Australia Connected ... a political football?

Australia Connected ... a political football?

Summary: The government's Australia Connected program, it appears, is no longer an altruistic and long-overdue investment in Australia's infrastructure, but a political football whose primary purpose seems to be to send a massive "nyah-nyah" to the Labor party.Such is the price of progress in an election year.

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The government's Australia Connected program, it appears, is no longer an altruistic and long-overdue investment in Australia's infrastructure, but a political football whose primary purpose seems to be to send a massive "nyah-nyah" to the Labor party.

Such is the price of progress in an election year. Less than 24 hours after announcing a program that will change Australia's telecommunications industry forever, this very significant investment is already being weighed in terms of its political capital.

Consider what has happened here: Australia's government has finally removed its proverbial finger and launched a forward-looking plan to stimulate investment by carriers who just haven't seen the point thanks to Telstra's stranglehold on the last mile.

Nonetheless, with nearly AU$1 billion for Optus-Elders joint venture OPEL to fill out an alternative wholesale network, we are finally seeing an initiative that could break Australia out of the Telstra doldrums. If nothing else, Telstra may have to actually switch on all those ADSL2+ enabled exchanges that are sitting fallow while the company waits for competitors.

Pundits will be dissecting the policy for weeks to come, but two aspects of Australia Connected (the government's bush broadband policy) deserve special note.

Firstly, WiMAX wireless broadband technology is an excellent way of bypassing Telstra's crumbling regional local loop infrastructure. Australia will finally begin catching up to Taiwan, Korea, India, Pakistan, and myriad other countries that long ago figured out WiMAX was important.

Absolutely nobody will be able to connect to the networks at first, of course, since WiMAX gear isn't exactly common. But this will change quickly. Intel recently abandoned its 3G efforts in favour of a WiMAX module it will ship later this year. A WiMAX / Wi-Fi module due next year could well do for WiMAX what Intel's now ubiquitous Centrino chipset did for Wi-Fi.

The second exclamation point of Australia Connected is its pricing -- from AU$35 to AU$60 per month. This is less than most broadband services out there today, and should help the infrastructure reach critical mass as customers abandon their ISPs for faster, cheaper services.

If Australia Connected can actually put these services in the market at those prices, Telstra will have to stop pretending it can control the market through price-fixing and government-bullying.

There is now even less to like about Telstra's pledge this month that it would maintain a AU$59 per month -- 512Kbps -- wholesale service for 14 years if it won the regulatory changes it is asking for. Such a service is laughable now but would be absolutely irrelevant if Australia Connected plays out as expected.

Although it's certain to face its share of obstacles, Australia Connected is a fantastic development -- on par with drought-breaking rains continuing into their sixth month or Paris Hilton's coming release being postponed indefinitely after her stabbing a fellow inmate with the heel of a Manolo Blahnik. For the moment bask in the happy glow that is the promise of more bandwidth than you ever dreamed of.

Perhaps the most important lesson from all this, however, is what the launch of this program says about deregulation -- that it just hasn't worked as intended.

What do you think? Has Coonan the Broadbandarian changed the world of broadband for the better, or is this just more political smokescreen?

Topics: Broadband, Networking, Telcos, Optus, Telstra, NBN, Wi-Fi

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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22 comments
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  • Australia Connected

    The Govt doesn't seem to understand that we are in a global economic war being fought electronically. Instead of spending $11B on navy boats, they should be digging the trenches (so to speak) of the new national IT infrastructure.
    anonymous
  • Broadband distraction

    I agree that the need for good (fast) broadband infrastructure is important, but I suspect it is being used as a political football and as a way to distract attention from other issues that the Howard government would prefer not be discussed public just before an election - such as the disastrous state of our health system, the effects of their industrial relations legislation, not to mention the horrible mess that Howard has enthusiastically plunged Australia into in Iraq, for example...
    anonymous
  • Blog Bashers

