Superhypeway salesman's report

Review of: Networking Australia's future Final Report of the Broadband Services Expert Group, December 1994.

Reviewed by David Sless

editor's note: originally published in response to a government commissioned report into the future of the 'information superhighway' The Australian Tuesday March 7 pp 48 & 54, 1995

It is an irony of the information society that there is so little independent information or research to guide us. Instead, according to the Prime Minister, when he launched the final report of the Broadband Services Expert Group (BSEG), we have `encyclopaedia salesmen'.

The important starting point for any reader of this enthusiastic report is to note that the members of the `Expert Group', from the Chairman Brian Johns down, all have vested interests in the development of broadband services, as suppliers of network infrastructure, hardware, software, or services. Their enthusiasm is, therefore, not surprising and very evident. Their reasoning and `expertise' is less evident.

By their own account, they behaved more like a commission of inquiry, seeking opinion broadly from the community. But they applied neither expert criteria nor properly formulated commission of inquiry procedures for collecting and sifting evidence. The results, all too evident in their interim report, are still largely apparent in this final report.

One of BSEG's main terms of reference was to look at customer demand for broadband services. They commissioned a study to examine future demand but, interestingly, have not published the results of this study with their final report. Rather, they have taken the unusual step of publishing these pivotal findings seperately, giving no detailed projections in their report, and in fact distancing themselves from the study by saying that they do not necessarily endorse the views expressed in the demand studies.

Given their general enthusiasm for the future, the demand studies were either poorly done or based on dubious assumptions. The most common flaw in demand studies is to assume that new technologies substitute for old, or take over existing markets: gambling, pornography, and shopping are the obvious ones in this case. Unfortunately, the historical evidence does not support the substitution hypothesis. For example, TV did not replace film, computers did not get rid of paper. Demand studies based on substitution are of dubious value. However, without these pivotal studies—without clear evidence of customer demand—what is there to say, and, most importantly, who is there to pay?

Who pays becomes clearly evident in their nineteen recommendations. Eight concern industry regulation, one involves some small cost to industry, and ten require government to spend many millions of dollars.

Stripped of its rhetoric, the BSEG report is an attempt to persuade government to embark on a massive, costly, and highly risky social experiment with new technology. If the report's recommendations are implemented, the greatest impact of this experiment will be in the education and training sector, where totally untried and untested technologies will be expected to deliver results which have been impossible to deliver at any other time and with any other media throughout the history of education.

It may work. It may be the basis of a whole new multi-media industry with huge export potential. But, it might not. Nobody really knows. The report merely adds to our stock of ignorance.

For many years Australia has been poorly served by government in communication policy. We have very little understanding of our communication environment, or how people use the services available to them. Without any real idea of how we communicate now, any future projections, however enthusiastic, are worthless.

All BSEG's talk of improving communications is meaningless.

Very little is known about the relation between people and information technology—how we use it, how it affects us, how it may affect our social and economic life in the future. We do not know whether technology changes society or whether people adapt technology to social needs. BSEG has a bob each way. In the first sentence of a chapter portentously titled `The Communications Society' they assert that `New communications technologies...will transform society'. In the last sentence they tell us that `Rather than imposing itself on us, the communications platform offers us the opportunity to create the sort of society we want to live in.' As the man at the races said, `You pays your money and you takes your chance!'

Such grand and contradictory claims about technology are empty, and moreover miss the point. The real national resource in communication is people, not the machines of signal transmission. Once we get beyond the point where our society is infatuated with the technology, and the information superhighway has become as exciting and commonplace as plumbing, we will still be left with the same problems of human communication. On this subject, BSEG offers us no new insights, only platitudes.

We need broad-based evidence for government policy development. In other areas such as public health policy, far more effort is made to collect relevant social statistics ahead of decision making. Indeed, if we compared BESG policy development with its counterpart in public health and medicine—a field that has changed human society—then communication policy making is still in the dark ages, guided by blind prejudice rather than evidence and argument.

The nearest thing we have to evidence of likely demand is a report from the Bureau of Transport and Communication Economics from a project led by Jen St Clair (Communication Futures Project Work in Progress Paper 4: Networked Communication Services to the Home: Future Demand Scenarios).

By skilfully using ABS data on household expenditure and time-use, St Clair gives us a glimpse, for the first time, of the real information economy, in which people juggle limited money and time for a variety of purposes. Most people's lives are already full of activity on a tight budget. They have no free time and no spare cash waiting to be used on the information superhighway. Those who do have time to spare, tend also to be those with little money to spend.

With household budgets already full, if people are going to buy into the superhighway, they will have to give something up. But the evidence shows that household use of time and money is highly stable over the long term, and unlikely to change radically for a new service.

If household consumption of all existing information services were to be based on a user-pays principle, much of the current information economy—free-to-air television, newspapers, telephone services—would simply collapse. Investors would lose their money. Users would be charged for what they currently receive free, or significantly subsidised. Information services will be increasingly available only to those that can afford them—but not necessarily on an affordable basis for all. These findings, publicly available, yet curiously omitted from the BSEG report, may well explain why the Group has so strongly advocated government expenditure as the main support for the industry.

St Clair's report is careful to point to its own limitations. It concludes that many of the key questions that need to be answered ahead of public investment in the superhighway "are not yet answerable, since the research which would help Australian policy makers and community groups to form a view is currently unavailable".

Of course, good balanced research of the kind suggested by St Clair is expensive, though not as expensive as ignorance. Wiring Australia for the superhighway could cost anywhere from $20 billion to upwards of $70 billion dollars, depending on which oracle you consult.

BSEG suggests a Government policy and industry strategy based on public expenditure, a belief in technology as a saviour, and a gullible acceptance of industry press releases. Even at the lower figure of $20 billion, this is a lot of money to invest on the basis of faith, optimism, and PR hype.

If BSEG's technophoria is badly wrong then all of us—in our homes, businesses and schools—will end up paying more for using telecommunications, government information, newspapers, magazines and books; we will lose free-to-air television; and we will have spent a great deal on useless hardware and software. Those in highly paid professions may get some benefits from the superhighway, but at the expense of the majority who will have less than they have now.

The truth is that nobody knows what will happen, and certainly not this group of `Experts'. Unfortunately, our politicians seem to have embraced the encyclopaedia salesmen's vision. Let us hope that business and community leaders see the need for better research and advice before making decisions.