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Standing Committee on Infrastructure and Communications
28/04/2011
Role and potential of the National Broadband Network

BURROUGHS, Ms Natalie, Chief Executive Officer, Regional Development Australia Illawarra

McQUEEN, Mr Geoff, Board member, Regional Development Australia Illawarra

SLOAN, Ms Nicky, Project Manager, Regional Development Australia Illawarra

CHAIR: I welcome representatives of RDA Illawarra to today's hearing. Do you have any comments to make on the capacity in which you appear?

Mr McQueen : As well as being a board member of RDA Australia Illawarra, I am head of the ICT subcommittee.

CHAIR: Thank you. Although the committee does not require you to give evidence under oath, I should advise you 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 from you. Do you want to make some opening statements?

Ms Burroughs : RDA has been involved in the NBN rollout from day one when we were up and running as an organisation. We put a submission forward to Minister Conroy early last year outlining the benefits of why the NBN should come to the Illawarra region in particular, and I have a copy of the submission here. We collaborated with the university ICT and councils in bringing forward that submission and trying to sell a story about why we should be one of the first mainland sites for the rollout. Since then we have been lucky enough to get a rollout down at Kiama and Minimurra Downs, and we are very grateful for that. But now we will continue to pursue a rollout for the remainder of the region. That is one of our priorities. Broadband and ICT is one of our eight priorities as an organisation, which Geoff is the chair of. We have been working over the past year with councils and other organisations in trying to work cohesively together and paint a better picture to NBN Co. and to the minister as to why it should come to Shellharbour and the Wollongong area.

More recently, we have met with the councils and we have a structure together about how we would present our case. We have our mapping and our infrastructure sites ready to hand over to them, so we are saying: 'We are ready to go. This is where you can locate your infrastructure. This is where the copper wiring currently exists and where the blind spots and so forth.' We hope that that will enable them to come here more quickly and know that they can do a rollout more speedily than perhaps in other locations.

We are continuing to inform the community about where the rollout is at and what RDA's role is in that regard. Next month as part of our innovation festival we have an event with the CSIRO centre in Sydney. They are coming here to speak to interested participants on the benefits, applications and possibilities of broadband from the point of view not only of downloading movies and getting emails faster but also the broader applications for business and economic development. That is happening next month.

Mr McQueen : I want to speak a little around the submission itself in two parts. In the first part I will provide a little colour to the submission and provide some concrete examples. In the second part I will provide something that you may be heard less frequently by the committee. Rather than beating the drum with 'Gimme, gimme gimme,' I will make some comments about what the Illawarra region has to offer for an NBN rollout in terms of helping to leverage or enable that process. So I will try and keep it brief.

CHAIR: Just for the information of committee members, as a board member could you explain your other roles in life?

Mr McQueen : In my day job I run two ICT companies that employ 16 people in this region. I started them when I first dropped out of university about a decade ago. The university has since got me back and got me to finish an MBA—so my mum is not ashamed anymore. In addition to that, the university has also made me an honorary fellow to help in some of their industry targeted things, specifically around helping some of the projects that Gerard Sutton mentioned earlier as the vice-chancellor, around wanting to drive the innovation ecosystem with a particular focus on start-ups and the economic development benefits that that can create. So I wear many hats.

In terms of the submission, I want to tease out a couple of things that are quite specific and add some colour. The first one is to recognise that this area geographically is a relatively small market. From an economic development perspective, if we are going to grow the base, businesses and industries that need to be here need to be externally or export oriented. This is increasingly happening around things like technology and services, and they are increasingly more global. But, as a consequence, a big enabler of that is broadband and decent quality connectivity. Access to high-speed broadband is no longer a luxury. We used to just need email; now we do video conferences, webinars, video presentations, sharing and a lot more. Personally, in the last couple of months we shipped a product to a global audience and the other week I had to upload a 15-minute You Tube video. It is a key part—

CHAIR: I followed you on Facebook with your frustrations.

Mr McQueen : You did, and I thank you. I share them widely—it took 12 hours to upload a 15 minute video. This video was not just a kitten falling asleep or some gimmick; this was a key piece of our business of promotional structure which enabled us over the weekend to sign up around 250 people—while the rest of us had a long weekend—from countries as far away as Canada, the Caribbean, a whole stack of the United States and even some friends from Macedonia and Lithuania. This is the nature of our business. This is the nature of our economy. This is what is generating income and jobs, and it took 12 hours. I had to go home to upload it so that I would not inconvenience our office staff, and I am on the top tier of broadband you can get in my business without needing to then go and spend thousands and thousands of dollars on installation and thousands and thousands of dollars on ongoing operations each month. Similarly to what Tony said earlier, I could get the same quality of product and in North America or Japan for a couple of hundred bucks. So there is an issue—it is not an imaginary issue—and it is having a real economic consequences, because we need to be putting those sorts of videos up every week, or more frequently, as our product expands and our customers expand.

