2010 International Consumer Electronics Show
Las Vegas, Nevada
Friday, 8 January 2010
It is an absolute pleasure to be here as we embark on what will be a transformational decade.
The past ten years has been a period of great change, great development and great advance – particularly in the field of digital technology.
We have seen unprecedented change in the way we communicate.
The internet is now a part of the everyday, for work, entertainment and social interaction.
Mobile networks are now commonplace around the globe and people now expect mobility as part of their communications experience.
Indeed, in many parts of the world, some people’s first experience with telecommunications has been using mobile phones in the past ten years.
The next decade promises equal, if not more significant change, as the accessibility of high-speed broadband enables new applications and services in every part of our lives.
It promises improved productivity across economies.
It promises better services across societies.
It promises new solutions to many of the new, and old problems, we face across the globe.
Many of you here at this conference have been active participants in, and drivers of, digital evolution around the world for many years, and understand intimately that this is a sector constantly changing and challenging itself to discover and enable the next wave.
In this regard the annual CES forum has been an important showcase and launch-pad for innovation over the years, and for products now taken for granted by users.
This is a conference that celebrates creativity, champions ideas and helps us to better understand the great opportunities to enable positive change with technology.
You know that these emerging technologies have wide implications for the delivery of education, health and aged care, for improving business efficiency, for creating new markets, and for dealing with complex problems like climate change.
In Australia, we share this understanding and your vision for a broadband-enabled future.
To set the scene for our future, the Australian Government hosted – in the final days of 2009 – an historic forum on the development of our digital economy.
The Realising Our Broadband Future forum focussed on how to maximise the economic and social value of our investments in broadband infrastructure.
You may be aware of our plans in Australia to rollout a National Broadband Network, our country’s largest-ever nation-building infrastructure project.
The NBN (as it is known) is designed to enable Australia to lead and prosper in the emerging digital environment and our purpose with the forum was to explore how we can maximise the benefits on offer.
We engaged key stakeholders from the business, research and government communities to discuss what is possible and the next steps to enable the applications, services and business models of the future.
We worked to identify the immediate and tangible benefits of ubiquitous broadband for smart infrastructure, health, education, business and the community.
We involved as many people as possible – visionaries, decision-makers and community leaders – both in person and online.
Participation in the forum was energetic, to say the least, and a testament to the great passion in Australia (as at the conference here this week) for ensuring we capitalise on digital opportunities.
In fact, submissions to participate in the forum far exceeded our venue capacity and the online component of our discussion was hugely popular, with more than 1,000 contributions, hundreds of comments, and more than 60,000 people connected to the interactive wikis.
I am also told that Broadband Future was the most popular Australian Twitter hashtag for the two days of the event… a modern measure of success if ever there was one.
Our goal with Realising Our Broadband Future was to identify and commit to the next steps and the issues that must be addressed by government, business and the community.
The Australian Government wants to work together with business and the broader community to ensure we maximise the benefits of our investments in high-speed broadband infrastructure and related technologies for every Australian.
Digital economies are highly dynamic.
As modern economies are market-based, the transformation of our traditional economies into digital economies is appropriately market-led.
However, the transformative powers of digital technologies have broader implications for our communities – our societies – as well.
Therefore, when formulating strategies to deliver the maximum economic and social benefits of the digital economy, it is important to understand which sector of society is best placed to progress which element.
Firstly, the Government’s primary role is that of an enabler – as demonstrated by our broadband investment and role in bringing the community together to establish the foundations for the future.
Government should enable individuals, households and businesses to take-up the opportunities raised by the digital economy.
Secondly, a successful digital economy requires a digitally-confident and creative industry.
We need an environment that encourages and nurtures digital skills development and digital capabilities.
Thirdly, we require a digitally-empowered, confident and literate community.
This is a community that enjoys inclusive digital participation and the benefits of online engagement, leaving no-one behind.
In Australia, we want to ensure that as many people as possible have the opportunity to glimpse the exciting emerging world that many of you here are already active in.
Our intention is to recognise the great innovation taking place that will shape the way we live our lives in the future.
We want to highlight that what is possible today represents just a fraction of the potential benefits that will flow to all Australians with the National Broadband Network.
The NBN is a result of a long-standing commitment by the Australian Government, led by Prime Minister Kevin Rudd, to deliver the broadband infrastructure foundation we need for the future.
As the PM said at the Realising Our Broadband Future forum:
Broadband is the infrastructure of the 21st century.
Just as railway tracks laid the future for the 19th century, and electricity grids and highways laid the future in the 20th century, so broadband is the core infrastructure of the new century.
Currently, in Australia broadband is slow and expensive.
The latest OECD statistics continue to see Australia trail many other developed countries on key broadband indicators.
