Tech entrepreneur Dave Stevens slams NBN, calls for rural areas to be upgraded with improved satellite, wireless connections

Wealthy IT entrepreneur Dave Stevens says the National Broadband Network is a waste of money and more attention should be put on improving connections in rural areas through technology, including wireless and satellite.

The comments come as pressure builds on the Government to release a cost-benefits analysis for the massive infrastructure project, with entrepreneurs including TPG chief executive David Teoh and Wotif founder Graeme Wood calling for such a report.

Stevens, who operates Sydney-based IT provider Brennan, told SmartCompany the focus should be on improving telco services in rural areas, and not providing high-speed access to households in urban areas that are already well-serviced by existing networks.

“What we have in the rural and outback areas is just totally inadequate, there’s no doubt about that. Even trying to get decent bandwidth to larger-sized businesses such as trucking companies and so on, it’s a joke. Massively expensive. We need to do something to focus on these uncommercial areas.”

“I just don’t think that giving fibre to 95% of Australians that don’t need the speed is appropriate. And by the time they’ve finished the rollout, there will be technology needed and speeds will have increased by tenfold and it’ll be time to reinvest in the network again.”

Stevens says satellite and wireless services could be improved in rural areas for a few billion, saving Government the hassle of an infrastructure project which may fail. He also says this could be combined with improving fibre connections in some blackspot areas.

“Of course, if it were my money, there would be a few different ways you could do it. You could buy Telstra again, then plow a few billion into increasing 3G and satellite coverage in these rural areas.”

“Once you have that work and you’re making some sort of profit, you can float Telstra again and recoup some of the money you’ve spent. That would be one way. If you didn’t want to do that, you could just invest in the rural infrastructure yourself or provide incentives to industry.”

Stevens also joins a number of entrepreneurs in the telco industry calling for a cost-benefits analysis. He believes the cost-per-household doesn’t deliver a good enough outcome and he questions just how much individuals would pay for high-speed services.

“By just doing the maths around how many businesses there are, how many households there are, etc, and the take-up rate we’re likely to see. I think purely from a value for money basis there are other things we could do. Imagine what you could do with $43 billion?”

“There has been no justification about why we need these massive speeds. They talk about eHealth and eLearning and all that sort of stuff, but you can do that on a copper based network. To say you need fibre to do video-conferencing and so on is bologna.”

One of the Government’s main arguments for the NBN is that it will provide capacity for services that don’t exist yet. But Stevens thinks that argument is insufficient for funding the $43 billion project.

“If they don’t exist yet, how can we guarantee the network can cater for them when they do exist? The technology to drive this fibre is redundant every seven to 10 years. The $43 billion will depreciate to zero very quickly in a decade.”

Stevens says he suspects the Government has actually conducted a cost-benefits analysis, but believes it would never be released due to the fact that, “I just don’t see how it would work from a financial point view.”

“We’re talking about super-fast speed, but the 100mbps speeds we’re talking about can be conducted over the copper network.”

Stevens’ protests come after several tech veterans including David Teoh and Graeme Wood called for a cost benefits analysts. Others in the Alliance for Affordable Broadband, which include AAPT chief Paul Broad and Pipe Networks chief Bevan Slattery, also say a cost-benefits analysts should be conducted.

Stevens is one of the most wealthy young entrepreneurs in Australia, having been listed as the 13th richest Australian under 40 in 2008 by BRW with a fortune worth $109 million. He has not appeared on the list since due to turning 41.