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Role and potential of the National Broadband Network

CHAIR —I now welcome the representative from the Willunga Business and Tourism Association. 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 do not have a written submission from you. Would you like to make some opening comments?

Mr Laing —Do you want a copy of my statement?

CHAIR —You can table it, but do you want to just address the main points? Then you can submit it and we will take it as evidence.

Mr Laing —Okay, thanks. Thank you for the opportunity of being here today. The invitation came out of the blue. It was a bit of a surprise, so bear with me. The Willunga Business and Tourism Association, WBTA, represents a range of business and community interests in the Willunga region. Members are primarily small business owners, consisting of sole traders, partnerships, private companies and representatives of community organisations and associations which are primarily focused on doing business in Willunga and its environs. We also have a few individual members who support the aims of the association.

The WBTA is aware of the many benefits that can result from general access to high-speed broadband in all areas covered by this inquiry. These include economic growth, quality jobs, energy, environment, health care, K to 12 education, public safety, distance learning, digital literacy, rural communities and access to broadband, enabling people with disabilities to connect with their communities, libraries and free access to information, and senior citizens and their concerns about information security and safety.

We believe that the key issues will be costs, accessibility, inclusivity and applications available now and those yet to be developed. However, at the moment, it is all a bit ho-hum for Willunga businesses and residents and is travelling slowly. To begin: the laying of a cable, which commenced last year, through the streets of Willunga is almost complete. The connections from street to house have begun and are intended to gather momentum in the coming months. Over 84 per cent of people in Willunga signed up for the free connection. There is an issue of those businesses and residents just outside the designated NBN area who are missing out on being part of the early connection. It was a failure to recognise the communities of interest that exist in rural communities and extend beyond the town boundaries on a map. The cable passes by their properties but they are not allowed to connect and participate in this early rollout.

In recent months, Willunga has been increasingly the subject of various studies trying to establish a benchmark of where we are with the internet and our current use: gaming, websites, email, Skype, social networking, iPhone apps, education, videos et cetera. Collaborative education and training initiatives involving local business and their engagement with the World Wide Web are being progressed as I speak. There is much interest in developing case studies to monitor what is changing in business as they take up the opportunities presented by broadband—from establishing a web presence, developing online markets and implementing e-commerce strategies to developing online collaborative activities and improving productivity using cloud applications.

The trouble is that NBN is at a very early stage and we do not know what we do not know, to follow on from what Pip said. The retail service providers have yet to make their offers known; cost and pricing models are unknown. What current applications will be taken up by businesses in Willunga? It will take six to eight years for the NBN to be country wide. What jobs will be created? What applications will be developed in that time? What can we expect from 100-megabit-per-second services? Will businesses be able to access and utilise such speeds? We have got it, but our clients and customers in the rest of the country struggle on slower speeds while we develop and use content-rich applications which they can hardly access.

The ability to effortlessly move huge amounts of data around the world will prove a boon for gamers, and there is an active group of gamers in Willunga, and a financial challenge for households with active internet and iPod connections. If the current pricing models based on data consumption continue businesses, like households, will be challenged in making decisions on how much to invest, what technology to employ and what services to use. Affordability and access will be issues. We should be concerned about not developing a digital divide between the haves and the have-nots early in the life of the NBN.

The government clearly has a goal to maximise the potential of the National Broadband Network. In order to achieve this, it must establish the protocols to ensure equality of access and fair pricing for all in the dissemination of information in the digital age. Thank you again for the opportunity to make this submission.

CHAIR —Thank you, Tom. Perhaps some of your words of caution can go to all of those other places that are desperately saying, ‘Why weren’t we a first rollout site?’ I certainly take the points that you have made to us.

One of the really interesting things in what you are talking about is that a part of the trial sites is working out what things we need to do better in communities so that they can look for and prepare for the opportunities of the rollout of this sort of infrastructure. Certainly a lot of the evidence we got in Scottsdale when we were there was about the importance of that preparation and also of developing strategies so that the utilisation of it can happen in meaningful ways. Would you talk to us, from the point of view of your association, about what you have seen happen and what you think might be done better in order to help businesses develop strategies and participate?

Mr Laing —It has to be qualified. NBN is about the physical infrastructure and we have experienced minimal disruption with the NBN rollout. They are putting in their horizontal drills and so forth. It was brilliantly done because of the minimal disruption. One of the members made a comment that it took them a month in her street to put in the cable, so they obviously experienced some difficulties. That is where we have been. It has been about physical infrastructure and the next stage is still physical. It is running past my house but it is not yet connected. I think they have done some trials of the connections in other parts of Willunga but the full rollout of that will happen over the next couple of months. It is very early days in terms of the applications that businesses are going to use the broadband for.