So that is a bit of the economic background, even for non-technical businesses. Obviously we are a pretty heavy user of this stuff, so you could qualify us as being an outlier and somewhat diminish this, but even for non-technical businesses—I went and got a haircut yesterday, and the new business owner, a really nice guy, is now taking pictures and uploading videos of his work to his Facebook page because his customers want to be able to be seen. It is a really important promotional thing. He is putting deals or specials on Foursquare or maintaining his Google Places profile, where he is able to have his store and his deals and his discounts or, in this case, his salon. These are all essential drivers of business success now and into the future, and they all require internet access and productivity that is greater than what was rolled out off copper when we just needed to send e-mails around.

Another comment made by one of our local businesses—Alan, behind me—was that his business is doing a lot of work in the retail space: they are helping retailers to activate their customers. One of the things they need is for the retailer not just to have a cash register on the till but also to be able to connect that to the Internet, and he needs to always be on broadband to be able to do that. Unfortunately, this local business employing local people is having to go outside the region to find trial users because in this region they just do not have the penetration, even of the broadband that is available right now. That is because it is too difficult and it is complicated through shopping centre environments and other things and because it just was not built to do that job; it was only ever built to give people phone calls.

Getting outside the business area and the dollars and cents and looking at other areas, such as health, education and community benefits, the reality is that the law has a higher-than-average age bracket of population; the bell curve is skewed towards people who quite understandably look at the beautiful environment and want to live here. However, there is a consequence there that it is difficult to deliver the basic medical services that you could deliver in an in-home environment if you had the technology because without the technology you create a tremendous strain on the system. By focusing the NBN on areas such as the Illawarra you could have this low hanging fruit and advantages, particularly around some of the diagnostic and chronic issues that Professor Iverson spoke about before, and that makes this place a pretty high priority in my view.

Another aspect that separates us a little bit is the University of Wollongong. It has a strong reputation. It turns out one in seven IT graduates around the country—it is a big deal. Unfortunately a lot of these people have to leave, even though they have great ideas and opportunities, because in some cases the infrastructure really lets them down. However, if the NBN was here, not only would make it easier for them to take those fledgling first steps in business and opportunities but also give them a competitive advantage and act as a bit of a magnet to draw people in.

I will not speak about it this subject too much, because I note that you have the local government representatives coming this afternoon and that they will do a better job, is that there are some strong aspects around government services and delivery of programs. In particular, I am excited about Kiama council proposal which Chris Quigley will speak about this afternoon. That is something that the RDA has been working on, in conjunction with them, to help shape because of the advantage of having the NBN rolled out at an early release site in that area.

That is our submission recast with a few specific examples and a bit more colour, but what I wanted to do was to tap into something a little bit different—that is, rather than talking about what the NBN can do for us, I would like to talk about what we could do for the NBN. There are two dimensions to this that I think are really valuable. The first one is for the NBN, from a public policy perspective as well as from the NBN Co. perspective, to be able to leverage our readiness here as a region to not only achieve quick wins and some demonstration of capabilities but also be able to learn the lessons that will always have to be learned in any big, ambitious project and be able to learn them quickly and effectively in a way that has dividends for the rest of the country. Here in the region we have had the RDA involved in this process from the very outset, as Natalie identified. We have got all of the councils working together. There are no barriers. There is no infighting. There are no fiefdoms. We all get together. We share maps, we work out logistics, we work out infrastructure. We make it all just work. And it is not just the councils; there is much more than that. It is about the community and the industry being engaged, which we have also been able to work and coordinate to achieve. So in a sense we are ready to go.

Speaking of the businesses as well, we have an internationally focused business community here. We need to be looking outside the beautiful mountain range around us; otherwise, we will just be fighting for scraps. There is some really exciting stuff going on with businesses in information technology, as Tony identified, such as digital services and also mining services and other forms of service delivery, which an NBN can really help with. We are here, but most of these businesses are small to medium enterprises. They are not big banks. They are not operations with 400 staff that go out and buy twin fibre connections because that is what they need. These are organisations that are hitting their heads against the upper bounds of what is available now. But, whether it is the strong Aussie dollar or just the fact that they are at an early stage of their growth, they cannot go out and write the cheques required to spend $10,000 a month on stuff.

Another aspect that makes us ready is a strong sense of community coordination. We are in a geographically constrained environment here. We have got the ocean on one side and the mountains on the other. Do you know what: if you are going to run experiments, if you are going to do stuff and learn from it, this is a pretty good place to do it because you actually have some constraints and some controls that help to bundle, package and get a community behind something so that we can all learn from it.

The other dimension, besides our readiness and being able to leverage that, is that we have the skills accessibility and the demand in this market to add value back to the NBN project. Our region has a strong tradition of blue-collar labour; however, it is no secret that issues like unemployment, particularly amongst our youth, have surfaced because of structural changes over the last few decades. Now, in the midst of a skills shortage in other areas driven by a two-speed economy, there are certainly some great opportunities in rolling out in this area as a priority because we have got the people, we can train them and we can make it happen. That is available and latent. In addition to that, our accessibility from this geographic location to Sydney, with the airport less than an hour away and the CBD not much further, also makes us a really practical, great early release sites. There are certainly going to be a lot of people and smart boffins who are going to be living in Sydney, Melbourne and beyond who need to get on the ground and get involved but who are not going to live on the ground and be involved. Being accessible and affordable, particularly from a time perspective, makes this region particularly viable compared to other areas that are maybe further afield and harder to get to.

