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Broadband report calls for inquiry

Broadband report calls for inquiry

The Federal Government has released its long-awaited broadband connectivity report that outlines its role in promoting the uptake of broadband services and regulating the sector to ensure a competitive broadband market.

Commissioned by the Communications Minister Richard Alston’s Broadband Advisory Group (BAG), the report contains 19 recommendations on the Government’s role in establishing high-speed Internet access to users across Australia at reasonable prices.

The report calls for an Australian Consumer and Competition Commission (ACCC) inquiry into Telstra’s alleged abuse of market power through its peering practices.

A worldwide industry practice, “peering” occurs when dominant broadband players waive fees and offer benefits for their larger partners while smaller Internet companies are charged fees for the same access. The practice ostensibly makes broadband access cost-prohibitive for small Internet companies, decreasing the number of broadband infrastructure deployments that offer little returns.

The ACCC has been investigating Telstra since last year over the way it services its wholesale clients. The regulatory body is concerned that customers of Telstra’s wholesale partners are getting less adequate service than retail customers, due to the telco’s shortfalls in informing wholesale partners of network faults and its inefficiency in rectifying them.

The BAG report recommends that the government appoint a group to implement and oversee the new national broadband strategy and create a national broadband network.

The implementation group would be charged with co-ordinating funding programs, developing ways to aggregate individual broadband infrastructure elements to form a national broadband network and organising activities between public and private sectors to accelerate the deployment and take up of broadband applications and services, particularly in commercially non-viable regions.

Like a number of governments worldwide, the Australian Government claims to have made the development of broadband and wider national information infrastructures a key policy issue. And while the Government’s apparent commitment to building the broadband market has extended to the commissioning of the BAG report, it will not necessarily extend to the deployment of the recommended strategy outlined in the report.

Netgear’s managing director for Asia, Ian McLean, said that although the new broadband strategy was a positive step, it would be interesting to see how the Government responded to the report.

“At this stage it’s just a bunch of words; the Government is far from endorsing the recommendations,” he said. “The implementation process could take years to complete and we need solutions within six months otherwise Australia will fall further behind.”

McLean suggested that the Australian government look at some of the policies of both the Singapore and Korean governments regarding the expansion of the broadband market.

“Similar to the situation in Singapore and Korea, the Australian Government owns a controlling interest in the nation’s dominant telco company,” he said. “Yet the Singapore and Korean governments regard the promotion and deployment of broadband and Internet services as playing a critical part in building a knowledge economy. Unfortunately, the Australian government is far off from showing that same level of commitment.”

While general manager of Tasmanian ISP JAM Internet Solutions, Tony Cruise, welcomed the government’s broadband connectivity report, he was doubtful about the extent the implemented strategies would benefit small Internet players in the near future.

“The Government has to look at ways to ease smaller ISPs into the market,” he said. “Because of Telstra’s unfair pricing advantage, I think the government should impose some kind of pricing restrictions to promote greater competition and to give the small guys a fair go. In Tasmania we have virtually no competition at all. There’s Telstra or there’s Telstra — clearly something has to be done if the Government expects to see broadband take off.”

The BAG report indicated that broadband connectivity will be a key driver of Australia’s Gross Domestic Product (GDP), jobs and wages growth, and will pave the way for the next wave of economic expansion. Accenture estimates that next generation broadband could produce economic benefits of $12 billion to $30 billion per year in Australia.n


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