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August 23, 2005
The forgotten people
We know that our Minister for Selling Telstra, Senator Coonan, has an awful lot on her mind as she prepares to chair the first meeting of the Online Council in Perth - a forum designed to get the States to cough up a contribution to the $3.2 billion regional communications fund.
We think that it's a jolly good thing indeed to spend $3.2 billion fixing regional communications - although somehow we suspect it's going to take more than that to do the job - but we'd just like to point out to the minister that, due to the brilliant management of Telstra and the inspired administration and planning of Senator Richard Alston, and some of his Labor predecessors, there's a lot more Australians who cannot get broadband connections.
These are the forgotten people. They live in an unimportant part of Australia known as "the city". There are untold thousands of them, living in suburbs that you'd never dream were centres of neglect.
There are several reasons for this neglect. They include the fact that Telstra continued to deploy antiquated technology like RIMS and pair-gain systems long after it knew, or should have known, that it shouldn't be installing the stuff, and the government let it get away with it.
That aggravated the appalling waste of both Telstra and Optus being permitted to lay out parallel cable networks which bypassed significant population areas. While some of those areas have since been covered by ADSL, the fact that there's a physical limitation on the range of an ADSL signal means a lot of people not all that remote from the GPO are still restricted to dial-up.
Even those who do have ADSL and cable have nowhere near the speed of connection that other countries routinely regard as broadband. What we have here is "almost broadband" or "pretend broadband", which makes the figures on international broadband penetration compared to total Internet use in today's Financial Review even worse than they look.
The fact is, Australia doesn't even appear on the chart, because it's No 22 in the world, behind countries like Iceland and Portugal.
Part of the reason for that is that, having focused on the sole telecommunications agenda of flogging off Telstra for as much as possible, the Federal Government has done anything but promote competition. OECD figures show a wholesale failure of the government's regulatory regime. Facilities-based competitors to Telstra broadband have a combined market share of less than 20 per cent - compared to more than 60 per cent in the US.
If you accept the Telstra spin, the regulatory framework in Australia is "overly intrusive", discouraging investment while encouraging reselling and cherry-picking by competitors.
Bleeding Edge tends to favour the alternative explanation offered by Ewan Sutherland, executive director of the International Telecommunications Users Group, which is that Telstra's high backhaul transmission charges - the cost of transmitting data over Telstra lines back to the main network - have paralysed broadband competition.
Telstra is the typical monopolist structure, weighed down by a culture of risk-aversion, short-term decision-making and sheer administrative incompetence. Its billing systems are a byzantine mess which are a perfect case study in how not to manage projects. We are unlikely ever to know precisely how much money Telstra tipped into the bank accounts of external contractors, with conspicuously poor results, but it must be a staggering sum. That money would have been better spent on digital infrastructure.
Right about now, new CEO Solomon Trujillo must be waking up to the fact that the apparently cosy little backwater on which he was encouraged to settle is surrounded by shooting parties, and he's the designated duck.
Posted by cw at August 23, 2005 09:53 AM
Comments
I live in Willow Tree NSW. This town is not ADSL enabled, yet ISDN is available at about $90 bucks a month because you need two lines. HiBis through "Clear Towns" wireless technology is available @ $24.95 a month. Clear Towns needs at least 40 users before it will set up its transmission system.
I am told ADSL cannot use fibre optic cable and therefore ADSL is not available if you are more than 3.5 ks from the exchange.
It is quite possible that the government has introduced HiBIS so that it can continue to subsidise Telstra, even after it has been privatised, knowing that a private company will not have any compassion for a technologically isolated customer, and refuse to enable them.
It maybe that the government will expand HiBIS to catch all those who are deprived.
It is annoying to see those documentaries which hilite the technology employed in what are loosely termed as 3rd world countries. They leave us for dead.
It is the 21st century, isn't it?
Posted by: Neil Forscutt at August 28, 2005 05:57 PM