We are 16th out of 30 countries in terms of broadband penetration, and 3rd most expensive out of 30 countries in term of monthly subscription prices.
A study, by Access Economics for IBM, highlights the transformative economic potential of high-speed broadband in Australia.
It suggests that investments in smart technologies supported by broadband in electricity, irrigation, health and transport could add more than 70,000 jobs in 2014 alone.
It makes a conservative prediction that these investments could increase GDP by 1.5 per cent within ten years.
Another report by the Centre for International Economics said broadband could lift national economic output by 1.4 per cent after five to six years.
For these reasons, in 2008, the Rudd Government tested the capacity of the commercial market to deliver a quantum leap in the infrastructure required to support our digital future.
We called for proposals to rollout a Fibre-to-the-Node network to 98 per cent of homes and businesses.
In early 2009, despite receiving a number of proposals, it was established that the commercial market was unable to meet our objectives.
The independent panel of experts advising the Government noted the rapid deterioration of the global economy had a significant impact on the process.
At this time the Government had a choice: to walk away or stand firm to our vision and commitment to establish Australia’s high-speed broadband foundation.
We have since taken steps to deliver a National Broadband Network, in partnership with the private sector, exceeding our original commitment and putting Australia at the forefront of global broadband trends.
We have created NBN Co to construct the network.
We have also made it clear that five years after the completion of the network, we will privatise the company.
The NBN will be a legislated wholesale-only, open access network connecting 90 per cent of homes, workplaces and schools with Fibre-to-the-Premises and the remaining 10 per cent with next-generation wireless and satellite.
Our focus on fibre reflects growing international momentum.
In fact, Fibre-to-the-Premises is becoming the standard for high-speed connectivity in our own region and, according to the FTTH Council, now represents 63 per cent of fibre subscriptions across the Asia Pacific broadband market.
The FTTH Council also reports that the Asian region now accounts for more than 30.8 million of the world’s estimated 38 million Fibre-to-the Home connections.
Take-up is accelerating at extraordinary rates and subscriptions surged 12 per cent across the region in the year to December 2008.
As I have said, our investment will provide an enabling platform for Australia’s future and ensure we keep pace with our economic competitors.
Australia makes no apologies for taking decisive action to establish our digital foundations.
We recognise that networked technologies, applications and services fuel innovation, encourage creative business activity and stimulate the restructuring of industries and institutions.
We understand the capacity for our infrastructure investment to provide a much-needed economic stimulus by generating thousands of jobs throughout the construction phase.
Indeed, the NBN will support 25,000 jobs in Australia for each year of the eight year build – peaking at 37,000.
Additionally and as our recent forum articulated, it will lay the foundations for future growth, productivity and innovation across all sectors of the economy in the years, and the decades, ahead.
Already, the NBN has stimulated new activity in the Australian ICT sector.
Melbourne University has launched the Institute for the Broadband Enabled Economy to develop and test applications and services in areas such as e-health, e-education, e-commerce, and environmental monitoring.
To its credit, it has already attracted a strong selection of international partners – Alcatel-Lucent, Cisco, Microsoft, Ericsson and NEC, to name just a few.
In November we saw Ericsson launch a new centre of excellence for IPTV, servicing customers across the Asia Pacific region but based in Melbourne, in part thanks to plans to advance Australia’s broadband capabilities.
The Government is also a strong supporter of National ICT Australia (or NICTA as it is known), a national development and commercialisation incubator for cutting-edge digital innovation.
NICTA recently launched a new laboratory complex in Sydney, which I am sure will see it continue to grow its research and standing with international partners, and lead to additional commercialisation opportunities.
All of these activities help demonstrate a broader agenda in Australia, via the NBN, to enable our national capability to lead in the global digital economy.
They demonstrate the excitement that our project has already generated in the global ICT sector, and the momentum that will ensure we all enjoy the productivity and social benefits on offer.
If you have not already done so, I would encourage any of you here today to look closely at the activities of NICTA and the Institute for the Broadband Enabled Economy as benchmarks for ICT and broadband-enabled development.
In addition to enabling innovation and productivity, the NBN –Australia’s first truly national wholesale-only communications network – is in itself an historic piece of micro-economic reform in the telecommunications sector.
Our model will support a new competitive communications market.
It will break down geographic and technology barriers and ensure improved economic and social opportunities across the country.
The model is designed to deliver better services, better prices and new applications for every Australian.
For years industry has been calling for fundamental and historic reform in the sector.
In the long-term, the NBN delivers this reform by creating the equity of wholesale access required for a competitive market.
In the shorter-term, the Government has also taken bold steps to reform the competitive regulations underpinning our current communications sector, to ensure better consumer outcomes and protections while the NBN is rolled out.
Our reforms create a more competitive market structure and provide improved safeguards for consumers on basic service delivery.
