHAIR —Thank you for your evidence. As many people on the committee have reflected, it was an extremely useful submission that addressed so many of the criteria very effectively for us. We have now asked for a lot more information and we appreciate your offer to follow up on that for us.

Mr Mills —I hope some notes have been taken of that!

CHAIR —Thank you for your attendance. The additional information you have been asked to provide can be forwarded to the secretary. You will be sent a copy of the transcript of your evidence, to which you can make corrections of grammar and fact.

Proceedings suspended from 4.02 pm to 4.12 pm