The Government has announced it will establish a new company that will invest up to $43 billion over eight years to build and operate a National Broadband Network, delivering ‘superfast’ broadband to Australian homes and workplaces.

This Fibre-To-The-Premises (FTTP) plan (at least insofar as infrastructure technology is concerned), mirrors closely the plan and rollout done by Telstra almost exactly 20 years ago (they were still Telecom Australia back then). While Telecom Australia rolled out and installed a reported 70% of the fibre that was required, the plan to actually use that fibre was axed, and the fibre left largely fallow throughout Australian cities, except for some that was ultimately converted to interexchange use.

The Governments FTTP plan will deliver 100MBps services to the majority of Australian homes, workplaces and schools, and high-speed (though higher-latency) connections to remote and small rural communities.

Unfortunately, as it presently stands, the majority of broadband capacity already available in Australian homes is going to waste. I like the government’s plan. I really do. But unless they can deliver extraordinary cost savings to go with the new capacity, all they will end up doing is vastly increasing the amount of infrastructure that is being wasted.

The issues are a combination of cost, plans, and contention. As an example, I have a fairly substantive broadband connection – I wouldn’t be able to do my job without it. It’s a 10Mbps connection, less than would be available even on the slowest of the planned NBN services.

On the highest capacity and most expensive data-plan available to me, I could run that connection at capacity for three hours before I’ve used up the entirety of my plan for a month.

Three hours. You wouldn’t want to get distracted by telemarketers or the kids playing in the yard, or something compelling on the television if there was a chance that a piece of software might get away from you and pull as much data as your connection could deliver. And that’s happened. A software updater gets confused, and you can kiss your data-plan goodbye for the month.

It makes you think twice about downloading updates for World of Warcraft or other MMOGs, I can tell you. Software that’s digitally delivered or prone to large content updates is something you have to plan for. My own household data-budget allows for six hours of time online in Second Life per day, that time having to be divided up between three adult users for classes, meetings, business and whatever’s left for socialising.

Plans that provide, say, 20GB of data for a month don’t begin to get close to the notion of “the connected home”. Lord of the Rings Online, if bought online, will set you back an easy 10GB in basic downloads,  and maybe another 2GB in content patches — before you’ve even started to play.

NBN’s FTTP certainly has a lot to offer. The usage of virtual environments for education, training, business and leisure has been held back significantly by the inability of existing infrastructure to deliver. Research and development of richer and more effective virtual environments by some very skilled Australian businesses and researchers is ultimately plodding along because those advances come at the cost of large quantities of data that must be moved with speed and aplomb.

Unless the government’s NBN is going to deliver capacity at a fraction of the current cost of data, though, Australian NBN broadband consumers are just going to go broke very quickly at worst, or leave Gigabits of capacity unused and wasted.