    I subscribe, and read with interest each addition to Full Duplex and must admit, I find, for the most part, the contect to be insightful, thought provoking and balanced.
    I can not help but notice that since this blog left the hands of Renai LeMay, that comments regarding Telstra have been accompanied with blatant discontent.
    Am I imagining things?
    Has my frustatration at the inability for any party to come up with an agreeable solution to broadband in this country displaced my frustration for the telco?
    Or has this blog evolved past it's balanced beginnings into a piece which holds little or no regard for Telstra?
    I tend to think that their recent efforts have not been so bad, but then... it's not my blog.
    anonymous
  • WiMax only part of the solution

    The backbone would melt under the pressure if widespread WiMax was rolled out and people actually used the new bandwidth it made available (and you bet they will - whether for VoD/IPTV, YouTube, BitTorrent, or something else not yet invented).

    What is really needed is a mixed approach with FTTN and whatever local loop technology is appropriate to the locality. Wireless is great in some areas, particularly with low population density, but other technologies (particularly FTTH) will be more appropriate elsewhere (high density = lower rollout cost per subscriber higher total bandwidth)

    Unfortunately, none of the major players (politicians, Telstra, G9, etc) seem to have grasped this.
    anonymous
  • what no-one is considering

    Almost all of the attention on "broadband" has focuses on download speeds with no regard for the very slow upload speeds achievable. This severely limits what can be done and ignores trends in the rest of the world. I live in the bush and have used extensively satellite, microwave, and NextG. Apart from NextG being phenominally expensive, I can get 1.5Mbps download, but less than a pathetic 200kbps upload - hopeless for even the most basic videoconferencing and other real-time immersive interactive applications.
    anonymous
  • Competition

    Hoooray. We have some competition in Regional Australia.

    A lot of metro people will have no idea what it will feel like to finally be free of the chokehold of Telstra Wholesale.

    This is the best move ever in Australian Telecommunications.

    It fixes the big stuff up when they Sold Telstra with infrastructure.

    Finally, we can all see Telstra either compete, or GAGF! Both are ideal outcomes.
    anonymous
  • Broadband?

    You think $35 a month is cheap?? What are the downloads allowances? What are the setup costs fro the users?

    This is Howard attempting a quick political fix, not a considered approach to see what's best for us- the voters.
    anonymous
  • Season of discontent

    I am not bashing Telstra just for the sake of it -- they have done some very good things, particularly with the launch of Next-G.

    The problem is that Telstra are actively taking an antagonistic, lobbying-based and often completely out-of-touch approach to their business -- holding the Australian government, and Australian people, ransom because they were handed exclusive control of the only nationwide network with local termination points at every household and business in Australia. They are now refusing to upgrade that network unless they are given what amounts to monopoly control over that network.

    This is fine from a business perspective -- nobody can now expect them, as a fully commercialised entity, to offer uncommercial services -- but from a national policy perspective it is contrary to the entire purpose of deregulation, and really puts a spanner in the works for everyone else.

    Telstra have historically been great at delaying Australia's telecommunications network -- remember back around the turn of the century when they kept putting off ADSL rollouts despite the technology being well proven and tested? Remember a few months ago when Telstra decided it could offer faster broadband after all (which is bleeding obvious) -- but would only do so in exchanges where competitors had already set up?

    As I mentioned a few weeks ago, this is not all Telstra's fault; they are acting just as you would expect a company with a stranglehold over an entire country's telecommunications infrastructure would behave. It's the government's fault for getting caught in the obvious conflict of interest between having a majority share holding in a company, and putting in place legislation that would effectively serve longer-term goals (such as the broadbanding of Australia). Telstra has made clear it's not going to help in this -- which is their decision -- but they can't expect everyone to be happy about it.

    I will certainly herald Telstra's successes when I learn of them, but when it comes to this whole national broadband debate I haven't yet found anything to admire in their contribution.
    anonymous
  • What would be a 'cheap' price?

    $35 is certainly cheaper than most plans in the market now. It's also around the same that most people pay for standard telephone line rental.

    The high-end figure of $60 per month is even more indicative, since by definition that would be for a 24Mbps connection with what we can only assume would be market-competitive data allowance. A fibre-optic trunk node would have no problems handling this kind of traffic so this is an indication of how economies of scale can bring some reality into broadband pricing.

