Thursday, 10 November 2011

Akamai State of the Internet: Canada still leads Australia (and here's why)...

The recently released Akamai State of the Internet Report shows that Canada is still leading Australia in all measures except the number of subscribers to connections of less than 256mbps. Here is a break down of the comparison from the Q2, 2011 report:







Despite the roll-out of the NBN and a policy focus on broadband, Australia still lags behind Canada. Will the NBN help Australia to "catch-up", or does there need to be a fundamental move away from the single national solution?

It is popular to believe that Australia has always been a "world-leader" in telecommunications outcomes. But not long after federation, things weren't looking too good. Here is a little snippet from Hansard in 1909. The "single national solution" wasn't working even back then:
With reference to your recent verbal inquiry as to how many new telegraph line extensions, apart from those along railways, have been provided in Queensland since the transfer of this Department to the Commonwealth... As every one is aware, Queensland has developed enormously during the past ten years... Yet every day I receive complaints of the telegraph system, and requests to try to get something done to improve the communication with Brisbane... Yet nothing has been done to cope with the increase of business, though all that would be necessary in cases like those, the poles being already in position, would be to fix more insulators, and put up new wires. Notwithstanding the public complaints, and my efforts, I cannot get the Department to move, and so desperate are my constituents becoming that some of them talk of voting against me because nothing is done for them. I ask the Postmaster-General to give us fair treatment.
Telecommunications remains a great "policy lever" for Australian governments, to be pulled in case of political emergency. Or not.

For example, the Royal Commission into Postal, Telegraph and Telephone Services (1910) found that sufficient funds to maintain the telecommunications network were withheld by the Treasurer to achieve other political aims in federal-state relations:
[T]he system of management is faulty, in that it permitted the Treasurer to assume financial control of services for whose efficiency he was not responsible.
This is more than just one historical flash-back where politics got in the way of the adoption of new technologies. And it wasn't necessarily the fault of Telecom Australia (back in 1982):
The present Government has rejected several of Telecom Australia’s attempts to enter new growth areas. These initiatives have included approaches for Telecom to be permitted to supply services such as facsimile machines, telephone answering machines, and videotex services. Telecom has also tried to obtain permission to market and supply under 50 line private automatic branch exchanges. Each of these initiatives has either been rejected by Government or not responded to...
The reasons why Telecom Australia was refused entry to the markets listed above appear to be political and ideological rather than a rational assessment of what the future requires for a viable and dynamic Australian communications enterprise.
Moreover, Single solutions take too long:
In 1998, the external territories and many remote communities on the mainland are still awaiting the delivery by satellite technology of many of the expectations of 1977 for instructional TV, telemedicine and digital data transmission.
Australians have always paid too much for these inferior services, too. And it isn't because of factors peculiar to Australia. According to the Productivity Commission (1999: xxiii):
  • Australia’s residential and business telecommunications prices rank about average among the countries benchmarked.
  • However, prices in the best performing countries are 20 to 40 per cent below Australian prices on a purchasing power parity basis in most major market segments.
  • The results are not sensitive to changes in assumptions about usage.
  • Further, the price performance gap is too great to be explained by factors outside the control of industry participants, such as technological change, input prices, taxes and geography.
  • An overall assessment of the evidence points to government involvement and intervention having a major influence on prices across the countries benchmarked.
My argument is not against government ownership per se, but against monolithic control by one particular government. So long as the provision of communications services remains purely a political (rather than a commercial) issue, Australia will always be behind other developed nations. And what's more, we'll continue to pay too much.



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