Conroy considers Australian govt-owned subsea cable

Conroy considers Australian govt-owned subsea cable

Summary: In an unusual speech delivered in the US this week, Conroy has indicated that the Australian government may consider rolling out its own subsea cable if prices don't go down.

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In a speech at the Columbia Institute for Tele-Information Conference in New York on Monday, Communications Minister Stephen Conroy said that Australians are charged too much for international capacity on subsea fibre-optic cables, and that the Australian government is looking to do something about it.

As first reported by Communications Day, Conroy was responding at the time to a question about the US government's proposal to charge traffic going in and out of the US the same 15.7 percent tax on revenue from end users that it currently charges between US states.

"There is no justification for a new charge between countries. We are already paying an exorbitant amount of money," he said.

"I've often said that if the international market doesn't improve — it's AU$250 million out of a budget of AU$40 billion — I'll build a new pipe to the US to drive prices down if they don't start responding to market pressure."

Conroy said that because there are a couple of prospective commercial projects, he hasn't "wanted to leap into the international connection market" just yet.

The minister's comments come almost two months after the proposed Pacific Fibre cable between the US, Australia, and New Zealand fell over. iiNet and Vocus have already moved to secure extra capacity on the existing Southern Cross Cable, and Vocus CEO James Spenceley told ZDNet at the time that he thought the prices for capacity would be stable for the time being.

Red underpants?

Conroy also used his speech to boast about the amount of power the Australian government has over the telecommunications industry.

"We are in the fortunate position that the regulation of telecommunications powers in Australia is exclusively federal. That means I am in charge of spectrum auctions, and if I say to everyone in this room 'if you want to bid in our spectrum auction, you'd better wear red underpants on your head', I've got some news for you. You'll be wearing them on your head," he said.

Conroy said he has "unfettered legal power," but that he sees this as a great responsibility for the government.

He indicated that the government will seek to free up extra spectrum, aside from the digital dividend, to cope with the rise in mobile network traffic. He also admitted that the fixed versus wireless debate "still gets a big run" in Australia, but said that people need to realise that the AU$37.4 billion National Broadband Network (NBN) will get a vast proportion of traffic from wireless.

"If you want to think of the NBN as the biggest backhaul for a wireless network, go for it."

Topics: Government, Government AU, Government US, Networking, NBN, Australia

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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Talkback

14 comments
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  • Hey Malcolm...

    A "white sea elephant"...
    RS-ef540
    • You wouldn't remember the last Labor submarine

      Read up on the Collins Class subs and the waste of taxpayers dollars they've been.

      Another superb Labor initiative;-)
      Richard Flude
      • sigh...

        If we didn't know better Richard we could mistake you for a trolling, wing nut ;)
        RS-ef540
  • Conroy goes tropo in US?

    Let's first account for the $50 billion NBN.
    Vasso Massonic
  • This government is unbelievable

    Conroy has gone made with power; forget the market Labor know best.

    The sure like gambling with other peoples money.

    A valuable insight the poor quality of the whole NBN decision making process.
    Richard Flude
    • "forget the market Labor know best"

      It's not a case of labor knowing best, it's a case of anyone but the market knows best. The market has had their chance and have failed dismally thus the need for the NBN. Hope that helps.

      "A valuable insight the poor quality of the whole NBN decision making process."

      If you want to talk about the "poor quality" "decision making process" let's talk about the poor quality of the decisions made that necessitated the need for the NBN and NBNco to be formed in the first place. Topic of the day: Selling Telstra. Go.
      Hubert Cumberdale
      • Consumers benefited massively from introduction competition

        in telecommunications in all areas; fixed line, mobile and data.

        Telecom and Telstra monopoly offerings were restrictive and overpriced.

        From 1996-2003 telecommunication infrastructure cost FELL in real terms by 17% for households, 29% for businesses (PC IR #33). Both the quality and variety of offerings exploded; all of the best prices/services are not with Telstra (though their finally coming around under Thodey).

        To argue consumers didn't benefit from competition over the past two decades is ridiculous.

        For those without experience of the old Telecom you'll be able to enjoy it with the NBNCo (greenfield sites already are);-)
        Richard Flude
        • "Telstra monopoly offerings were restrictive and overpriced."

          Wow, that is simply some amazzzzzzzing insight. I wonder why (not really)



          "To argue consumers didn't benefit from competition over the past two decades is ridiculous."

          They did (but not quite as much as you like to think) and you can thank retail competition for that. More proof wholesale and infrastructure competition is pointless. Keep in mind if it was up to Telstra since they were sold they’ve tried to milk as much as they can out of consumers so they would have been happy if we simply stayed on "dial-up" and "2G mobile". So who do you think are the ones who will benefit the most from holding up progress yet again and going with a FttN patchwork? Hint: Telstra. Now you finally understand why we need the NBN.
          Hubert Cumberdale
          • Retail...

            Indeed HC, but retail competition previously, in urban areas only... our friends in the bush simply had Telstra.

            But with the NBN, it has already been inadvertently acknowledged by the nay sayers previously (when trying to talk down the NBN...LOL) that there will "only" be 4 or 5 Australia wide RSP's. Err, giving those who now only have Telstra 3 or 4 more choices...

            Of course in urban areas there will still be many more, including a few new comers already.

            Seriously no one (apart from those on some selfish agenda) care who owns the infrastructure... as long as it's policed aptly and retailers are plentiful. Let's be real here, when anybody buys anything, they don't care who the distributor is or if the distributor is a sole distributorship, they go to retailers and pit these retailers against each other...

            Funny how those how trumpet private enterprise, refuse to acknowledge this?
            RS-ef540
        • Todays contradiction

          So both Richard/Visionary is/are telling us how terrible things were when Telstra had control over Australia's comms.

          Yet vehemently oppose the NBN which has taken the reins away from Telstra and support the opposition's alternative of simply handing it all back to Telstra again, via FttN.

          Que :/
          RS-ef540
  • Our Strange Minister of Communications & the Digital Economy

    Aside from a apparent strange fetish for red underwear (male or female, not sure) our Sen Conroy wants to own a submarine cable. A natural extension of the NBN I suppose.
    Good grief, Hubes thinks selling Telstra was a bad idea, how quick some forget the high prices, lack of innovation that was a hall mark of the monoploy owned telco. I suspect we would all be on dial up still and 2G mobile (if we were lucky) if Telstra had not been sold.
    Blank Look
    • Part one yes... Part 2 no

      Part one of you comment - I agree. That was without doubt one of the strangest comments I've heard from any politician :/

      Second part... this is why there's the SAU overseen by the ACCC...

      From Computerworld - "... the revised SAU freezes wholesale prices of the NBN products for five years. For the next 25 years, annual price rises on all products and services would be limited to 1.5 per cent less than inflation, with the goal of wholesale price reductions over time."

      But of course such "evidence" simply can't be trusted and should be yypically dismissed eh?
      RS-ef540
  • LOL. "visionary" here thinks selling Telstra was a great idea. Apparently paying exorbitant prices for a pittance to download and at "breakneck" speeds such as 256kbit was actually groundbreaking, yep only selling Telstra could achieve such innovations. yeah that happened AFTER Telstra was sold not before. How quick some forget indeed. Never mind the fact that proper ISPs had to bring Telstra and their clueless stone age customers kicking and screaming into the new century either.
    Hubert Cumberdale
    • Hubes, ?

      Kindly read my post again, you appear to have misunderstood the point.
      Blank Look