NBN pricing critical as digital divide deepens

NBN Co chairman Harrison Young says too few Australians have access to reliable high-speed broadband. AAP

Affordability of broadband and encouraging its use by people with low incomes is a major issue for the National Broadband Network, say researchers from Swinburne University who have been researching the digital divide.

The research, which is the third in a series running since 2007 for the World Internet Project, found five out of six Australians are online, but four in ten households earning less than $30,000 a year cannot afford broadband.

And as more people use the internet and more services become available, those who aren’t connected are at a greater disadvantage, said Swinburne University researcher Scott Ewing.

“Differences in income also affect how much people benefit from the internet,” Mr Ewing said.

“Not everyone gets the same ‘bang for their buck’ online, as people from lower income households are more likely to see it as a frustrating technology.”

For those households that aren’t connected, being disconnected is becoming a more significant issue, according to Julian Thomas, who is also from Swinburne’s ARC Centre of Excellence for Creative Industries and Innovation.

“The digital divide is narrowing but it’s getting deeper. The relative disadvantage you experience through not being connected is growing,” Professor Thomas said.

The research comes as NBN Co chairman Harrison Young has criticised the government for outsourcing many of the applications that make the NBN exciting.

In a speech to a Committee for Economic Development of Australia event today, Mr Young said outsourcing applications isn’t a long-term or sufficient solution.

“Capturing the benefits of eHealth and eEducation will require NBN Co and industry to engage with schools and hospitals, with state and Commonwealth government departments. Within the constraints of our wholesale mandate, we’re starting to do that,” Mr Young said.

He added that too few Australians have access to reliable high-speed broadband. “In terms of fixed broadband penetration at the end of last year, Australia ranked 21st out of 34 nations, as measured by the OECD.”

Swinburne’s research found two-thirds of respondents said the development of the NBN is a good idea, but Professor Thomas said a great deal of the impact the NBN can have will depend on how affordable it is and what kind of access to broadband low-income households can achieve.

“When you look at lower income households they are saying affordability is a major issue, including those households that are subscribing. They are subscribing but saying it’s difficult to afford, so there is a real issue there.”

Mr Young today defended NBN Co’s decision to overbuild the HFC networks already laid down by Telstra and Optus, arguing if NBN Co was the owner of those networks and could not overbuild them we could end up with an “ironic situation” where the wealthiest suburbs had the lowest-quality broadband in the country.

In that scenario, Mr Young said Telstra, Optus or another entrant would be likely to offer those households a “superior” service, overbuilding the HFC footprint with fibre, taking profits away from NBN Co and undermining its ability to offer uniform national wholesale prices.

Professor Thomas said it’s concerning that lower-income and less educated Australians make less use of the internet, and as a result get less out of it.

“There is then that concern that better information just delivers better results for a smaller group of people or a comparatively smaller part of the population.

"Since the extra bandwidth from NBN will provide more opportunities for Australians to access online content, we have to make sure that everyone partakes in this – so that the digital divide does not become more serious.”