I am a new chum to Willunga. I have been there for two years and I have been secretary of the WBTA for almost two years. Having come from a background of distance education where telephone, Skype, online courses and all that was what we were doing I have gone back to a situation where people are very slow to respond to emails in this day and age of connectivity. Even within Willunga people have trouble with dial up and their connectivity through mobile USB ports where it is almost a dial-up connection. I have two teenage boys who now burn through 50 gigabytes just like that and you get the Telstra slowdown to a dial-up situation which is really frustrating.

We can move on and talk about the applications that are being put up. We have a developer in McLaren Vale Mark Potter who has done an iPhone app for tourism. The uptake of that in Willunga has been very slow. People are not knocking on his door and saying, ‘Yes, yes, please.’ It is, ‘We’ll wait and see.’ That is very much were people are at because, as I said earlier, we do not know what we do not know. I am very familiar with and open to Gmail, Google, cloud applications and the use of that technology. I talk to people about doing banking and accounting online and when I tell them it is not necessary to have it on your PC in front of you they say, ‘What? Where’s that?’ That came out of New Zealand and it is all sitting there waiting for the uptake.

CHAIR —So am I hearing from you that there is a level of digital literacy that is a huge problem?

Mr Laing —There is a huge problem with digital literacy. Part of it is age related, part of it is, ‘I’ve got my website and the website’s doing it,’ and part of it is that people are sole traders and really do not understand the limitations when they want to email their newsletter to 600 people, how to go about doing that and what application they need. They say ‘I am trying to send my newsletter as a pdf and it is taking hours.’ ‘How big is your pdf?’ ‘Oh, two megabytes.’ ‘What is your connection?’ ‘Oh, well.’ All of those issues that govern people’s hesitancy.

CHAIR —Is there anybody with the presence in the community now, if you like, a digital champion, somebody who is actually able to engage with community from either the business sector, the community sector, the volunteer sector, or whoever it may be and talk to them about these issues and the sorts of things that they—

Mr Laing —I would have to put my own hand up.

CHAIR —So you are doing it in your role with the association?

Mr Laing —Yes, as a secretary. But there are people in the community; there are 35 in the gamers’ world. These guys are switched on to playing games online around the world.

CHAIR —I am just thinking of what Pip was saying before about of the winemaker who did a presentation, and suddenly a whole lot of non-technical people looked up and said, ‘So this is what this is about.’ So you are the one trying to do that yourself in the community. Do you think government could support or help that happen in better ways?

Mr Laing —I think so. We are in discussions with the Southern Success Business Enterprise Centre on some money that the state government has made available to basically generate some case studies on businesses taking up the broadband, and we will be having a discussion on Thursday to flesh out a little bit more what that will look like. There is a desperate need, from my point of view as an advocate for broadband and what that connectivity does both nationally and internationally, to lift people’s games and their sights as to what they can do across the range of things—the business marketing and the supply chain management through to the administration of their business and understanding what their business is really about and getting a handle on that. But I am very much a lone voice in this small community, where NBN is still about the physical infrastructure and not yet about the applications.

People have said, ‘I want to go to work three days a week and work at home for the other two days of week,’ and I am thinking: ‘Why aren’t you doing that now? With a little bit of thought about what applications are available, you can do that now.’ I was talking to one of the business owners this morning, and he said, ‘We had some software a couple of years ago where I could ring up the tech guy and he could do it remotely and so forth—he went bankrupt and we had to put in some new software—but the new tech guy is saying he can’t do that.’ So there are some real issues about people’s understanding of the technology, of the applications and of what is currently available and how they access it. Then, of course, you have to deal with their own ability in terms of managing their business, managing their staff—managing all that. I know one who has six employees, but it is really a struggle for her to come to terms with the technology and how it works.

CHAIR —It is interesting, Tom, that we had evidence in Ballarat and one of the champions out there said: ‘The point is, you’ve got to go out and engage with businesses about the outcomes. Don’t talk to them about the technology—that’s the bit they don’t need to understand, and they find it daunting—just talk to them about what they want to do and how you can get them to the point where they can do that.’ It sounds to me like you are endorsing that view.

