Local Councils And Utility Should Supply Broadband

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A Victorian economics professor has tossed a bomb into Telstra’s campaign against regulation. Taking a “small is beautiful line”, Joshua Gans in a report for CEDA says nationwide, high-speed broadband is the wrong way to go.

The best approach is local – he suggests councils might take the lead in providing access as a utility.

However, to do this, access to Telstra’s local exchanges and the copper network need to be prised open with stiffer government regulation.

Meanwhile, the scorned copper network is winning friends around the world over use of fibre to the node or home (see following stories).

“What that means is that to enable local competition, we need some tough regulatory interventions to ensure a level playing field,” Gans writes in Crikey.com.au. “Contrary to perceptions, broadband is one of the least regulated areas of telecommunications. I suggest that given the difficulties in generating incumbent investment, it is time for that attitude to change for the ACCC and Federal government to take a tougher stance.

“At the moment we have a strange debate between the regulator and Telstra, with Telstra refusing to make more investments until it receives protection from competition. This seemed frustrating to me as we appeared to lag behind the world in broadband investment.

“The whole idea that we need a national solution to broadband is misplaced.
The constraints are all in the last mile and hence, from a supply perspective, we need lots of local solutions. But there are challenges. If a smaller company wants to connect up a neighbourhood to a fibre network, it needs to connect to the Internet. This means connecting up those lines in exchanges; owned and operated primarily by Telstra.”  

Gans’s report, The Local Broadband Imperative, was produced by the Committee for the Economic Development of Australia.

 The author claims broadband better suits a series of local-level solutions: for instance, a very fast fibre-based local network in one place; competing cable and wireless networks in another; and basic ADSL in a third.

 The report confirms that Australians have now adopted broadband at about the OECD average rate. But by world standards, Australian broadband is slow: we are the only OECD nation where more than half of all broadband users download data at 512kbs or less.

The report directly contradicts the official line from Communications and IT Minister Helen Coonan, who favours big projects.

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