Published on the 02/09/2014 | Written by Beverley Head

By 2023 the average household in Australia will need no more than 15 Megabits per second of internet download speeds according to a cost benefit analysis of the National Broadband Network…

The Government last week released a cost benefit analysis of the National Broadband Network (NBN) which set out the comparative costs of different technical approaches and forecast the speeds and bandwidth Australians will likely need in the future.

Using a baseline of no further rollout, the analysis indicated that an unsubsidised fibre to the node network would be the cheapest option, delivering a $24 billion benefit to the economy.

A multi technology approach, using a mix of fibre to the node, fibre to the network, HFC, fixed wireless and satellite, was tipped to deliver an $18 billion benefit in today’s dollars. This is the approach that the Government has embraced with its reworked NBN strategy now being rolled out by NBN Co.

In contrast the previous Government’s fibre to the node network would have delivered just $2 billion worth of benefits due to the higher costs and longer timescale involved according to the analysis.

Not surprisingly the results of the analysis have been embraced by the current minister for communications, Malcolm Turnbull, and condemned by shadow minister Jason Clare.

While the economic and political debate rages, the technical issue hinges around the supposition that by 2023 most households in Australia won’t need more than 15 Mbps internet speeds, and only one in 20 households will need more than 43 Mbps. This analysis, which was conducted by Communications Chambers, suggested that most households would be happy to accept that it would take an hour to download a console game at these speeds.

Its analysis of a household of four adults with a 4K TV also suggested that even that household would have a peak 70 Mbps – but only lasting 0.1 minutes a month.

These forecasts however are based on currently known applications. By 2023 there could be far more bandwidth-hungry applications that households may wish to deploy, and already among the early adopters of the NBN there is a sizeable cohort opting to take the fastest package available – well beyond 15 Mbps.

An appendix to the cost benefit analysis notes that more than a fifth of those people with NBN connections have already taken the fastest 100 Mbps upload and 40 Mbps download speeds, which on average retail for $101.50 a month.

NBN Co which is rolling out the network across Australia last week published an update on progress. The NBN is now available at 553,000 premises across Australia, and 210,000 organisations and individuals have so far taken up the new service.

NBN Co also revealed that by 2015 one in ten homes should have the opportunity to connect to the NBN.