    What would you consider cheap?
    anonymous
  • I know the loser

    Isn't it odd that this (political) football has been bounced back and forth for some time, yet plans can be announced on the eve of calling an election. Call me cynical, but I thought the purpose of a government was to represent us (the people), not just indulge in oneupmanship! Just remember the distribution of many billions of dollars in previous budgets as 'tax cuts' (aka vote buying). I know the winner of the election will be the politicians. The losers will be the voters.
    anonymous
  • Was he an employee or share holder?

    David, Your criticism and comments are spot on. Keep it up.

    As an old timer (now retired and who pioneered the first commercial data comms in Australia), I have to wonder why anyone would defend the indefensible.. Telstra is doing what it has been doing for decades. It had a monopoly and wants it back. Our government screwed up with the T3 sale and has a right royal mess on it's hands. A mess neither the PM or any member of the cabinet, including the dumbest Comms Minister we have had in ages, knows how to correct.

    Keep it up, David. We need this type of real comment to sheet it home to those who think the sun shines out of Telstra's a*&se. It's no longer an Australian company with managers who care about it's citizens. It has greedy management who's only concern is the money it can leach from the citizens and users of an essential service.
    Huntsman.ks
  • Broadband To The Max

    [Be careful what you describe as 'by definition' David. Night, by definition, is when it's dark.]

    Certainly, as said above, a mixed solution is required by our diversified and extensive country.

    Few seem to say that not everything is possible in this land of ours. Do I have to be the only one to say that *some people will always be worse off*? Not everyone will get what they want, nor, indeed, what some others have! Call it discrimination, favouritism or copping out, if you will, but that's infantile. There are still some eternal verities in this life: super access everywhere is just impracticable. It's a wide, brown land.

    Someone recently compared our broadband to that of Estonia! I quote:
    """You know, in Estonia, they have high speed broadband internet covering the entire country, and their government has made access available to the whole population [for] FREE!!."""

    Jeezus, bluey. I thought you were sensible.
    Ok, you're prolly joking about selling up but have a look at this from The Dreaded CIA Fact Book:
    Austraya: Area: total: 7,686,850 sq km. SEVEN AND A HALF MILLION.
    Estonia: Area: total: 45,226 sq km (0.07% !!!)
    Finland: Area: total: 338,145 sq km (0.59% !!! Mostly reindeer country)
    South Korea: Area: total: 98,480 sq km (1.28% !!!)
    But people actually say these things. Sheeesh.

    How many millions of kms of roads do we have in this country with a little farm tucked up the far end of most of them? A fair few million I tell you.

    AND, why SHOULD the country have the same services the cities have? Should it be compulsory to have a Coles supermarket at the junction of every three roads? A hospital? A fire brigade? Piped water? A hairdresser? Sheeesh.

    Okay, if you should, can we in the city have our real estate prices subsidised by Barnaby Joyce and his mates? And de-ionisation plants that remove the particulate matter and noxious gasses from our air to country standards? That'd be equitable. Grrrr.
    anonymous
  • minimum service is also a problem

    You are right that country subscribers should necessarily not expect the same services as city subscribers, and there are many differences between the city and the bush that go beyond telecoms.

    However, it is appropriate to ask what the minimum standard should be for anybody. I don't want to descend to bandying about the term "third world' (people who use that expression generally have absolutely no idea what life is like in third world countries), but it is reasonable to expect a baseline for all Australians that is typical of other developed countries - particularly as the Internet becomes central to a wide range of e-biz and e-gov services.