Last of all, our region has a high degree of latent demand. We are the 10th largest city in the country, and every city ahead of us has something better than copper available to them as broadband today. We are the tallest dwarf. We do not have that in this city at the moment. There is a latent demand here that maybe has not been found in other areas where take-up has not been as high. The feedback I have had is that the take-up in this area has been quite high. Admittedly, that was in an area that was probably a more residential or sleepy environment than would be in, say, the focus of the Wollongong area. We also have a very high commuter corridor, with 20,000 people a day leaving the city to work. That has tremendous social consequences. It is effectively another half of a full-time job that people spend every week on a train and that they do not spend with their families, exercising or in their community. The ability for the NBN to change that—and meaningfully change that—is quite significant and leads into what I am talking about with this demand profile: there are people willing, able and keen to take this up.

To reiterate, there are a lot of emerging businesses here with a global outlook, particularly in the ICT sector, that are hitting their heads against the limitations of the current infrastructure. That also means that the demand here is latent and I believe quite strongly that it could be activated.

They are the only prepared comments I have. We would love to take any questions that you might have from an industry, RDA or community perspective.

CHAIR: Thank you, Geoff. Ms Sloan, do you have any comments?

Ms Sloan : No. I am happy to answer any questions. We have left it to the chair of our ICT subcommittee.

CHAIR: That is fine. Thank you very much. Obviously, because you as an organisation are to some extent very well known to me, I am going to give some time to my colleagues to ask most of the questions. But I do want to pick up on something. Natalie, you talked about the eight areas of significance for the region's development. Could you identify for us what those are by title and how you see the e-commerce digital economy NBN rollout fitting in with the overall picture of what is needed for the regional development focus.

Ms Burroughs : As I mentioned, we have got broadband and ICT as one of our eight priorities. In addition to that, we have got business growth, tourism, green jobs, social inclusion, major infrastructure—we have got two more.

Mr McQueen : We are a bit burnt out. We spent all of yesterday working.

Ms Burroughs : Leadership is another one. All the NBN stuff falls underneath the broadband ICT and with Geoff chairing it to help drive those projects along. We have a number of e-government projects that we are working on but we are trying to work those up in a limited capacity and environment in terms of the rollout and how it is all happening and access to internet services to make those happen. It all fits under economic development and job creation, which is what we are all about. We need better connectivity. We need business growth to happen more frequently at a higher rate. We need to retain our businesses in the Illawarra and we need to retain our students in the Illawarra as well. They need to be able to work on the latest technologies. Businesses need to be able to compete at the same level that the capital cities can compete in. By having the NBN here, we can be on a level playing field as others.

CHAIR: The NBN does not sit as a separate one of the eight; you see it as an enabler of all the others—is that what you are describing to me?

Ms Burroughs : Yes, that is one way of putting it. Business growth and all those things can happen more easily with having the NBN here.

CHAIR: Geoff, one question for you: one of the things that has been raised with us consistently and it is a glaring thing, particularly as we go around the regions, is that there are some regions that are right onto this. They have been planning for it and are out engaging with it and developing ideas about what they want to do with it and some regions that are struggling. We are looking for some advice to take back to the minister about what the key issues are. The infrastructure is rolling out. We want people to maximise the health, the education, the business, the regional development and growth opportunities. How can be best position regions to do that? From what is obviously vast experience, do you want to give us an idea of what you think might be some critical things that government can be doing to best enable that or things we should not be doing that we are doing that get in the way.

Mr McQueen : For what it is worth, I think the key is to demonstrate practical on the ground use cases and benefits, and those will largely sell themselves to the Australian population. We were one of the fastest countries in the world with uptake of mobile phones. If you try to pitch people a mobile phone that sat in a briefcase that the vet used to take out on a picnic once, people would shake their heads and say, 'Why the hell would I ever need that?' Once people are able to see the benefits and adopt them, it was not so much viral but it was a case of seeing something in use and going, 'Aha. That solves a real problem for me. That is a pain point I need to solve.' In this region I think we are well-equipped and enabled to solve those pain points. My suggestion would be rather than trying to push regions that may be laggards that do not see these things right now and cannot dream the same dreams we do or envisage a future that we can, instead start to create those outcomes then bring them in and say, 'Hey, look at this cool stuff and look at these great opportunities.' Inside each of those different regions and areas where the rollout will occur and maybe there is going to be a higher percentage of laggards. There is still going to be a bunch of people who are leading from the front. There are going to be amazing home based and small businesses that are playing on a world stage that no-one knows about because they do not market to their local neighbourhood. They do not engage with the business chamber and all sorts of things because their customers are very clear and defined and they sell to them online. Those sorts of people will actually start to come forward. That would be my advice: focus on the wins, create those wins or at least the opportunities for them and then evangelise those wins rather than trying to bring everyone along at the same speed.

CHAIR: Who would you see as best doing that? Part of the comments have been that the NBNCo. has not been doing that. Should there be an infrastructure role? Should they be doing that? Where would you, from your experience—either you or Natalie—see the best position for something like that to happen?

