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back to article Net economy bigger than Ben Hur

The Internet isn’t just a curiousity or a medium for transmitting videos of cats and naughty bits: according to a Deloitte Access Economics report, its aggregate impact on the economy rivals that of Australia’s retail sector. According to The Connected Continent, billed as the first attempt to quantify the scale of the Internet …

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FAIL

Unconvinced

The last paragraph makes a whole lot of assumptions:

"But if the report is even ballpark-accurate, then the household benefits it accrues in a single year are greater than the price tag put on the National Broadband Network. Over the lifetime of the project, it really should justify the spend – even ignoring the business benefits."

Firstly, the NBN isn't the first 'internet' in Australia. It is simply a faster network that will (hopefully) reach more places. So it is absurd to assume that the NBN will bring in $50bn of benefits a year. They already exist under the old networks.

So what value will the NBN bring in? Well, that requires a lot of assumptions. How many people will use it? How much faster will it be? How many more transactions will occur solely because of the NBN? Conversely, how many transactions would have occurred without the NBN. We know the answer is at least $50bn (and growing), because that’s what’s already occurring. My guess is that the NBN won’t make that much of a difference to the ‘internet economy’. At least not until people start finding uses for 100G speeds for transactions.

Secondly, it assumes that people will only use the NBN for the internet economy for the “lifetime of the project”. It’s a long project. With people spending more and more money via apps on mobile devices, it’s not exactly clear that the NBN will be the sole provider for the ‘internet economy’ for its entire lifetime. Indeed, by your logic, surely the trend of spending increased amounts of money on mobile devices argues for greater investment in mobile infrastructure, no?

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tunnel vision

So you would want some kind of infrastructure to actually support your expanded mobile network? Say for example, some kind of widely available fibre network? Oh wai....

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