    IMO, the baseline is at least wireless or wired broadband (as pointed out I think by somebody above, satellite has packet latencies that break many things). Dial-up is only marginally useful today, much less the future, yet is all that is available in many places.
    anonymous
  • Yes, blatant discontent

    I would think that we are now at the stage of blatant discontent with broadband in this country, and Telstra is really a big part of broadband in this country. There needs to be MORE blatant discontent!
    anonymous
  • Telstra psyche

    The best route to great telecommunications is to get healthy competition from SP's. However,the biggest hurdle is to get Telstra to compete fairly for the public benefit. Currently, the "Pancho & Perry" show running on Telstra PR with American actors assumes that we are either gullible and or need to be bullied into the Telstra solution to our telecommunications services.. We can't afford to let Telstra dictate market prices for telco services.Furthermore, we don't need Telstra or any other telco to be fixated by the notion that all parts of its organisation, especially personnel,be subservient to the shareprice god.
    As to share prices, it is interesting to speculate on the possibility of a healthy rise if it were announced that Telstra heirarchy had to have timed toilet breaks too!
    anonymous
  • You noticed that too

    Not a week goes by without the Government making some "finally" announcement (the latest being with Aboriginal communities), on something that they should have been doing all along with the massive budget surpluses and 11 years in office. I wonder how much of this would materialise if there wasn't an election later this year.
    anonymous
  • It's not just a business issue

    "nobody can now expect them, as a fully commercialised entity, to offer uncommercial services"

    That's exactly what the ACCC and the government do expect Telstra to do. A company without a profitable business plan will go broke and Telstra knows it.

    Both sides of Australian politics neglected telecommunications infrastructure for decades before Telstra became a private company. It's easy to bash Telstra but Australian political parties created this mess from day 1.
    anonymous
  • Competition in the Telecommunications Market

    It is obvious to most that a truly competitive market drives performance up and costs down. As Australia is a Developed Nation, continuing on its path as a Clever Country, our global competitiveness more than ever depends on affordable and efficient voice and data communications.

    To date limited competition has existed particularly in areas where there is only one Wholesale Provider supplying the down line resellers.

    Dare I say it, with 39 years in the industry witnessing industry market changes the one that stands out relevant to this topic is the transformation of the old PMG to Telecom then later becoming Telstra. It appears throughout these transformations a continued proliferation of a less than competitive market pricing strategy, one that could be mistaken as a Plunder and Pillage Philosophy, (because they can) survived and flourished.

    It is my belief that the ONLY LOGICAL Telecommunications framework to promote is one that enables an environment in which multiple Wholesale Providers can successfully compete. The benefits of stronger competition at the Wholesale level, flows via down line resellers to the end user.

    No matter what political persuasion one has, it should be obvious that a plan to Sink, sorry subsidise approximately AU$4.7B into a FTTN plan developed and administered by the major incumbent (Telstra) would more than probably represent another step back to the predominantly monopolised wholesale position of yesteryear. How would that assist?

    Conversely any plan that subsidises other private enterprise(s) into the wholesale space provides the opportunity for competition with its follow-on cost and performance benefits

    Australia Connected appears to be positioned to do just that.

    Should we be grateful to Telstra for its pledge: .... Telstra's pledge this month that it would maintain a AU$59 per month -- 512Kbps -- wholesale service for 14 years if it won the regulatory changes it is asking for.

    I already use a competitors service(s) (iiNet ADSL2 DSLAM Network) supplying between 12-24Mbps down and 1Mbps up at $59.00/month.

    14 years?,. 4, 4, 14 years, What?, What did you say?

    To think that anyone could consider this as anything other than an incumbents last ditch lock in effort, on what is even now an outdated service priced at an already disproportional high cost, is laughable.

    Would not one expect this outdated type of service to decrease in cost over the forthcoming years? Conversely why on earth would one expect it to increase in cost? Should it not be replaced with more cost efficient services as and when available?

    Thank you, this pledge has provided a VERY GOOD example of why Telecommunications backbone infrastructure in this country MUST NOT be left in the incumbents hands alone.

    As a member of the small business fraternity (Blue-Wireless Pty Ltd) involved in the development and marketing of VoIP Telecommunications software solutions (ranging from SOHO 4 users to ITSP over 500,000 users), any plan that creates a more competitive market has my vote.
    anonymous
  • FOOTNOTE TO: Competition in the Telecommunications Market

    The first two attempts to load/submit my comments produced failure error messages on the Web Browser however have loaded with formatting character errors. Hence a third successful attempt was made after removing single and double quotes,
    anonymous
  • So the system works?

    So, what you're saying is that the government is responding to the populace due to an impending election?
    Are you complaining that democracy works?
    anonymous