Mr McQueen : I think the responsibility is probably shared between NBNCo. and government. There are different messages to communicate. The government's message is around policy. It is around nation building and justifying an expenditure of public funds. I think NBN Co.'s responsibility is around communicating the opportunity of the use cases. Between the two, I think identifying and evangelising those wins as they occur is something that will, I guess, come down to who best has carriage of that. Maybe NBN Co. will say: 'No, we just won't deal with the wires. We don't want to get into that.' So maybe it becomes a government thing.

But I do not feel that either the government or NBN Co. have been doing a poor job of doing this at the moment. I think that would be unfair, because the reality is that we are in a cycle. We are talking about a cycle here where the rollout period is a decade, and for a payback in a use case and the things that we will look back and go, 'Wow, if we didn't have this, this wouldn't have been possible,' we are probably talking about a century. If we liken it to things like rolling out an electricity grid across the country, I figure that it is essential at the moment to make a case for why broadband is an enabler, but to then bring everyone into the tent and bring the laggards up to speed is something that can take the better part of five or 10 years as things get rolled out, as they get lit up, and as we have some wins to really demonstrate.

Ms Burroughs : We have had a couple of meetings with NBN Co. and they are keen to work with us in selling the story better to the region. We are trying to work out how best to do it. We have a number of pre-existing structures and events that they can utilise, and we are working on how best to do that.

Mr SYMON: I will start with either Geoff or Natalie and ask about the first release sites and what the take-up has been. We have heard evidence before from Tasmania, but it was quite a different area from what you just described in Wollongong, with different educational attainments down there. What has the take-up been here that you have heard about so far?

Mr McQueen : The numbers I have heard have been in the seventies. Chris Quigley from Kiama Municipal Council, who will speak this afternoon, is across the detail more clearly than we are in terms of the day to day and how it is progressing. However, the feedback we have had has been broadly positive. As I said, the uptake is in the three-quarters territory.

The nature of the rollout site in Kiama Downs is something that I think is important for the committee to be aware of. It is an area which is predominantly residential. It is an area which has had a history of being very popular as a retirement destination. It is an absolutely beautiful part of the world and was chosen by NBN Co. largely for the ability to have a good cross-section of different use cases, but also it has some ridiculous geography—basalt and sand—and maritime conditions. It is a great place to make sure that, if it works there, it will pretty much work anywhere.

So I think it would be wrong for the committee to read into issues like take-up rates and level of plan adoption and household expenditure per connection, inferred from places like Kiama Downs. To extrapolate those across a wider economy I think would be risky at least and probably foolish, to be honest, because I do not believe that that environment is archetypal of what you will see elsewhere.

Ms Burroughs : It also has quite a few holidaymakers there, and their landlords do not live there, so the take-up rate in terms of accessing and getting information to the landlords has been one of the issues that the council have had to address. They go to the household but it is only the renters there, so they cannot make the decision.

Mr McQueen : Or it is vacant because it is a holiday house.

Mr SYMON: So it was an opt-in decision and landlords did not necessarily send the paperwork back? This is what we heard in Tasmania.

Ms Burroughs : Yes, I have heard that that has been an issue for Kiama council. So when we have been working with the other councils in conjunction with Kiama we have raised that, about how to best tap into all the landlords. Maybe you write to them—to the ratepayer—rather than to the household itself.

Mr McQueen : The council have all that information as part of their core business, and that is part of the work that we have been doing at RDA. It has been getting the ducks lined up and saying to everyone who is a stakeholder in the different LGAs, 'Are you happy to effectively work and send something on behalf of NBN Co. to the households to make sure that they're aware of this and have the opportunity to opt in?' It is not handing over that information in any way, shape or form; it is really about smoothing a path to helping people to make an informed decision.

Mr SYMON: Were there any businesses at all in that area, or is it totally residential?

Mr McQueen : There are some. There is one in particular called Haworth Guitars, which is actually a really great success story. It had all the beginnings of a lifestyle business—someone who loved guitars and surfing and decided that that was the best place in the world to live—and it is now selling products all over the world and just smashing out of the park, winning awards left, right and centre. That is an example of a business that is in that particular area, but it is a predominantly residential environment.

Mr SYMON: There was another question I wanted to ask. Natalie, you mentioned mapping infrastructure you currently have in preparation for the NBN rollout. What has that involved? What have you found out from that about what is already here? With that process have you identified pathways for fibres or cables to be put in? Are there places where you may not need things? Has it gone down to that level?

Ms Burroughs : We have had a meeting with NBN Co. when they needed to connect Kiama to Wollongong through the big FAN site that was there. So they have identified the big structure that has to go from south to north to do that. In terms of identifying the infrastructure, it has mainly been about what is existing and the potential sites where they can put new infrastructure in that might not meet the kilometre radius that they need—the certain distance apart.

