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VICTORIAN VOICE: The road to recovery is broad

VICTORIAN VOICE: The road to recovery is broad

Regular readers of this column would be aware that I place a great deal of importance on the role that broadband Internet will play in the IT industry's recovery.

Affordable, reliable and universally available broadband access to the Internet will accelerate the mainstream adoption of Web-based business solutions. It will also change the way technology serves the average home consumer by introducing a range of new Internet-enabled applications.

Generally speaking, introducing new business systems will require a range of hardware upgrades, software applications and consulting services for the vast majority of small and medium enterprises that make up the Australian economy.

Many subscribe to the theory that broadband adoption is a chicken-and-egg proposition. The great unwashed (figuratively speaking) will not adopt high-speed Internet technology until the services are in place to warrant the additional costs involved.

Meanwhile, potential service providers will be deterred from investing large amounts of capital in delivering access and content until there is a critical mass of users available to make the business models viable. In these days of commercial consolidation and conservative corporate and government attitudes, no bean counter worth his abacus is going to open the coffers on anything but a sure thing.

Broadband will not be a sure thing until both users and services are in place. Throw the lack of necessary infrastructure and the high cost of access in for good measure, and it is apparent that there are still a few hurdles to negotiate.

It is a tired line to point the finger at the government and say it should be laying the foundations and investing in the infrastructure upon which broadband services and access will ride, but it is still a compelling one.

It is also timely, with debate raging about the full sell-off of Telstra. As soon as Australia's premier telecommunications company falls into the hands of private enterprise, there is no doubt national interest will be running a distant third place behind profit, with daylight second.

There is an analogy used in the telecommunications industry that compares the exponential growth benefits of broadband uptake to the freeway system in the US. I tend to agree with the theory that once the infrastructure is in place, the services and users will come.

After the Second World War, US military leaders returned from Europe impressed with the autobahn network in Germany. These superhighways were built by Hitler's fascist regime in the 1930s to shift troops rapidly around the country. It was an infrastructure used very efficiently in the following years as Germany annexed and invaded European neighbours leading up to and during the war.

Later, with the US plunged into a cold war with the Soviet Union and communism in general, those same military leaders were anxious for the infrastructure to be put in place in North America for rapid troop transport - it wasn't just the increasing ubiquity of the motor vehicle that prompted US government funding for the most ambitious and comprehensive freeway network in the world.

In the ensuing years, those freeways set the coordinates for regional development. Outsiders may now drive along a massive freeway through the middle of a burgeoning metropolis and wonder how they ever managed to build such a huge transport corridor through such a densely packed population.

The truth of the matter is that in many cases, the freeway was there first. The people, commerce and buildings all came later.

So too will the business opportunities, community benefits and economic growth from broadband come with the development of the infrastructure. More importantly, once the network is in place, the new hardware, software and services sales will start to flow as well.

Fortunately, the broadband infrastructure is slowly being put in place and access prices are creeping down to affordable levels. Only once this is accelerated will the channel feel the full force of industry recovery.

Gerard Norsa, ARN's Melbourne-based editor at large, can be contacted at 03 9690 2933 or gerard_norsa@idg.com.au.


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