Tuesday, 17 February 2009

The Importance of Local Councils (Municipalities) in Broadband Deployment

When I first commenced my comparison of broadband deployment in Canada and Australia in 2005, the extent of municipal involvement in the deployment of broadband infrastructure in Canada was striking. Under Industry Canada's leadership, the Information Highway Applications Branch ran the Community Access Program and was responsible for a program of market aggregation which enabled a rich mix of community groups, businesses and municipalities to submit Request for Proposals (RFPs) to develop broadband networks. The use of 'anchor tenants' such as schools, hospitals, and libraries to deploy networks which could then be accessed by communities was a major difference to the Australian approach. In addition, innovative companies such as Xit telecom in Trois Rivieres, Quebec, challenged the big players on the convential wisdom of dark fibre tariffs and worked with local communities to deploy non-legacy networks using innovative combinations of dark fibre and wireless to connect people living in areas of market failure.

Yet when Telstra chief Sol Trujillo suggested that local councils in Australia should be involved in broadband deployment, and offered to share the cost (with councils) of deploying broadband networks, he received a resounding 'but we don't do that'. Since this time, my research has focused on understanding why Australia does what it does, in comparative perspective with Canada, in formulating communications policy. It seems that local councils are specifically excluded from obtaining federal government funding for broadband deployment - it must be a business which receives the money. The then dominant orthodoxy of private sector superiority informed the policy - not the needs of citizens who were 'crawling along the information superhighway' - and areas of market failure were not addressed in any coordinated fashion.

There are numerous institutional differences between Canada and Australia which no doubt explain some of the differences in broadband outcomes. For example, many Canadian municipalities owned their own electricity systems which operated telecommunications subsidiaries and provided what some bloggers refer to as 'local net-neutrality' enablers. But things are changing in Canada too - Telecom Ottawa, once one of the largest municipal-owned broadband providers in North America, has now been sold to private interests. This seems to counter the logic which the OECD is now proclaiming.
Significantly, the most recent OECD report on broadband growth indicates that:
'Governments should not prohibit municipalities or utilities from entering telecommunication markets. However, if there are concerns about market distortion, policy makers could limit municipal participation to only basic elements (e.g. the provision of dark fibre networks under open access rules)'.
While The Economist is warning of a return to economic nationalism, the role of municipalities in broadband deployment has been over-looked. Moreover, Canada's rich telecommunications mosaic may well explain why Canadians have been enjoying faster and better access to broadband than Australians - local solutions address local problems. Changing the Australian policy regime may be impossible, however, given the resiliance of the Australian way of doing communications policy.

References:

De Percy, M.A. (2008) 'Broadbanding the Nation: Lessons from Canada or Shortcomings in Australian Federalism?' in Butcher, J. (ed) (2008) Australia Under Construction
nation-building — past, present and future.
Canberra: ANU ePress.

Organisation for Economic Cooperation and Development (OECD) (2008) Broadband Growth and Policies in OECD Countries. Paris: OECD.

Wilson, K.G. (2000) Deregulating Telecommunications: U.S. and Canadian Telecommunications, 1840-1997. Lanham, MD: Rowman & Littlefield.

Creative Commons License Except where indicated otherwise, Le Flâneur Politique by Michael de Percy is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 Australia License. Based on a work at politicalscience.com.au. Background image ©Depositphotos.com/ @redshinestudio