Mr McQueen : That last point is really important because when it comes to under the ground, particularly with the heads of agreement struck between NBN Co. and Telstra, Telstra knows where that stuff is better than we or the council will. What is important is that it has to pop up above ground and you need to have your FAN sites. In our case, we have gotten together with the three LGAs and we have helped to identify operational lands that could be used as FAN sites. We have then worked out what appropriate DA processes would need to be in place to execute a rollout with as minimum of fuss as possible.

Certainly, a lot of the infrastructure involved in the NBN is covered by the Telecommunications Act so it is not really a council determining authority on many of the things, but there are aspects that are. I guess NBN Co. were coming up against some of those when we talked to them. We came back to them and said: 'Here's a map. Here is all of the operational land that we could look at for some form of leasehold arrangement that theoretically would be able to make this really easy for you.'

Mr SYMON: Again, to make yourself more attractive for the next stage?

Mr McQueen : Pretty much.

Ms Burroughs : Also, to identify dedicated community engagement officers to help with selling the story a bit better. You are not going to have your front yard necessarily ripped up and left disarray. I understand that no driveway has been lifted up in Kiama; they have been able to do it all underneath. We need to sell that story to people because they are not aware of it. They have these preconceived ideas about what it might be and we need people to distil those ideas.

Mrs PRENTICE: So when you were commenting before about the opt-in, would you therefore be supporters of the opt-out?

Mr McQueen : Not on behalf of RDA. We are apolitical, so issues of policy like that are—

CHAIR: It is not a political issue, but it is not something that you would have probably discussed.

Mr McQueen : We have not covered it or come to any conclusions as a board but, personally, opt-out makes a lot of sense. This is a piece of infrastructure that is designed to be attached and operational in premises beyond, frankly, the life expectancy of the current occupants. In my view, it makes sense to treat it as a piece of utility infrastructure—much as you would have considered sewers and power lines back in the day when towns were being sewered and power lines were being put in. Opt-out, for people who are passionately focused in that direction, makes sense. There are private property rights and I do not think anyone should trample those, but given people's busy lifestyles, general apathy, absent landlords or holiday houses, and the fact that they are most likely not going to own those in a 100 year's time, I think opt-out makes a lot of sense.

Mrs PRENTICE: You also identified in your submission about how it will increase home business opportunities. Do you know how many home businesses you have in the area—a guesstimate?

Mr McQueen : It is hard because of the collection process for those—a lot of them fly under the radar—but I might hand over to Natalie to talk about a program that the RDA has been running for a while now, which is the Economic Gardening program.

Ms Burroughs : It has a lot of home based businesses in that. We have a relatively high rate of home based businesses, but their level of success is similar to what other home based businesses and small businesses experience across the country. They are perhaps a little bit worse off because of the level of connectivity and the level of competitiveness that they are able to operate their businesses at, such as exporting and selling locally and nationally. By having the rollout here it will put them on a level playing field with others.

Mrs PRENTICE: And I am sure there will be fluctuation depending on the exchange rates. I just wondered if you had any idea of the numbers?

Ms Burroughs : No, but we can get back to you on that.

Mrs PRENTICE: That would be great, thank you.

CHAIR: Perhaps the current census that is underway might help us.

Mr STEPHEN JONES: Sixty-seven per cent.

Mrs PRENTICE: Sixty-seven per cent of the community have home businesses?

Mr STEPHEN JONES: Sixty-seven per cent of businesses in the Illawarra region are home based.

Mrs PRENTICE: Do have a breakdown of the type of businesses?

CHAIR: We can probably get that information through but, as Mr Jones indicated, that includes what we call a tradie—someone operating their plumbing business and so forth.

Mr STEPHEN JONES: Mr McQueen, you mentioned in your opening statement some of the challenges that the region faces, particularly unemployment, which is stubbornly two percent above the national average, with pockets of high unemployment in some suburbs, high youth unemployment in some suburbs and some troubles with retention rates. Against this background, why does the RDA say that NBN is a significant move-ahead option for tackling those issues in the region?

Mr McQueen : There are two dimensions to that. There is the pull dimension of a major infrastructure project going on, with easy access to labour, with a training regime that would not be beyond someone who is currently unskilled and looking for work. They would be able to get involved in the rollout process. From my point of view, in terms of an action point, that is pretty exciting, because not only does it provide a pathway into the labour force for something that is going to be a 10-year long rollout, and the opportunity to keep developing those skills over time, but it also, from a practical perspective, is pretty appealing, I would suggest, to decision makers in Canberra and in Melbourne, because you can go and hire people and train them and make this stuff happen. It is not a theoretical exercise.

In terms of the dividends or the benefits for those people who are currently in those situations or in those environments, from my perspective one of the great opportunities that things like the NBN can provide is a relatively easy way to get a self-employed or self-determined path into the workforce. There are simple things like, if you are into Matchbox cars and you set up an eBay store, it is pretty user-friendly to do and all of a sudden you can actually start to be doing something, making some money and learning those life principles, where maybe you fell through the net back in the day and it has always been a bit of an uphill battle.

They are some of the things that I see as being an appealing benefit. Obviously some of these problems are significant problems that no silver bullet will solve, but I see that having the NBN provides opportunities that otherwise would be harder to achieve than they are now.