Mr Laing —I do, but you also have to be conscious that, as I said there, businesses are going to be challenged with what the investment is that they are able to make financially and what the likely return is. Many businesses are not switched on enough to be able to answer that question. They are running on a cash flow basis, not on a profit-and-loss and balance-sheet basis in terms of managing their business, and that makes it frightening for them when someone goes in and says, ‘You need to buy some software’ or ‘You need to upgrade your technology, and you’re looking at an investment of $10,000 or $15,000 to do that.’ They say, ‘What? I haven’t got that.’

CHAIR —And ‘I don’t quite understand why I would want to do that.’

Mr Laing —Yes. If they want to go into a new market—if they want to go online and get into e-commerce—that is a daunting exercise, and they need a hand to be taken through developing a catalogue and then being able to put that online. They will need to employ someone to do that, and they are already struggling with employing people and using accountants and book-keepers who do not necessarily do the right thing by them. They are cautious about getting their fingers burned.

CHAIR —Understandably, yes.

Mr NEVILLE —Tom, what is the population of Willunga?

Mr Laing —Roughly 2,000.

Mr NEVILLE —What local authority is it in?

Mr Laing —It is under Onkaparinga. It used to be Willunga, but in 1997 or 1998 it amalgamated with Onkaparinga council.

Mr NEVILLE —How many members do you have in your association?

Mr Laing —Currently we have 55, and that is about half of what we should realistically have. It went through a difficult time five years ago.

Mr NEVILLE —That is the business community of Willunga?

Mr Laing —Business and tourism.

Mr NEVILLE —And do you have your own website for tourism?

Mr Laing —No, not for tourism necessarily. We have what is very much a brochure website. Behind the scenes I am using Google and have developed a website for the WBTA to keep members informed—

Mr NEVILLE —We are having a look here.

Mr Laing —and that is partially public if you have a link to that website. But the WBTA’s website is basically a brochure website.

Mr NEVILLE —Put it this way: how do you feel you can maximise the acceptance of high-speed broadband in the area?

Mr Laing —Once again, I would refer to what I said in my opening remarks. It is going to be about price. I read a statement today, which you were presented with yesterday, that said there is a $20 per megabyte penalty or cost to the provider, and he has to shift that onto his consumers.

CHAIR —That is the potential cost.

Mr Laing —Yes, the potential cost. I have experienced it with my boys. We got an iPod Touch six months ago. We went from a 12 gigabyte plan, before the iPod touch, and immediately the use doubled, then his friends came in and the use doubled again. We have just had a month where we almost went up to 50 gigabytes. He was totally unconscious of the amount of data that his iPod was chewing through just by watching YouTube videos and going to a few websites and downloading a few bits of information that he wanted. That is going to be the real challenge. We have 100 megabytes of cable going past our house. The retail service providers have yet to come forward with what they are offering and what their charge is going to be. We would like to be able to access those 100 megabytes.

I have my 92-year-old mum sitting out the back who is not internet friendly at all, but if she had a Skype phone then it would not be a matter of me necessarily being here because there is a whole range of things that can be added on to that Skype phone in terms of monitoring and taking care of her. Japan has the box where they come into your house and they are able to do the scan, the blood test, the whole range of things. If they came in now, they would be working with the 1,500 limit that Telstra puts on our broadband. If they come in when the NBN is up and there is 100 megabytes, are they going to be able to access that or is it still going to go through the current mobile technology, which is developing an 8,000 kilobytes speed? That is the challenge. Someone has to create a level playing field and say, ‘Look, we are in the information age, we’re in the digital age,’ and people, households, businesses, to really build their productivity and a whole range of other things—I use ‘productivity’ in a business sense—need to be able to access that pretty much without limitation. Give us 20 or 25 or 30, that would be great, and then start to hive off the others.

I have worked in education. I downloaded the Google desktop onto my PC at work and the tech guys came over and said, ‘Your usage has just skyrocketed.’ because that is all push technology; rather than me pulling it, it is just coming down. That is the concern about the pricing and the speed at which it all happens, and it will need to change. Certainly that is my opinion, and I think it is also others.

Mr NEVILLE —You said ‘84 per cent’—that is homes and businesses I assume.

Mr Laing —Yes. It is probably higher than that because that is an old figure.

Mr NEVILLE —But not less than 84.

Mr Laing —No.

Mr NEVILLE —Because that is higher than Tasmania.

Mr Laing —We know.

Mr NEVILLE —Do you know the percentage that is likely to sign up to one of the retailers at this stage?

Mr Laing —No. The common thought is: ‘NBN is making it free to connect to the house. If I don’t do it, I’m going to have to pay later. I may not use it as it all depends on what the retail service provider is going to say and what he offers as to whether I take it up. But at least it’s there.’

