Conroy considers Australian govt-owned subsea cable

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.
Written by Josh Taylor, Contributor

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."

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