Ms Burroughs : There are the business opportunities but there are also the social opportunities. A lot of those people are isolated and disengaged from the community. By having access to something like this, they can be better engaged in community activities and what is going on around them, and it is overall better for their self-esteem.

Mr STEPHEN JONES: We have heard a number of witnesses this morning talk about their own particular suburbs and problems they have with the existing access to broadband. Are you able, from the RDA perspective, to give us a bit of an overview of where there is poor access?

Mr McQueen : This is probably anecdotal rather than an RDA perspective, just because we do not have the resources to map that, but, yes, basically with the current technology any time you get more than three kilometres length of copper from an exchange you are done; that is it; you are back to dial-up. If you are in one of the many housing estates in Shellharbour, in your electorate, which were deployed using things like pair gain or RIM technology—a quite sensible approach at the time to be able to get connections to people's homes—ADSL is not a possibility or, when it becomes a possibility, it is because of a small device which is only able to be installed in that RIM by one carrier, so then you are basically stuck in a bit of a painful position without really good opportunities for wholesale.

So there are problems around Shellharbour and Barrack Heights. There are problems around Figtree because of the distances involved from the exchange. I believe there are similar problems around some of our northern suburbs where the exchange is put in and the suburbs are quite skinny because of the small distance between the mountains and the ocean. The fact that the suburbs are so long means that they get over that three kilometre mark pretty easily.

CHAIR: And the geography makes wireless less than optimal.

Mr McQueen : Yes. That is true. It does not go round mountains. The wireless option, particularly just using market based forces as we have now, is broadly unsatisfactory. I sat in the corner over there and I could not get 3G access.

CHAIR: There are some frustrated people sitting here!

Mr McQueen : From home, I have to be careful that I do not walk from one side of the house to the other.

Mr STEPHEN JONES: It may frustrate you to know that my access is not too bad over here.

Mr McQueen : That is good. You are closer to the windows! That is why I was getting to those points of latent demand. I think there really are those strong latent demands. I know a guy who went out and spent five grand on a kit so he could rig something from the roof of his house so that he could see line of sight down the hill to his office so he could use his internet at home.

Mr STEPHEN JONES: This is my final question. I asked Professor Sutton this and he handballed it to you guys. We are one of the largest producers of ICT graduates in the country and certainly the largest in New South Wales. What do you see as the role of NBN in helping us to retain those ICT graduates in the region?

Mr McQueen : It is a really good question because we have over 1,000 really capable, well-trained, internationally-orientated graduates coming out of this institution every single year, and we manage to retain a small percentage of them in the region. Most of them leave. Either there are not the jobs or there is not the infrastructure to support them in developing their own entrepreneurial activities and employing their colleagues. In terms of what we are doing about that, the NBN plays an important part because the NBN provides an affordable, high-quality, globally-competitive piece of infrastructure to allow those externally-orientated, export-focused businesses in the ICT sector in particular to get on with what they do.

I spend a lot of time in San Francisco and whenever I am there it always just amazes me how, for 60 bucks a month, you have got yourself no download limits. They tried to introduce 250 gig download limits and there was uproar. The connection speeds are blindingly fast by comparison. That is because of an infrastructure history—the way that that place has come together—that we just do not have here, and that makes it more difficult for us to just do the basic stuff like load webpages and work and transmit files and upload videos that we need for work.

CHAIR: Some of our export-focused industries beyond that—and I know the RDA has experience in finance and education—would face similar competition internationally, would they?

Mr McQueen : Yes. And the competition dimension is important because we are now dealing with a very appreciating currency. So we are just getting it from all sides. We have connection speeds that are a hundredth of what our competitors have. Price is an issue but it is not the only issue. This is about an investment and an enablement. But, yes, basically we are getting the wrong end of the stick on a few different things that make life really hard.

Mr STEPHEN JONES: It is like: if you had spent three years learning to surf you would not go and live in Alice Springs, would you?

Mr McQueen : Exactly. And the other dimension to making it accessible is the soft or social dimension—trying to engage with the student population in particular around those issues of economic development and entrepreneurship and give them a reason to stay. They have plenty of reasons to stay. We just need to give them a couple more that make sure they can get dinner tomorrow night.

Mr FLETCHER: You mentioned in your submission that there was strong support for expanding the rollout. Have you done any surveys that give quantitative backup for that?

Ms Burroughs : Yes. We ran a comprehensive consultation process as part of developing our regional plan. We ran a number of workshops across the region. Also held our first regional leaders summit, where it was mentioned, and broadband was the top priority as voted at the summit. Everyone wants it.

Mr FLETCHER: So what was the total number of people who responded?

CHAIR: Just give us a quick idea of what the summit was—who was there, who was expressing a view.

Ms Burroughs : The summit was only one of the tools. We did an online survey as well that helped feed into the regional plan. At the summit we had all the major players—all the councils and the university. All the peak players within the community were there. They all voted and put it as their top priority. There were over 250 people there.

Mr FLETCHER: And the online survey?

Ms Burroughs : In the online survey we got, I think, over 100 people responding. That was in addition to running the workshops across the region.

Mr FLETCHER: But has there been bottom-up survey—

CHAIR: It is called the election!