CHAIR —Can I just clarify? One of the things that was raised with us in Tasmania was that the existing retail service providers did a very aggressive marketing campaign prior to retail products being available on the NBN to sign people up for two-year contracts. So part of the reason the actual retail uptake was below 20 per cent was that people were already locked into two-year contracts on existing deals and they were clearly not aware that there might be a new range of products available once the thing was lit up. Have you seen that sort of thing happening, because you are back at the point they would have been at? Are you aware of that happening?

Mr Laing —No, I am not aware of that.

CHAIR —It might be interesting for the association to perhaps talk to the association there and put an alert out for people to be conscious of this. There was frustration amongst many of them that they had signed up for these two-year contracts.

Mr NEVILLE —And they were stuck with them. In a way it was predatory. It was meant to slow down the NBN; it was as simple as that. Based on the Tasmanian experience, was there reluctance among people who had businesses, particularly landlords, to take the connection box? In Tasmania one of the problems was that some businesses wanted the connection but the landlord would not cooperate with the linking up of the box.

Mr Laing —There were some issues in Willunga because we have got absent landlords. Communication with them was somewhat difficult, but I do not think that was necessarily a resistance. I have not heard of the landlord being resistant to the connection being made—it was being made for free anyway—in Willunga as such.

Mr HUSIC —I have just been reading an article that has been circulated to the committee from iTnews. There is a research project that is being undertaken to tackle NBN attitudes in Willunga. I think it is being done for the South Australian government. It is indicated here that services are not likely to be commercially available in Willunga until the third quarter of this year. Is that your understanding?

Mr Laing —I have not been officially informed, but I understand it will happen down the track. The household connections occur in April, May and June; and then you are into the third quarter anyway.

Mr HUSIC —It appears NBN Co. in this article have confirmed that over 90 per cent of Willunga residents have agreed to have their homes connected to fibre. Is that your understanding?

Mr Laing —That is my understanding.

Mr HUSIC —Are you raising this issue about the pricing in anticipation of the fact that 90 per cent of homes want to be connected and that the rollout is going to be completed on this release site by the third-quarter, it is estimated. Is that where this is coming from? Do you just not know what the retailer is going come out with?

Mr Laing —We do not know what the offers are going to be. The Polytech in New Zealand paid $15,000 per annum and it was ‘eat as much as you like’. It was still an issue for them when I had Google and the desktop chewing things through. It is this mindset around data. We manage the amount of data that is flowing down, we charge people for the amount of data and we manage the speed at which that data flows down. I think as a pricing model in the digital age it really needs to be seriously looked at and tipped on its head.

CHAIR —It is not a universal model internationally? There are a lot of places that do not charge on that basis. Is that the conversation you are seeking us to have here?

Mr Laing —Yes.

Mr SYMON —I would like to go back to the pick-up rate of the connection—the lead-in connection to both businesses and houses. We have heard 84 per cent, 90 per cent. I think that figure is irrelevant. I am more interested in the 10 per cent or 16 per cent that did not pick it up, and whether you have any views or knowledge of why they turned their noses up at something that is offered for free and will in the future be needed, even if there is not a need for it now. Do you have any stories on that?

—I really do not—but my mother, she said she didn’t need it. So there might be an age thing in there. Otherwise, I do not know. There is always resistance to new ideas and to the technology. Why? I do not know. I have not explored it.

Mrs PRENTICE —Was the choice to opt in or to opt out?

—You opted in. You ticked the box and sent it off.

CHAIR —So it could have just been failure to organise—fill in the form, tick the box and send it in.

Mr Laing —Possibly.

CHAIR —It may not be resistance; it may just be not complying or participating.

Mr Laing —And possibly difficulty with landlords—not being able to contact them. There could be a range of things.

Mr SYMON —My fellow committee members have led me to my last question, and that is: do you see a use for an opt-out system in comparison to an opt-in system? In other words, it goes to a property unless you specifically say ‘no’.

Mr Laing —I think given the universality of the application, an opt out would be better than an opt in. Copper is in the ground, but it is getting old. This is the new telecommunications vehicle or wireless and I think every household and business needs to be connected.

CHAIR —Thank you. We appreciate you accepting our invitation to come to talk to us. We are doing all the capital cities but we also want to get some solid information from people in the regions about how, as you indicated, we avoid the digital divide continuing or being exacerbated by this roll-out. So your information was useful. If you have any further information to provide you can forward it through the secretary of the committee. Good luck with your advocacy and championing of these issues for you own association.

Committee adjourned at 2.28 pm