Aussie internet risks grinding to a halt on Netflix effect

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By Leith van Onselen

Last month, the ABS released its half-yearly Internet Activity report, which showed near exponential growth in data usage despite only moderate (2.1%) annual growth in internet subscribers:

Around the same time, Roy Morgan Research released a survey showing huge growth in Netflix subscriber numbers, which has surged to some 7.6 million Australians:

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Today, it has been reported that Australians’ love of Netflix and other streaming services could soon see the internet effectively grind to a halt during peak times, despite the $49 billion being spent on the national broadband network. From The New Daily:

“The network could effectively stop between 5pm to 9pm,” Mark Gregory, electronic and telecommunications associate professor at RMIT University, told The New Daily.

He said the unprecedented uptake of high definition (HD) online streaming services, such as Netflix, put Australia in danger of a network collapse during peak time despite the nation’s biggest-ever $49 billion infrastructure spend on the national broadband network (NBN)…

People are already aware of slow network speeds at peak times, particularly after work as many Australians sit down for a TV binge…

Akamai’s ‘State of the Internet’ report released recently found Australia’s average internet speeds continued to hang in limbo with countries such as Kenya and Russia, and far behind our nearest neighbour New Zealand.

New Zealand’s own version of the NBN promises to deliver to most citizens speeds of up to 100 megabits (Mbps) download a second, while 80 per cent of Australians signed up to the NBN receive a maximum of up to 25Mbps.

Only 13 per cent have signed up for the much faster and more expensive high-end 100Mbps, with many failing to receive even that…

Current NBN plans to utilise existing copper wiring place hard limits on download speeds and with more users joining the network speeds may continue to fall.

“Netflix is trying to say to customers that we can provide you with 4K,” Professor Gregory said.

“But if they were to transmit at 50-70 megabits a second required for 4K, our network could collapse.”

But 4K will be old news by the time 8K streaming comes online for the 2020 Olympics in Tokyo.

Just another example of Australia’s crumbling infrastructure.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.