I've always thought the answer was yes but haven't been able to back it up with the numbers. The Telecommunication Users Association (TUANZ) conference on e-business in Auckland last week gave me the numbers that prove a growing number of people agree with me on this one.
It's been a year since the Southern Cross Cable went live, and in that time we've seen usage trickle along at a relatively slow rate. There are two reasons for that. The first is a lack of content for broadband users to take advantage of. That's being fixed constantly as more and more companies realise just how much more the user wants. The first trailer for The Phantom Menace wasn't going to be released online at all. Today that would be unthinkable.
The other reason is cost, and that's something that doesn't seem to be coming under as much scrutiny as it should. While end user costs are (slowly) coming down, costs to the ISP are still at levels that reflect a pre-Southern Cross Cable era. SCC claims to have built the arrival of the cable into its pricing before the launch, but that's got to change before anything else will.
IT minister Paul Swain says that while the telecommunications inquiry was looking at the entire industry, broadband was nothing more than a footnote. Now he's of the opinion that broadband is the most important part of the whole telecommunications industry and should be the focus of all our work and efforts. It's good to see someone that highly placed realise it.
So why is broadband so important? I've struggled to explain to people in the past that high-speed internet access is only the tip of the iceberg. Broadband changes the way you use the internet. With a broadband connection multimedia and interactivity become commonplace, everyday activities. Schools want specialised teachers but may not have the class sizes to warrant paying for one full time. No problem: teleconference them in from somewhere that does. Can't do that on 56Kbit/s.
The head of Southern Cross Cables, Ross Pfeffer, who was also at the conference, showed us the results of a US survey about productivity increases. It's common thinking that the PC brought about almost no increase in productivity among white collar workers. Until the internet came along, that is. To be more precise: until broadband came along.
The figures are astounding. If we follow the growth path laid out by US economist Robert Crandall and engineer Charles Jackson (you can see for yourself here), broadband will contribute $US500 billion per year to the US economy. The pair took the approach that broadband will become as ubiquitous as the telephone is today and tried to work out what the impact on business would be. Despite the $US500 billion estimate, they say nobody can really predict just how large an impact broadband will have because of the sheer scope of the internet and its reach into every aspect of our lives.
"At present, fewer than 8% of [US] households have broadband service," Crandall says, "therefore many of the valuable applications have not yet been developed."
In the early 1990s, with only a handful of fibre cables connecting North America with Europe, telcos were still talking in terms of gigabytes of traffic. Even taking the internet into account, Pfeffer says they really weren't prepared for a technology to completely take over the entire industry within a decade, yet that's exactly what has happened.
The data that is transferred via the internet makes up roughly 95% of the traffic travelling on these pipes even as the pipes themselves have been enhanced to carry vastly more traffic.
DSL user numbers double every six months – and already exceed 10 million worldwide. Pfeffer says that's peanuts if we consider what kind of uptake we'd get with true broadband - 10Mbit/s or even 100Mbit/s to the desktop.