Friday, 20 March 2009

Issues in defining 'broadband' and 'competition'

According to IT News:
Agile Communications has announced a $3 million project to equip exchanges in Victoria and South Australia with broadband services that operate at up to 8mbps speeds that aren't being matched by Telstra.
Meanwhile, Telstra is suggesting that 8mbps via ADSL is really only a theoretical speed which varies with the distance from the local exchange. Telstra has also suggested that competition in broadband services can only be 'legislated competition' as no other firm has Telstra's capacity.

I tend to agree with Telstra's view, as I have argued elsewhere, but there is an alternative approach to competition which does not rely on destroying a world-class Australian company. Telstra's offshore interests are significant in that the company has a capacity to expedite technology transfer from its offshore operations. Breaking up a globally competitive company because of domestic peculiarities seems an unnecessary consequence of poor government policy which effectively handed a domestic monopoly to private interests a few years ago.

There is an alternative approach which would see the development of local and regional networks and this is an area where governments at all levels have a role to play. Local and regional initiatives may not provide universal access to faster broadband services, but I am convinced these are better than attempts to run out a single national solution. The local approach would enable local solutions to local communications problems.

To date, the only real attempts to alleviate areas of market failure have been to provide funding to businesses where subscribers in remote areas have requested service. This piecemeal approach has clearly not worked to date. Canada's approach enabled local communities to submit proposals for local solutions and ideology played a lesser role than in Australia's 'funding-to-businesses only-on-subscriber-request' model.

A visiting Canadian researcher I met recently remarked that broadband in Australia and New Zealand is significantly slower than in Canada. This points to the significance of our definition of 'broadband' when comparing one country to another.

I am completely biased toward the benefits of broadband, but the Brits do not agree! In the United Kingdom, 40% of the population do not have high-speed broadband connections, and of that group, 55% do not want high-speed broadband at all. A smaller proportion can't afford it. I need to investigate a little further, but I suspect that the definition of 'high-speed' broadband is significantly higher in the UK than the typical 1.5mbps available via ADSL in Australia.

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