Monday, July 28, 2008

Australia - broadband

Butting heads over broadband

BRUCE Billson likes to think of himself as an average tech kind of guy. He's an ADSL subscriber, sends and receives copious amounts of email, is attached at the ear to his Palm Trio mobile phone and loves to play on the Nintendo Wii with his kids.
Butting heads over broadband

'There is a case for taxpayer subsidies where areas in the market are under-serviced,' says Bruce Billson
Billson's use of technology serves as his own personal Geiger counter to alert him to successes and failures in Australia's telecommunications landscape.

Like any good shadow minister, he is vocal about issues that set of his Geiger counter, particular if they come from Communications Minister Stephen Conroy.

Since the Labor Party's ascent to power, Billson's main concern is the National Broadband Network, a $4.7 billion government-funded plan to bring high-speed broadband services to 98 per cent of Australians.

The broadband network was one of the Labor Party's election promises and a rebuttal of the Coalition's plan for the Opel joint venture to supply affordable broadband to under-serviced parts of Australia.

The Opel plan was scrapped shortly after Senator Conroy's appointment but its undoing could relegate Australia to the broadband dark ages, Billson says.

Are you happy with the state of technology in Australia?

The uptake of new technology has always been a plus for Australia. The need for technology options at an affordable price is what motivates me.

Dominating the tech landscape at the moment is Labor's national broadband network, but its details are so heavily shrouded in fog that no one yet knows how it will benefit consumers.

There has been a lot of talk about whether the broadband network should be subsidised to the extent that has been proposed. Do you think the public is prepared to buy fibre to the node services at a price that generates a profit?

My view, and the Opposition's view, has always been that there is a case for taxpayer subsidies where areas in the market are under-serviced, uneconomic or commercially unviable. With the broadband network the Labor Government has been talking about being a venture partner and getting a commercial rate of return on taxpayer funds.

That has all the hallmarks of a viable commercial venture, so why wouldn't you leave it to the private sector to do?

We've seen the broadband network time line blow out and we have a complete fog about what the open access and pricing framework will look like.

We also have telcos out there offering performances equivalent to the government policy benchmark using DSLAMs that might end up dangling in the wilderness if they are bypassed by this broadband network. It's a very worrying time for many in the industry and a very confusing time for consumers, not knowing where all this might end and seemingly shrouded in secrecy, with gag orders that won't even let people talk about these things.

We've seen the broadband network process blow out of its initial timeframe a couple times. What are your thoughts on the network being built to schedule?

What motivates me is the national and consumer interest. In that spirit I've repeatedly offered to Senator Conroy our positive input, co-operation and assistance to make sure consumers have access to high-speed and more affordable broadband and to go about that in a measured, well-researched, evidence-based way.

He has declined that help and instead embarked on a process that Robert Mugabe would be pleased to call his own.

You've got a gag order on key participants who have much to offer in the public debate, an expert panel of handpicked advisers to whom Senator Conroy has made clear what he would like to come out of it.

It's all in a fog of politicking and the Rudd Government seems more interested in getting a political headline than it is in higher speed, more affordable broadband and the economic and social benefits that will bring for our economy and community.

The OECD is targeting broadband speeds for the European Union of between 20Mbps and 50Mbps by 2010 to 2015. Do you think Australia should focus on keeping up with OECD countries, or are the current broadband network specifications of 12Mbps are good enough?

We certainly shouldn't be left behind. Our ambition should be to have competitive broadband - not only in speed but in price.

Australia is a vast continent and we need to embrace the range of technology to offer the highest speed and most affordable broadband that can be delivered.

Many people already have access to 12Mbps but choose not to take it up for a range of reasons.

Others are looking for reliability at higher speeds, which is why we need to keep an eye on what is available among our competitors in the OECD, to make sure we are not left behind, and to avoid being prescriptive about the build platforms, which could limit our options for the future.

Given the ubiquity of high-speed internet services in Australia's capital cities, is there a case to build a national broadband network from the outside in, instead of the way Senator Conroy is proposing through the broadband network?

That was our strategy with Opel. There was an Opel blueprint available to Senator Conroy but he decided to pull the rug out from underneath it. It had scalability that integrated a range of technology to suit the terrain of our vast continent.

Alongside that the former government was working co-operatively and collaboratively with industry to see what kind of regulatory environment was needed to have further investment rolled out in the city.

Senator Conroy is going about it the other way. He is giving very little confidence to those who are under-served about when their issues will be addressed.

He's providing higher levels of service availability to areas that already have high levels of service. His intransigence in focusing on build characteristics and not on broadband performance characteristics could add billions of dollars to project costs, which will need to be recovered from broadband users.

There has also been a lot of talk about the need for structural separation for whichever bidder ends up being the builder of the broadband network. Do you think the Government should require separation of the winner of the broadband contract?

If there is no taxpayer spend towards further investment, there should be no new obligations on the provider.

For instance, if Telstra was of a mind to push on with its investment and there was no new taxpayer funding going into it, there should be no new government imposition on Telstra and its shareholders.

If more than $4.5 billion of taxpayer money is to be put into this project we argue there should be additional public policy gains that strengthen the goals of open access and competition.

We've been less specific about the precise nature of that separation because we are aware that internationally there are various models that achieve that goal.

We want a no-conflict open access outcome, so wholesale prices are available on a consistent basis to retail service providers as was required under the Opel contract.

History has shown that regulation and structural separation is not easy when Telstra is involved. The Howard government was ineffectual in its attempts to enforce structural separation and regulation on Telstra. What do you think needs to be done to bolster regulation?

The first thing is not to freeze the ACCC out of the expert panel. The ACCC has been reduced to an also-ran: it can make a submission to the panel, but so can you and I. I don't think anyone would suggest regulation is an easy process. Having said that, I find completely it unacceptable that there's no discussion about what the ACCC should and shouldn't be doing concerning the broadband network.

There's no opportunity to even canvas those views.

The ACCC's powers, and whether they should or should not be bolstered, comes right back to the question of what regulatory framework is needed to support what could very well amount to a re-monopolisation of a crucial part of our telecommunications infrastructure.

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