Telstra's recently launched HFC (Hybrid Fibre Coax) cable Internet service signals the commencement of a bold new era in telecommunications. The technical details of this service - and its shortcomings - will be fully explored in the August issue. Lets take a look at this new packet-switched era, its implications for humanity and why the ACCC and the Telecommunications Access Forum must ensure competitive access to Australia's HFC systems.
In a century dominated by mass printed and electronic media, the telephone has been the main technical means of person-to-person communication. Telephony's growth into a reliable, digital global network required brute-force, "mainframe" engineering to provide transmission and circuit-switching on such a vast scale.
The Internet's packet-switched flexibility enables person-to-person, person-to-group, real-time and time-shifted communication, with text, voice and other methods - using mass produced equipment costing no more than a few thousand dollars. While still relying on telephony's circuit-switched infrastructure for its data links, every other aspect of the Internet is "mini" and "micro" compared to the increasingly mainframe nature of telephone exchanges. New Internet protocols and applications can be rapidly developed and globally deployed, while comparatively modest software upgrades to telephone exchanges take years, and cost millions of dollars.
The potential speed of an HFC Internet service is certainly dramatic, but prices will have to drop below a tenth of current levels before it can be widely used for quality music and video applications. The ability of the new service to be active 24 hours day is at least as important as its speed. When Telstra provides fixed IP addresses and removes its ridiculous barriers to voice, videoconferencing, web serving and many other applications, then its service will become a foundation of unprecedented fertility for innovation in human communications.
When costs fall, and when a large proportion of the population has 24 hour a day access to packet switched communications at broadband rates - or narrowband rates as dictated by geography and mobility - what limits are there to human communications? Touch, taste and smell will have to wait for a more advanced technology, but TCP/IP (and later ATM) is perfect for text, audio and visual communication.
Two other aspects of HFC Internet deserve special recognition. Firstly, this is the first major telecommunications infrastructure development designed for packets rather than circuits. Secondly, unlike telephony, computers and many other technologies, HFC telecommunications was developed for the consumer market rather than for business - a distinction it shares with television and the compact disc. HFC Internet will facilitate communications which are too specialised for broadcasting and pre-pressed CDs and can carry voice communications which bypass or interface with the telephone network. HFC Internet applications are generally more diverse, powerful and cost-effective than what could be supported by ordinary phone calls.
Permanent connectivity must be accompanied by volume charging for traffic. Provided there are multiple technical and business models for connecting to the global packet- switched network, supply and demand should be closely matched and monopoly or duopoly pricing should be precluded. For the foreseeable future, HFC cables will be the primary broadband infrastructure for Australian homes and businesses . The pricing and performance of Telstra's and Optus' HFC infrastructures will soon be key determinants of Australia's economic well-being.
For this reason it is essential that the communicative functions of the HFC systems be "declared services", for the purpose of ensuring competitive access. We should be thankful for Telstra's and Optus' investment (which we will eventually pay for) - since it means Australia is now ready to lead the world in broadband access for homes and businesses. However, due to a distortion of normal democratic processes, most of the HFC cables are a permanent visual blight on the lives of millions of people. Telstra and Optus owe us a lot on this account. Despite the difficulty of devising suitable technical and administrative arrangements, the ACCC must ensure that HFC communications does not become a cosy duopoly.
While big-company engineering and investment is essential for creating an HFC network, the marketing approaches of such companies can seriously limit the network's utility. Wary of cannibalising existing revenue streams, and overly fond of segmenting and targeting their customers, they may restrict or overprice services to the point of stifling the creative utilisation which is the pre-requisite of a thriving knowledge-based economy. Competitive access to HFC is our best protection from the hunting and herding behavioural propensities of big-company marketers - a fascinating topic for a future column.
Robin Whittle is Director of First Principles, a Melbourne based consultancy specialising in broadband networks and applications. rw@firstpr.com.au http://www.firstpr.com.au
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