In their second of three discussion documents, the Commerce Commission’s focus is on the drivers of demand from the health sector and schools.

But just like the first discussion document on technical issues, this report does not address the issues that may limit broadband demand in rural areas.  This is a surprising omission given that the government’s objectives of reducing health care costs and improving education outcomes, will have the greatest impact on those individuals defined as living in rural areas.

It is curious that the Commerce Commission should want to explore demand inhibitors from the health and education sectors because it is government policy that directly drives that demand.  

In the area of health care, the government have a particular problem.  It is a cost problem.  A 2007 Treasury report foresaw the possibility of health expenditure doubling to 12% of GDP by 2050 and concluded that this “is probably not sustainable.”

So what is driving the government’s push for ultrafast broadband is a reduction in health care costs and as they are paying for health centres to be connected, demand must be 100%.  

Solid demand for high speed broadband from schools is not in doubt.  Teachers and students alike want and need high speed Internet access.  The government are paying the capital cost of a school’s connections but usage of those connections must be paid from the school’s existing budget and some schools may not connect because they do not have the funds.

Teachers are unlikely to let this happen.  They see huge potential in the Internet providing access to new teaching resources, a means for collaboration by both teachers and students, and opportunities for student-centred learning to be at their own pace and according to their own style.

It follows that as fast connectivity becomes more widely available in schools, students will need equivalent access at home and parents will come under pressure to buy it.  

The report does see rural health services as being a “special challenge” and that technological solutions are available.   Broadband-based solutions in the areas of Telehealth, remote monitoring, aged care, chronic conditions and medication management are seen as providing opportunities for reducing costs. And, as in education, people wanting these services at home will be a significant driver of demand for ultra-fast broadband .

So the drivers for the uptake of high speed broadband in health and in education are clear.  But where do they convert to potential barriers to that uptake?  Ignoring the issue of price, only urban areas will have the broadband infrastructure to provide those services.  

By government design, rural areas will not.  

This is because the community objective of the Rural Broadband Initiative is for a minimum peak speed of 5Mbps.  ComCom’s first report, on technical issues, showed that HD video downloads, medical file sharing and basic remote diagnosis and remote education, all required up and down speeds of 5 - 10Mbps.  Telemedicine, education services and HD video for high quality medical diagnosis requires 10 - 50 Mbps, up to ten times the minimum speed offered to rural users.

As a barrier to the uptake of high speed broadband services, the ComCom report does nothing to address this example of the rural/urban digital divide.