Australia has certainly provided me with a lot of food for thought on a number of subjects. One of the big things I’ve been thinking about, not just in Australia but for quite some time, is the issue of broadband internet and how it’s the basis of the future economy. It’s a subject I’ve focused on for years, ever since I lived in New Zealand, so it’s kind of appropriate that Australia has broadened my thinking on the subject.
Let’s start with South Korea, though. South Korea is already a world leader in mobile phone technology and broadband internet speeds and pricing. I’ve posted before about how the country is also taking a very progressive attitude toward robots, which is going to be the next big technology market. Put all of that together… and it’s kind of scary. When a country equips its people with such infrastructure and attitude, it’s hard to see how they’re not going to excel, which could mean bad things for us in the West.
South Korea is far from the only Asian country to be on this path. Japan, China and India all seem to have a much clearer view than we do in the West of how important and transformative these technologies are. Canada and the United States seem very lost when it comes to building the infrastructure of the future. The recently unveiled American broadband plan was roundly criticized for not really addressing the important issues, like competition and a lack of choice in internet access for most citizens. Canada, meanwhile, doesn’t even have a bad broadband plan… we’ve got nothing.
I used to think Canada’s broadband problems could be solved simply by removing the oppressive ownership restrictions we have (in a nutshell – foreigners need not apply in building wired or wireless networks). But Australia, where foreign companies are allowed, has shown me it wouldn’t be that simple.
Australia is in the midst of building its National Broadband Network, a $30-billion-plus project that aims to connect most Australians with 100-megabit internet connections. There’s been a lot in the press here about it in the last few days, with tests beginning in Tasmania and the usual huffery from big internet providers about how this whole thing is bad for the country. The NBN, for those who don’t know, is being rolled out by a government that is fed up with Telstra, or Australia’s equivalent of Bell Canada or AT&T. Telstra has fought the government for years about letting its rivals – smaller companies such as iiNet – use its network.
The problem is, of course, that a big internet network like the one Telstra has is extremely expensive and difficult to replicate. Most countries have opted for so-called “open access” rules that let other companies rent the network for reasonable rates, so that they can then compete with the main network owner and therefore bring prices down and speeds up. This is how places like South Korea and Japan have such blazingly fast internet for such rock-bottom prices. But Australia, like Canada and the United States, has for the longest time bought the argument put forward by the big phone company: that the network belongs to the company, and competition is or will happen through “market forces” rather than via open access.
The Australian government has very wisely seen through that crap. “Market forces” do not properly exist in telecommunications because it is a very difficult and expensive business with many barriers to entry. It is far more difficult, for example, to start an internet service provider than it is to open up a clothing store or a coffee shop, which are businesses with virtually no barriers to entry.
In Canada, where many people complain about the lack of competition between our ISPs, opening up the market to foreigners wouldn’t necessarily mean that more companies would come in and set up shop. Building networks is still prohibitively expensive and difficult. That means more must be done – like what Australia is doing.
If a country truly believes its future economic fortunes depend on broadband, then it can’t allow such important infrastructure to be left solely in the hands of private enterprise. I very much like what Australia is doing because the government is building a network that will force Telstra to compete. If Telstra doesn’t want to lose all its customers to the superior NBN, it’s going to have to upgrade its services. Yes, it’s an “artificial” way of spurring competition, but it may actually be the only way. As pretty much everyone in Australia has figured out, Telstra’s way definitely wasn’t getting the country anywhere.
In Canada we have a bit of a different situation, in that phone companies compete for internet customers with cable providers. In the early days of broadband, this legitimate competition made us a world leader. But in recent years, the phone and cable guys have settled in and milked their existing customers with steadily increasing rates, with only marginal improvements to services. Yes, they periodically improve those offerings, but only when their lagging services start to attract attention. Ultimately, it’s a go-slow situation that’s going to cumulatively leave us behind countries that are making bold plays, such as Australia.
The other reason why I like what Australia is doing is that it sends a message loud and clear, that’s it’s the government – elected by the people – that is in charge, not the companies. Telecommunications is an industry that seemingly can’t exist without an army of lobbyists swaying the ears of politicians to their own desires, so it’s very refreshing to see a government – any government – effectively take a stand. In North America, it’s clearly the lobbyists, and not the people, who run the show.
Now, with all those nice things about Australia said, there is also the completely ass-backwards attempt to filter porn from the internet here. The U.S. government and Google are among the critics of the plan, which seems designed to make Australia’s internet regime much like China’s. The only thing I can say about this is that it’s such a stupid idea, it’s bound to fail spectacularly.