Mr FLETCHER: that goes to everybody in the region?

Ms Burroughs : No. We have not done one specifically on broadband, no.

Mr FLETCHER: Was that the New South Wales election, Madam Chair?

CHAIR: No. It was the Federal election where this was the issue.

Mr HUSIC: It is like watching political tennis!

Mr FLETCHER: You talk about the concerns about slow and unreliable internet access affecting large parts of the Illawarra, and obviously patchy broadband access is a problem that is widely shared. I am just wanting to understand: are you putting to us a specific proposition as to the speed or the technology that is required to solve that?

Mr McQueen : From a technology and a speed perspective, we would be looking for something that was an order of magnitude better than what we can get today, and that puts us into the 100 megabit-plus territory. That is the headroom we are punching against at the moment.

Mr FLETCHER: What you mean by the headroom we are punching against?

Mr McQueen : It takes me 12 hours to upload a 15-minute video. That is part and parcel of what we have to do. That is a painful constraint. What we would be looking at from a comparative perspective is something around that 100 megs a second territory or above as an expectation of where we should be trying to pitch this sort of thing.

Mr FLETCHER: Just explain to me how you have arrived at 100 megabits as what you think the speed target should be.

Mr McQueen : If it takes me an hour I am kind of comfortable with that because it is about four times the length of the footage. If it takes me less, great. I guess I am putting a bit of a pragmatic line around it that other places I go and other things I see are in that order of magnitude greater than what we experience here, particularly from the synchronicity point of view, and that is really important as well. The only technology we have here is ADSL, and asynchronous means that uploads in particular are really horrible.

Mr FLETCHER: There is a synchronous version of ADSL, isn't there?

Mr McQueen : Not at the speeds we need to be. The synchronous version tops out at around 512 kilobits per second. It is far superior to the ADSL 2+ technology you can get for the download speeds. Unfortunately, noise in phone lines makes it impossible to actually synchronise that back up to the speeds we need.

Mr FLETCHER: Part of the issue you have identified is that there are quite a few people who just cannot get broadband at all right now. Is that right?

Mr McQueen : There are two issues. There are the people who cannot get broadband now, which is a quirk of the technology that we have as our best solution. There is also the issue that those who can get the best solution possible today are hitting constraints against it because it is running off a platform that was never designed to do that job. It is amazing that it even does what it does now.

Mr FLETCHER: Would you agree that there are separate dimensions to this problem, in other words speed is one and ubiquity, uniformity and reliability are other dimensions?

Mr McQueen : Yes, it is a complex discussion and a complex debate about the right solution. Certainly there are very many dimensions to it. The ones I think are the most important are to make sure we are setting a platform which is able to grow and is able to scale, because we do not know what our requirements are going to be in 30 or 40 years. So part of that is about picking a solution which has a track record of continually being able to scale and part of it is about then being able to do those things right now as well.

Mr FLETCHER: Would you also agree that there are solutions available which could address, for example, the ubiquity and uniformity issues and could deliver higher speed but do not involve fibre all the way to the home?

Mr McQueen : No, I do not believe that, based on my knowledge of the technology that is available right now.

Mr FLETCHER: So you do not believe that a fibre to the node rollout as one alternative would achieve ubiquity and higher speed but would not involve fibre all the way to the home?

Mr McQueen : I do not believe so. You are still going to have that copper component for the last mile, and it is always the last mile that hurts. There is fibre running all over the country to exchanges but it is that last mile that is the key, and that is the area where we would half do it with fibre to the node.

Mr FLETCHER: Let me understand that. Are you putting to us that fibre to the node does not achieve ubiquity?

Mr McQueen : No, I am putting to you that fibre to the node continues to put constraints and headroom caps on the capacity.

Mr FLETCHER: Okay. I am just trying to understand where you are coming from. Your fundamental objection to fibre to the node is that it is slower. Is that right?

Mr McQueen : Not only is it slower but it also limits our ability to increase speeds in the future.

Mr FLETCHER: Why would it not be possible at some point in the future if the demand were established to then continue the fibre rollout all the way?

Mr McQueen : Theoretically if you want to do it as a two-stage process and tear up all the copper at some point in the future when you spend all the money going around and running of most of the way there, you could.

Mr FLETCHER: You mentioned that there are a number of the states that do not have DSL because of pair gain systems.

Mr McQueen : And RIMs in particular.

Mr FLETCHER: Do you think it would be possible to do things in the interim before the NBN is built out which could provide a quick-fix solution so that some of those homes could get DSLs which today cannot get them?

Mr McQueen : Those things are underway and are in place. The technology exists, and it has been rolled out to many of those places. The issue is that, when that happens, instead of having a telephone exchange with all the room for the cabinets and the way that ADSL is currently delivered—where you have, effectively, a built-in competition arrangement—in that environment you are dealing with a pillar on the end of the street. There is not much space or elbow room, so you end up with one-carrier solutions.

Mr FLETCHER: Right. So you do not like the idea of a one-carrier network?

