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Chapter 3 - A National Broadband Strategy and Implementation
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RECOMMENDATIONS Vision
National Strategy and Implementation
The Government should establish a National Broadband Strategy Implementation Group to oversee implementation of the actions in the national strategy and to review and evaluate its progress. The Group would also:
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3.1 Australia's place in the global information economy
The Government's main objective for the digital economy should be to stake Australia's claim to a disproportionate share of the benefits of the emerging global information economy. This will involve the successful adoption of regulatory, industrial and cultural structures. A number of countries have recognised this and are developing new communications infrastructure, advancing the skills of their populations and promoting policies that encourage innovation and creativity in the services and content sectors.
Broadband networks will be an important enabler, providing key infrastructure for the information economy. Just as road and rail infrastructure has been critical to the effective functioning of an industrial economy, so is broadband infrastructure critical for the information economy.
There are two important reasons why a holistic approach to broadband should be adopted. The first is the pursuit of economic efficiency and innovation. Broadband networks are a platform for economic growth and structural transformation. The second is 'nation-building' or 'community-building'. Broadband networks are a platform for enhancing social, cultural and national cohesion.
3.2 Where do we want to be?
Vision
If Australia is to achieve these outcomes we must have a clear vision of what we are aiming for as a nation. The recommended vision has several important elements. It aims to position Australia as a leader, not simply in the take-up of broadband but in its effective use. This is a significant departure from the basis on which international comparisons have been made to date. While take-up is a useful measure it is simplistic because it does not address the real driver of enhanced outcomes in key sectors and of improved economic and social benefits.
This shared understanding of where we are heading and why will be an essential foundation for cooperation between all levels of government and industry in accelerating the rollout of broadband infrastructure.
Goals
The recommended goals deal directly with the potential impediments to Australia's take-up of broadband most frequently raised during the BAG's consultations. These were price, availability and lack of competition, particularly in the last mile.
The Government should make a clear commitment to overcoming these impediments by setting the following national goals:
- The availability of broadband to all Australians at fair and reasonable prices; and
- Market arrangements that are pro-competitive and encourage investment in infrastructure, services, applications and content, to advance the long term interests of the end users.
According to a recent international report by A T Kearney, the prices of broadband services in Australia compare favourably with other industrialised countries, with ADSL and cable pricing amongst the lowest in the world[1]. Despite this, the cost of broadband services is frequently claimed to be a major impediment for potential broadband users. The Estens Regional Telecommunications Inquiry provided some support for this position in so far as it found that some regional users pay higher prices for broadband services than metropolitan users. A T Kearney concluded that greater government support, compelling content and aggressive marketing will make the difference. Ultimately, potential business and consumer users, must make their own assessment of the value proposition of enhanced services. The challenge for broadband service providers is to achieve a balance between affordability and value for consumers and pricing that allows suppliers of broadband services to make a reasonable return on investment. Pricing and availability are complex market issues of supply and demand. These issues are covered in more detail in Appendix 1.
The level of international prices has been the subject of regular criticism, particularly by non-Tier 1 carriers and ISPs as a factor that contributes to higher relative broadband data charges in Australia. Diplomatic efforts to address inequitable international pricing should be continued as a priority.
Whilst there is some community concern that there is no real competition in the customer access network (CAN), evidence of competition is emerging in the delivery of broadband services (more detail is provided in Sections 7.1 and 7.2). If the broadband market is to continue to develop, the regulatory framework must concentrate on encouraging efficient market outcomes, sustainable competition and removing barriers to entry. It is also important that the focus be not simply on market arrangements that encourage investment on the supply side but also on the demand side in the development of services, applications and content.
3.3 Objectives
A national broadband strategy should aim to maximise:
- productivity by providing a platform for Australian innovation and transforming the economy, enhancing GDP, employment and wage growth
- international competitiveness by enabling the integration of Australian companies into global supply chains, encouraging new business strategies and models, and providing a platform for Australian scientists and engineers to participate in advanced technology activities on the international stage
- quality of services available to all communities through innovative e-learning, e-health and e-government applications
- communities by strengthening the social cohesion of regional and remote communities and providing support for community networks in urban environments
- the information economy environment by developing a range of building blocks to promote market confidence in broadband applications, including interoperable systems, e-security and awareness of the benefits of broadband
- choices in work and recreation activities available to all Australians independent of location, background, age or interests
3.4 Principles
In realising these objectives, a National Broadband Strategy should adopt these principles:
- Coordinated infrastructure development: private industry stakeholders, Commonwealth, state, territory and local governments should work together to encourage the development of broadband infrastructure, applications and services, concentrating on market failure such as lack of information and other impediments to infrastructure investment. Commonwealth Government and state urban and regional planning processes should incorporate a consideration of relevant telecommunications planning issues.
- Efficient resource allocation and competitive markets: Broadband policies, regulation and other initiatives should be transparent and flexible and should build foundations for sustainable contestable markets, including competitive technology solutions.
- Access: all Australians should have the opportunity to access broadband services at fair and reasonable prices.
- Innovation: Australia should pursue continuous innovation and productivity improvements by enhancing global connectivity for research and development, and by developing world class, innovative broadband technologies, applications, content and services.
- Policy responsiveness: Policies should be regularly measured and re-evaluated in the light of emerging market conditions. Policy settings and programs should be similarly responsive and adaptive.
3.5 National Broadband Strategy Implementation Group
To achieve the national vision and goals, all levels of government, industry stakeholders, the corporate sector and community groups need to work as partners on a national approach to broadband issues that is responsive to a dynamic communications environment. This requires a stated commitment from leaders in the public and private sector to work strategically to develop broadband infrastructure and innovative applications.
A National Broadband Strategy Implementation Group should be established with representation from these key sectors. The Group would be responsible to the Minister for Communications, Information Technology and the Arts and would report to the Online Council. It would oversee the implementation of the national strategy and the associated initiatives recommended in this report. It would also review and evaluate the progress of the national strategy and its initiatives.
A diagram showing the operational relationships of a National Broadband Strategy Implementation Group is contained in Appendix 3.
3.6 National Broadband Infrastructure Planning Framework
An important role for the National Broadband Strategy Implementation Group will be to develop a national broadband infrastructure planning framework, in order to identify the ways in which individual broadband infrastructure elements should be aggregated to create a national broadband network. It would maximise the impact of public infrastructure spending through improved coordination. This would provide a model that leverages, encourages and coordinates public and private sector collaboration around agreed national, interregional and local priorities.
A national broadband infrastructure planning framework would make it possible to prioritise public sector broadband investment and programs, measuring government initiatives against:
- National Broadband Strategy objectives and principles, recognising that not all aspects will be relevant to any given project
- The benefits likely to be achieved by the proposed service delivery outcomes.
3.7 Demand and Supply Objectives
Another role for the National Broadband Strategy Implementation Group would be to liaise with appropriate government and industry stakeholders in key sectors to define appropriate sectoral goals as a component of the national strategy. Relevant sectors would include education, health, commerce and government. Other demand-side goals would need to be developed for research and development in broadband access, services, content and applications. Existing programs should be reviewed and updated regularly in the context of the national vision and goals.
Similarly, the National Broadband Strategy Implementation Group would liaise with appropriate representatives on the supply-side to develop appropriate goals for the national strategy in competition, deployment and regional access. Supply side goals would need to have due regard to the service performance and price monitoring roles of the ACA and ACCC.
[1] A T Kearney The State of Broadband in Australia, A T Kearney Point of View, August 2002 p 2.