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May 6, 2008
As Mark Pesce observes that the cities we live in are no longer streets and buildings, but flows of people and information, each invisibly connected through pervasive wireless networks. Our world is already a wirelessed world and we use it to maintain our social networks, business and entertainment.
Free wireless in Sydney, which would have enabled a broad participation in the electronic life of the city by all participants, has been dumped by the NSW Government. So we are left the tariffed telco and IP networks and a few free wirelessed broadband hotspots.
With the latter, it increasingly looks as if the proposed fibre to node (FTTN) broadband network will be one with competition at the services level, but little competition at the infrastructure level. The national broadband infrastructure will be provided by Telstra, as it looks uneconomic to provide a duplicated infrastructure.
If Telstra is the only option for building the national broadband network (NBN), then it does not appear likely that Telstra will be structurally separated into a wholesale business and a retail business to prevent monopoly behaviour. It also looks as if the private investment in broadband will be for the metro areas, with the national government required to subsidize broadband for rural and regional Australia.
The implication of these political and economic realities is that national retail broadband prices will probably rise should Telstra construct a monopoly-owned FTTN network. Telstra will act to feather its own nest. The market logic is clear: a privatised Telstra would pursue its shareholders interests, the goal of which would be to maximise its monopolistic position in the market to ensure a good return on its investment.
Tasmania shows how it is done in terms of transmission costs across Bass Strait when broadband backhaul capacity across Bass Strait is limited to a monopoly supplier. This highlights the incompetence of the Lennon state government in ensuring that broadband infrastructure underpins Tasmania’s social and economic future. So Tasmania remains a digital backwater.
Given these realities there is a need to develop a regulatory regime aimed at reining Telstra in. How can this be done to ensure that in seven years we are not in an identical situation to today?
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Gary
The futurist Mark Pesce has called for people to create a free wireless network. The free wireless group hopes will one day cover Sydney and make it easy for anyone to enjoy the convenience of free internet access. San Franscisco is the working model.
They are known as Sydney Free Wireless, the group is using cheap Meraki mesh network technology from a Google-backed US start-up called Meraki to start a network of free neighbourhood wi-fi hot spots and promote such services through a grassroots campaign.