Too Busy For Words - the PaulWay Blog

Fri 17th Nov, 2006

Broadband costs too much? Why would that be?

To Senator Helen Coonan, Minister for Communications,

Dear Senator, I was disappointed to read your comments on Mr Murdoch's statement that the price of broadband in Australia is a disgrace. You said in your interview with the ABC that people may not wish to pay the high price for broadband in Australia. This, I feel, rather puts the cart before the horse: you are not addressing the key issue, the fact that Australia's broadband is far more expensive than equivalent offerings in other countries. Even in the cities, where the arguments of distance and scarcity of people do not apply, people in the UK get two megabit per second for prices less than we get one quarter of that speed. The reason for this is quite simple: Telstra are artificially limiting the speeds of connections and are artificially inflating the cost. Graphs such as the one at clearly show that the actual speeds provided by Telstra are far inferior than that available to both their own equipment and to customer equipment (the light blue ADSL area).

I should point out that the other major method of internet connectivity - dial-up modems - not only costs the user more than the standard cheapest broadband offerings, but also deprives the person of a phone line while they are on the internet, thus severing links to the outside world. Thus any claim that people have a 'choice' not to pay for broadband but still receive internet access is a Hobson's choice - no choice at all. And while many people that don't have access to the internet at home do have it at work, often the use of internet at home is for activities which are not appropriate at work - looking for jobs or partners, for example. So for many of these people who cannot afford the high prices of broadband, there is no access to the internet at all.

The key point that Mr Murdoch is making, and one you are ignoring, is that the artificially high prices of internet access is disadvantaging all Australians. The range of opportunities for self-improvement and community involvement offered by the internet are both well-documented and considerable. An emergent example would be the number of training and self-education videos on everything from exercises with babies to Go playing offered on sites such as YouTube and Google Video. This is currently being denied to some people because of Telstra's artificially high pricing; many more people are on download-limited connections unsuitable to using much of this new content because they cannot afford larger, less restricted services. It is not a question of people 'wanting' these services, as you propose - it is a question of people being denied services that Telstra is charging too much for.

Telstra has been offered several chances to 'get on the band-wagon' and improve its services. It has refused these - the most prominent example being its recent backing out of a deal to provide ADSL2 services because it would 'hurt shareholder value'. Instead, it has embarked on the ludicrous 'Next-G' service, which not only proposes to spend more to provide less bandwidth to fewer people for more money than equivalent wired services, but also ignores the obvious evidence that 3rd Generation mobile phones are not only already available in Australia but fully subscribed - the estimates from Paul Butte(a highly-respected telecommunications industry analyst) put the number of people who need Next-G's services at 200,000 people, but the total base of customers already on 3G services through Hutchison, Optus, Vodafone and 3 already exceeds 500,000 people. It certainly makes a mockery of your statement that people may not want to pay for high-speed services, when Telstra's attempt at a "great leap forward" is to charge more for less.

I look forward to hearing from you when you've decided to get to the twenty-first century, where broadband isn't an expensive luxury but a benefit avaiable everyone.


Paul Wayper

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