Broadband in Australia – just taking it slow

For Australian internet users, Labor’s promise of at least 12Mbps broadband connection to 98% of the population sounds like a welcome upgrade, but if Labor’s plan comes to fruition, the reality still falls a long way short of the speeds other nations enjoy.

The World Bank last year put Australia in its place when it published figures on relative global broadband speeds – Australia ranked 23rd out of 30 OECD nations at 2004 levels.

Source: The World Banks’s Information and Communication Technologies tables, compiled in 2004 and released last year. * “Bits per person” refers to contracted capacity of international connections between countries for transmitting internet traffic divided by the population.

Labor can rightly argue they are starting from a low base, but if they reach their goal by 2010, Australia will still trail – by a long way – some nations at their 2004 levels. As Terry McCrann wrote yesterday:

If we are going to spend $10 billion building a “tomorrow network” the minimum speed for most consumers should be 40Mb. As it is in Germany with a similar infrastructure.

So why not set our sights higher? The short answers are money and politics.

In the 2005 World Economic Forum’s Global Information Technology Report, Australia ranked 15th in the world in our “preparedness to participate in and benefit from (information and communications technology) developments”. Translated, that means achieving parity with Germany requires significant reform of Australia’s broadband back-end.  

The Internet Industry Association (IIA) has set a benchmark that exceeds Labor’s but is more modest than McCrann’s, calling for 24Mbps to 67% of the population by 2010, but they too realise that will require “significant … changes in attitude and leadership from the Government and policy makers.”

Peter Coroneos, chief executive of the IIA, told Crikey that international comparisons are becoming embarrassing.

“In France, consumers can have 24Mbps for $30 dollars a month, and that includes free national telephony. One Australian user we surveyed was paying $160 per month for broadband and telephony. At 512 Kbps, that’s one-48th the speed for over five times the cost, and that’s indicative of the disparity that exists between Australia and other nations. Japan is bringing 100Mbps services to users. That’s your benchmark”.

South Korea, world leaders in rolling out high-speed broadband, and a country aiming for speeds of up to five gigabytes per second, are doing it with an aggressive, interventionist government. In France, Paris is doing it with Wi-Fi and a forward-thinking Mayor.

So how should Australia do it? The long answer is through a combination of incentive to private investment, a regulatory regime that encourages investment, and government funding and direct investment in areas where it’s uneconomic for the private sector to build. According to Coroneos, the onus is now squarely on the government to push forward on those fronts.

“Industry cannot invest without knowing what the vision is. We’ve seen Labor’s vision. The government has been very quiet on this since the Labor announcement, apart from the predictable scaremongering. I think we’re all looking for a response which is meaningful, and if that doesn’t happen, we’ll be left with the status quo and an opposition party with a vision that people are warming to.”