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CEO Of Australia’s Government Network Asks Whether There Is A Market For Gigabit

February 17, 2017

Are one gigabit broadband speeds necessary?

In the United States we’ve clearly seen an uptick in demand—and of private Internet Service Providers (ISPs) fulfilling that demand—but Bill Morrow, the CEO of Australia’s National Broadband Network (or NBN, a government owned system) says most consumers still don’t need, or want, these speeds. At any price.

ZDNet quoted a recent opinion piece written by Morrow in which he said, “[T]here is still minimal consumer demand for these ultra-fast speeds — especially at the prices retailers would have to charge for them.” Morrow argued that consumers even have trouble shelling out the fees that are necessary to pay for 100 mbps service. Morrow noted that NBN’s 25 mbps package is the most popular among the system’s consumers.

The situation is not isolated to Australia. To bolster his argument, Morrow pointed to the United States, noting that Google Fiber found “viable economics for gigabit broadband simply did not exist once the initial hype of the project had faded.” (The city of Opelika, Ala. noted this week that its government-owned broadband network has only five subscribers to its municipal system.)

Morrow said government networks like NBN must be “realistic” about the marketplace. He said that most consumers, especially the average family, just don’t need speeds as fast as a gigabit. He said “there is literally not a single mass market consumer application—or even a combination of applications—that requires 1Gbps capability right now.”

Morrow also argued that a cost isn’t the only problem. He said, “Even if we offered it for free, we see the evidence around the world that they [consumers] wouldn’t use it anyway.”

That notion is worth considering the next time local, state, or federal policymakers in the United States propose “free” government gigabit service.