Thursday, 15 May 2008

Broadband Budget 2008

Nation-building is back on the agenda and the very capable Sir Rod Eddington (1) will lead the mammoth task of remedying the mistakes of the decade in which Australia forgot to build infrastructure. Nonetheless, broadband seems to be in a state of flux, with nobody really sure of where it fits in with the nation-building project. I am convinced this is because politicians, policy makers, businesses and community groups are struggling to come to grips with a ‘viral’ communications network which spreads ‘virally’ when left to its own devices. Much like the economists’ free market mantra, ‘free’ networks tend to resist central control and will connect people who want to be connected if only these networks are allowed to do so (2). Kevin Rudd, when talking about the nation-building project during the election campaign, referred to nation-building in the 19th century as all about building railways, whereas in the 21st century it was all about building broadband networks. The trouble with this analogy is that broadband is not a railway, it is an entire transport system (3). But at least it is more palatable to hear about broadband from Stephen Conroy than it is to hear from the likes of Bill Heffernan who claimed to have ‘never sent an e-mail in [his] life’ (4).

A perusal of the 2008 Portfolio Budget Statements for the appropriately-named Department of Broadband, Communications and the Digital Economy (5) indicates that a coherent plan is in place. First, $4.7 billion has been allocated for the National Broadband Network in an attempt to bring 12 gigabyte broadband connections to 98% of the Australian population. Second, the remaining 2% of the Australian population will have access to the additional $271 million which extends the existing Australian Broadband Guarantee. This Guarantee is designed to subsidise a ‘metro-comparable’, 512kbps download/128kbps upload data speed, minimum 1 gigabyte per month download limited connection where the cost exceeds $2,500 per year (approximately $208 per month). Hardly ‘metro-comparable’, but such a connection is better than nothing if you happen to live in the middle of nowhere.

Last week I had the opportunity to address the Regional Telecommunications Independent Review Committee (6) at a public meeting in Sydney. At this meeting, I presented early research findings from my comparison of broadband infrastructure deployment in Canada and Australia. My major thrust was that greater community involvement led to greater connectivity, but the Australian way of ‘doing’ communications policy tended to limit the involvement of citizens and therefore their ability to communicate using broadband technologies. Somewhat to my surprise, my presentation was well received not only by the committee but also by the participants who were mostly representatives of a wide range of rural community groups. These groups presented many stories about how local efforts to utilise broadband networks had worked quite well until ‘Big Brother’ had taken away their right to use the network, and also how they had been regarded as ‘fools’ by authorities and other ‘people in the “know”’ when they complained about specific telecommunications problems in their local areas. While I was pleased that the anecdotal evidence confirmed my research, I was particularly appalled at how my hypothesis was substantially proven by the lived reality of these very passionate and capable representatives from ‘the bush’.

I would never pretend to have all the answers on broadband, but one thing is very clear. The centralised control of communications networks will help the federal bureaucracy to control how the federally-funded network is used - even more so the winner of the $4.7 billion tender. The problem is that people won’t use the federally-controlled communications network unless it is free to be used in a fashion in which people get to choose how they use it. In the meantime, it appears that the $4.7 billion federal investment in the National Broadband Network will go to one of either two major competitors (7) who do not have ‘open access’ as a major goal. The paradox really gets up my nose in that the typical economist’s free market dogma is driving the approach to broadband infrastructure investment being ‘open’ to ‘competitive forces’, whereas communications networks are conveniently excluded from the same ‘free trade’ dogma.

Free trade was originally intended to circumvent those unscrupulous people who made profits (through measures such as tariffs and tolls) by controlling the transport routes which enabled the real business of trade in goods and services. Well guess what? The Internet provides the modern conduit for trade, but it is the unscrupulous people who are applying the tariffs and tolls again! So while the anti-‘open source’ crowd make claims of the ‘communism’ associated with ‘open networks’ (8), the free-traders are decidedly absent from the broadband debate. Maybe the 'free trade' ideology has proven to be self-serving after all? Or maybe my 'inadvertent' collection of toll receipts (9) (from the supposedly simple trip from Canberra to Sydney which still burns a hole in my wallet) was such that I couldn't help but think it is time for a new type of 'free trade' debate. Or maybe the old free traders have just been around for so long that they have forgotten about the tyranny of tolls and tariffs which fuelled their cause originally? Anyway - it's like preaching to the choir here - the people who need to know simply don't know about broadband :( and the free traders who [intellectually] should have been involved in the debate all went the way of Howard and Edmund Burke! (10).

(1) Albanese, A. (2008) ‘Sir Rod Eddington Appointed to Head Infrastructure Australia’. Media Release. URL: (Accessed 14 May 2008).

(2) Rhodes, R.A.W. (1996) 'The New Governance: Governing without Government.' Political Studies. Vol. 44:652-67.

(3) de Percy, M. (2008) ‘Broadbanding the Nation: Lessons from Canada or Shortcomings in Australian Federalism? In Australia Under Construction: Nation-building past, present and future. Canberra: ANU e-Press. URL: (Accessed 14 May 2008).

(4) Burke, N. (2007) ‘PM's right hand man asks: what's email?’ The Daily Telegraph. URL:,23599,21434598-421,00.html (Accessed 14 May 2008).

(5) Department of Broadband, Communications and the Digital Economy (2008) 'Agency resources and planned performance'. Canberra: Commonwealth of Australia. URL: (Accessed 14 May 2008).

(6) Regional Telecommunications Independent Review Committee (2008) ‘A review of the adequacy of telecommunications services in regional, rural and remote parts of Australia’. URL: (Accessed 14 May 2008).

(7) Australian Associated Press (2008) ‘$4.7bn for national broadband network’. URL:,25479,23694523-14327,00.html (Accessed 14 May 2008).

(8) See Blankenhorn, D. & Rooney, P. (2005) ‘Is open source communist?’. URL: (Accessed 14 May 2008).

(9) Any outsider who drives through Sydney these days will be appalled by the highway robbery which is performed with the use of 'legitimate' yet confusing roadsigns which all read "e-Pay only this way" until you inadvertently end up at a toll booth where you get to pay about $5 for the privilege of being lost in a maze of poor signage. Why the equivalent of the 1789 French Revolution (to the power of 60 billion) hasn't occurred yet in Sydney is beyond me. But still, it is way cheaper to drive the 260 km from Canberra to Sydney and return, even taking into account the minimum $20 parking per day (and don't forget those 'inadvertent' tolls from your friendly NSW highway robbers!), than it is to spend the average $250 return flight (without counting the $80 taxi fare each way!).

(10) Howard's claim that the Liberal Party was a combination of the philosophies of John Stuart Mill and Edmund Burke would have had no impact upon Burke whatsoever (he accepted the American Revolution while denying the legitimacy of the French Revolution and would no doubt have empathised with Mr Howard) but would make J.S.M. (a fan of 'combinations' or unions) roll in his grave!

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