Mr McQueen : I like the idea of a one-carrier network; I do not like the idea of a one-carrier retailer. I like being able to pick and choose and buy the bundle of services that suits my business, and I know that someone who wants to play games all the time is going to pay for a different class of service as a retailer than I would.

Mr FLETCHER: Are you comfortable with the notion that it will now be illegal to build a competing network to deliver services in competition with NBN?

Mr McQueen : Personally I do not have much of an opinion on that. It seems to me that that is really about the argy-bargy, I guess, in negotiations between a large incumbent provider and other parties. From my perspective, it is that sort of thing over there—I do not really have an opinion either way on that. Certainly, from an RDA perspective, we do not have an opinion.

CHAIR: We need to move on. Mr Husic.

Mr HUSIC: Thanks, Chair. I just want to ask two questions. Firstly, you mentioned the suburbs that simply do not have access to broadband at the moment. Can you give us a headcount for that? How many people and how many households within the region would not have access to broadband?

Mr McQueen : We would have to get back to you on that.

Mr HUSIC: Okay. The next issue is: in your submission and some of the comments you have made today, particularly that the region is very much aware, from an economic and outward-looking perspective, that a lot of its income is generated from outside the region, particularly on an export basis. We have been able to identify things like the number of home businesses that operate here, the number of ICT graduates per annum generated here. Some of the other figures that were startling were that 20,000 people in the region leave the region every day for work. Has the RDA been able to do any other economic work to start doing the maths or generating the statistics on what the NBN would mean to the region's economy; and, if so, has it been able to identify from that, for instance, what sectors in particular would benefit within the region by having a reliable network that does not have, I think you are saying, speeds that are one-100th of what other regions or parts of the world are experiencing?

Mr McQueen : We have not done any work at that level of things.

Ms Burroughs : We spoke about that at our planning day yesterday and we are going to be working with the university on the input-output model that they have developed and that we have helped fund, to get that sort of information.

Mr HUSIC: Excellent. When that work is at a more advanced stage, would you be able to provide some information on that? That seems to be a thing that we are coming across quite regularly in terms of other RDAs or other regions: how do they start scoping out what this actually means from an economic perspective?

CHAIR: Perhaps when you have written up a preliminary proposal from the planning day you could provide that to us.

Ms Burroughs : Sure.

Mr HUSIC: Yes, something that you feel comfortable releasing, obviously. At this point, do you have any idea of what sectors you believe will benefit most within the region?

Mr McQueen : This is totally subjective, but I think it is going to be predominantly the services sector that will benefit a lot, as well as some of the manufacturing-operational areas. But I think it will be the services sector, which is very broad and an increasingly important part of our economy.

CHAIR: Do you want to give the example of the stock exchange that runs locally?

Mr McQueen : Yes. I am not as familiar with that example, but some of the examples I am familiar with are things like engineering design outfits that are doing work from here, generating income and employing people here. Their customers are all over the place—in the Pilbara, in Queensland and internationally. They are having to ship a lot of big files around and they are having to do a lot of design work. They are constrained in a way that they would not be if they were in Surry Hills, Randwick or any other parts of Sydney, or Melbourne, the Gold Coast, Brisbane, Geelong, Newcastle, Perth or Adelaide, that happen to have coaxial cable running past them already that can do speeds in excess of 100. So I think that it is a little bit too fuzzy to identify some of those components, but I know that it hurts them and it hurts them a lot. They have just gritted their teeth and borne it until now.

Mrs PRENTICE: Geoff, you mentioned that it takes 12 hours to upload a 15-minute video. Have you tried doing that in the trial area to see how long it takes?

Mr McQueen : No, I have not.

CHAIR: It is not retail.

Mr McQueen : It is not ready yet. I tell you what: I will be in San Francisco next week and I will send you an email with a time stamp of how long it took me to upload it. Then we have got a benchmark.

CHAIR: Thank you very much. You have given us tremendous information. There are some areas I did want to have a look at, including the social inclusion aspect, but we might explore those with the councils. One of the big issues that has been raised with us is the capacity for people who are isolated, either by geography or social circumstances, to deal with mental illness, age or infirmity. You will be very pleased to hear that I went to a new social housing development in Fairy Meadow a couple of weeks ago. There was a lady in her 70s who was very proud to show me her new unit. As we walked in the door she said, 'That is just my computer and Skype running; it's how I stay in contact with my friends in the US.' It was pointed out to me at some of the hearings that we should not presume that this is only a technology and service for the young—that in fact it is becoming a very important connection for many of our aged in the community as well. She did then express her frustration with how the Skype was running!

Mr McQueen : Pretty patchy.

CHAIR: Very patchy is a fair assessment. We very much appreciate the time of all of you today, particularly given that you spent all day yesterday planning. Geoff, we are probably lucky to have you in the country at the moment—it is always a trick to get you in the one spot, so thank you for that. Please forward the additional information you have undertaken to provide us to the secretary of the committee. You will be sent a copy of the transcript of your evidence, to which you can make corrections of grammar and fact, and that will also help guide you on the additional information you have undertaken to provide us. Thank you once again for some really interesting, useful information. We will now suspend proceedings for the lunch break.

Proceeding s suspended from 13 : 02 to 13 : 45