They align regulation in the telecoms sector much more closely with the structural and access arrangements we have in other utility sectors, such as gas and electricity.
Telstra, the formerly Government-owned carrier, is one of the most highly integrated private telecommunications companies in the world.
As part of our telecommunications regulatory reform measures, the Government has resolved to address the underlying incentives Telstra has to favour its own retail businesses over its wholesale customers.
Since I announced these reforms last September, the Government has been in positive discussions with Telstra.
The leadership team at Telstra has indicated that it shares the Government’s vision for the NBN and has engaged in a constructive way to determine how they may play a role.
In December I was pleased to note progress in negotiations between Telstra and NBN Co, the company charged with delivering the network project, regarding Telstra’s participation.
The formalised Terms of Engagement includes a preferred model for any agreement which would see a progressive migration from Telstra’s copper access network to a Fibre-to-the-Premises NBN.
While there are many complex issues still to be resolved before any final agreement is reached, I remain confident that both parties can find a mutually acceptable outcome.
A model that involves the progressive migration from Telstra’s copper access network to a Fibre-to-the-Premise NBN and an acceptable solution to the use of ducts and backhaul infrastructure will deliver structural separation.
However, the Government beleives it will also be important under a model such as this to improve competitive outcomes during the transition period.
We remain committed to our regulatory reforms package to underpin the framework for any agreement.
In addition to discussions with Telstra, I am pleased to say that great strides are being made, getting on with the job delivering the National Broadband Network.
We have established NBN Co, headed by former Alcatel President and Chief Operating Officer Mike Quigley.
Mike spent some considerable time working here in the US in his previous roles and is an outstanding candidate to make the NBN a reality.
NBN Co has rapidly grown to a team of more than 40 staff and significant progress has been made to establish the necessary organisational infrastructure.
Work is already underway digging the first trenches and laying fibre cable in Tasmania, one of Australia’s most neglected broadband markets.
Fibre-to-the-Premises services are expected to be available to stage one Tasmanian towns in mid-2010, making them the first premises nationally to be connected and running on the network.
We are also delivering 6,000 kilometres of regional broadband backbone networks across the country.
This priority $250 million investment will directly benefit more than 395,000 people and provide backbone building blocks for the NBN.
Six links will connect 100 regional locations across five states and the Northern Territory, including iconic places in outback Australia like Broken Hill, Longreach, Katherine and Geraldton.
The networks will provide competitive wholesale broadband into these places, helping resolve the economic blockage to broadband in regional Australia.
Already, a number of retail service providers have indicated that they aim to take advantage of these networks to enter underserved markets.
Of course, this is just the beginning and the NBN will ensure superfast broadband is also expanded to all homes, schools and workplaces across Australia.
Implementation planning is well advanced for deployment nationally and NBN Co has issued a call for capability statements from companies to supply the vital equipment and services supporting the rollout.
2010 will be a very big year for the NBN and I look forward to delivering more news as we progress this great project.
In addition to the NBN, the Government is also considering other important infrastructure developments that will support our digital economy.
This includes the digital dividend, the wireless spectrum that will become available when Australia completes the switch-off of analog television broadcasts, at the end of 2013.
The digital dividend offers a range of opportunities for new services and applications to benefit Australians in the future.
Releasing it to the market will be an important microeconomic reform that will boost productivity in the economy by enabling new capabilities.
The digital dividend is a once in a generation opportunity to encourage the introduction of new communications services and to improve existing services for the benefit of businesses and individuals.
Like Governments around the world, including here in the US, the Australian Government is currently considering how best to position to maximise our digital dividend.
Just this week I issued a paper seeking public comment on the benefits and costs of capitalising on this asset.
The paper establishes a Government target of 126 megahertz (MHz) of contiguous, ultra-high frequency spectrum, as Australia’s digital dividend.
Technical studies demonstrate that this target – which will involve restacking digital television services to new channels – is feasible and will be suitable for a larger number of potential uses.
Our media regulator is also about to release a discussion paper on potential uses for the 2.5 gigahertz spectrum currently used by broadcasters for electronic news gathering.
These activities will help the Government to achieving its goal to make the best use of what is undeniably a key national infrastructure asset.
It is part of a plan to ensure that Australia has the required foundations and is well positioned to capitalise and lead in the emerging global digital economy.
Australia has a great vision to take advantage of the opportunities ahead as broadband-enabled innovation and technology become further entrenched in our lives over the years ahead.
Our work with the NBN, with the digital dividend, with our engagement with business and the broader community, is all designed to establish our platform to do that.
Like those of you here today, we understand the capacity to improve social service, improve business opportunity and solve some of the great problems of our times by enabling innovation in technology.
We understand the transformation ahead in the ten years and the decades to follow as high-speed broadband takes its position as a major economic driver.
Thank you for the opportunity to be here and speak to you today.
