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broadband in the slow lane « Previous | |Next »
April 8, 2006

Broadband is a joke in Australia. As David Crowe points out in this weekends Australian Financial Review broadband is slow, expensive and has many hidden metering charges. So affordibility is very low. Little is being done to address this, even though various studies show that communities with broadband created more jobs, enjoyed higher property values and formed more businesses than communities without broadband.

The Howard Government's response is to rely on quarrying Australia, drafting broadband plans for regional Australia, identifying Broadband with Telstra whilst ensuring an enfeebled regulator, and saying that things are working well. Australia does not have a national telecomunications policy, and it has put off developing one since the 1990s.

Now Telstra may have a hip telecomunications website, and it understands the significance of the emerging digital world, but it continues to cap the speed of the digital subscriber network, and won't invest in higher speed infrastructure until there is lighter regulation about opening its DSL network to its competitors. As things stand now, Telstra is stifling the market by restricting both the speed and the amount of data that can be downloaded, so that it does not have to invest in extra network capacity.

Update: 9th April
The United States Trade Representative has sharply criticized Telstra for its anti-competitive practices and attempts tio undermine the authority of the ACCC in its 2006 annual review of the operation and effectiveness of telecommunications trade agreements, the "Section 1377 Review."The Review says:

Telstra has also unilaterally set a high, nationally averaged rate, arguing that it needs to cross-subsidize rural services with above-cost urban rates. The likely effect of this new tariff, if Telstra’s appeal to the DCITA succeeds, will be to preclude competition based on unbundled loops in the geographic areas that competitors want to serve. Given the effects on competition of Telstra’s proposed average rate, Australia should consider other mechanisms to address rural service issues, such as expanded use of a competitively-neutral universal service fund.

More pressure on the Howard Government to ensure competition in the telecommunications industry. Harry Clarke says that:
Providing close to universal access to high speed, low cost broadband would give the Australian economy a long-term boost and overcome disadvantages of being a large, sparsely-populated country. The Australian Government should bite the bullet and negotiate the minimum transfers necessary to drive this investment in our long-term future.

That implies a national telecommunications polcy doesn't it?

| Posted by Gary Sauer-Thompson at 12:24 PM | | Comments (2)


Think your're right about this. I have two family members who work for telcos. One for Telstra, the other for Optus.
There is no doubt that Optus are better value but throttled by Telstar's lack of imagination.
Every year I get an update from one of the big wigs in Telstra inviting comment on their service delivery. I reply and tell them it is crap, and expensive crap at that.
Haven't had a reply yet!
My source in the big T tells me that they have instructions to do what ever they can to retain customers. I think they are in panic mode.
I tell my source "Tell them their broadband is crap, and expensive crap at that." I don't think they want that sort of feedback!!

To be fair to Telstra we should acknowledge that people in Canberra and across the nation want Telstra to invest more in its infrastructure, but they are unwilling to give Telstra a sweeter deal on regulation.

In August last year Trujillo offered to spend $3.1 billion on an optical fibre network in the cities if the governemnt would chip in another $2.6 n billion to extend it to the bush.

Trujillo skewered the deal as he wanted big regulatory concessions and the Govet refused because that would have meant cementing Telstra''s dominance.

Telstra also offered a broad band fibre netwwork offering speeds of more than 12 megabits per second to more than 55% of the nation in return for regulatory concessions. Trujillo was turned down on that too.

As things stand the emphasis is to force Telstra to open its network to its competitiors so they can amass enough scale to build their networks.

The operational/structural split of Telstra into network that stays in public hands and commercial arm has been rejected by both the Howard Government and the ALP. That means investment incentives must be provided to get business to invest in infrastructure. Those incentives are not there.

So we don't have a federal strategy other than Canberra deciding to give Tesla the regulatory breaks it wants.