Social Capital: The Cause and Effect of Broadband

Social capital, when defined as the 'networks of relationships among persons, firms, and institutions in a society, together with associated norms of behavior, trust, cooperation... that enable a society to function effectively' (1), has noticeably diminished in Australia. Paul Kelly's (2) concept of the Australian Settlement, although often debated, challenged and refined by Australia's best in the Australian Journal of Political Science, outlines one of the key factors which has helped to diminish this capital: state paternalism. State paternalism for my purposes here refers to Australia's persistence in seeking single national solutions to problems which are best dealt with at a local level (3) - an attitude I regard as a relic of Settlement. And, funnily enough, state paternalism, which diminishes social capital, is also causing Australia to lag behnd the rest of the developed world in the infrastructure which actually enables the networks necessary for building social capital: broadband.

While conducting research in Ontario, Quebec, New Brunswick and Nova Scotia to discover why Canada is fourth in the OECD (4) for broadband outcomes (5), it was readily apparent that Canada's federal system is inherently rich in social capital. Communities with poor or no broadband access could approach businesses, civil society organisations and all levels of government to lobby for solutions. Indeed, various municipal, provincial and federal solutions have helped to maintain Canada as a leader in global telecommunications and where these solutions have not been forthcoming, some communities have decided to build and maintain their own networks! It is not a national single solution which has kept Canada at the head of the pack, but 'full participation of all interested parties', enabled by a transparent regulatory framework with a focus on 'consensus building' in developing and implementing regulations (6). Further, federal government programs helped to educate communities in policy processes while aggregating demand to attract private sector solutions, creating additional social capital in the process.

Meanwhile, back in Australia, state paternalism from both major parties left voters with a choice between two shades of grey: a national solution with mostly private sector solutions or a national solution with slightly less private sector solutions. But neither of these 'solutions' address the shortcomings in social capital which is both the cause and effect of sound broadband outcomes. While state paternalism persists, Australians will simply get the Settlement regurgitated and repackaged with modern wrapping. This attitude is so deeply ingrained that even attempts by federal governments to involve the private sector result in government simply handing over the Settlement to business while the 'disinterested' citizenry follow along (usually only out of curiosity) until there is enough public outcry. The bottom line is that the Dark Decade of luddism and neglect of social capital, super-imposed on the persistent Settlement attitude of state paternalism, have left Australia in a deep hole. Until governments entrust people to be involved in transparent policy-making processes, tired old 'national solutions' will keep Australia at the wrong end of the OECD broadband rankings. It is time a new approach, specifically localised infrastructure solutions, are trialled to improve broadband outcomes. National solutions haven't worked and to persist with the same old policy is, well, as the saying goes: 'When you find yourself in a hole, stop digging!'

(1) In Deardorff's Glossary of International Economics, see
(2) Kelly, P (1992) The end of certainty: The story of the 1980s. St Leonards: Allen & Unwin.
(3) Gans, J. (2006) The Local Broadband Imperitive: Appropriate high-speed Internet access for Australia. Melbourne: CEDA
(4) OECD (2007) OECD Communications Outlook 2007. Paris: OECD.
(5) That is, access to (penetration) and speed of the relevant broadband services.
(6) OECD (2002) Regulatory Reform in Canada: From transition to new regulation challenges. Paris: OECD.