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The Australian Broadband Disaster
David Gerard writes "Monopolies are bad, mmmkay? Robert Clark of TelecomAsia discusses the disaster that is broadband in Australia - its 2% takeup putting Australia behind such dynamic economies as Estonia. 'Telstra controls the local loop, is the largest mobile carrier with two digital networks, is the largest retail ISP, the largest wholesale data and Internet provider, and is a 50% shareholder in the biggest pay TV company.'"
For More Info on Australian broadband news you can go to http://whirlpool.net.au/ ----------- Off Topic I myself am having trouble with Ozemail aDSL. They say there is nothing wrong with my 1 - 3 second ping time (to ozemail.com.au) during peak times. They say if you can load a webpage in under 20 seconds nothing is wrong with it.
"You win again Gravity!" -Futurama (Zapp)
...than the comcast service I have right now. I swear my internet works only when no one on the block is watching cable.
I like their customer service "Welcome to Comcast, if you are calling for customer service please hang up now and bang your head against a wall until you are hallucinating connectivity.
I've heard that many (all?) of the Australian broadband options have limits on how much you can download per month. I hope it's not a sign of things to come in the rest of the world.
... they're anti-competitive too.
Read this post for an example. Basically they don't tell the other ISPs on their wholesalers list when new exchanges are ADSL-enabled, so that customers sign up with Telstra because they think they can't get a connection through other ISPs. (The author of that post, Simon Hackett, is the CEO of Internode, one of the larger - and best -- wholesale ISPs).
What is even more incredible than Telstras' monopoly in Australia is its plummeting share price. It has gone from around AU$8.50 in late 1999 to around AU$4.50 today. The monopoly and the resulting lack of cost efficient broadband would be easier to take if some people (especially all the Mums and Pops the government encouraged to invest when Telstra was privatised) had at least made some money out of it.
Telstra are the perfect example of why monopolies are bad.
They've taken every new technology that has come and instead of saying "How can we sell this to people and make a profit" they say "How can we exploit this and make as large a profit as we can."
I had ADSL with Telstra.
It was capped (bad) but I could live with that. Until they slammed me.
Short story:
I had the three gig cap. It cost $90 AUD/month for three gigs.
I went over one month (my bad) and used around 9 gigs (when I discovered file sharing). The bill I recieved however was for over $1200 AUD.
To sumamrise:
1st 3 gigs - Charge $90.
Each 3 gig block after that cost me $550 AUD.
At the time it was _not_possible_ to get a greater cap then 3 gigs - so if you wanted ten gigs to download that was what you paid.
Exploitation?
Yes.
They are scum and deserve to be broken up.
Estonia actually is a dynamic, hi-tech economy. They have the largest uptake of Internet banking in the world. When you park your car in Estonia, you pay the meter using your mobile phone. It is not surprising at all that they have a high uptake of DSL.
Australia is a classic case of why monopolies in any industry should be avoided.
The most recent broadband fiasco here in Oz concerns itself with Telstra (who handle ALL submissions for ADSL in Australia regardless of ISP) deliberately telling competitor signups that they don't meet broadband exchange requirements, then signing them up under Telstra where they suddenly just scrape in.
Then you have the woeful bandwidth limitations (imposed mostly because Telstra controls the phone lines and resells bandwidth to every other ISP by the MB).
The ONLY point I will concede to Telstra is that due to our huge, continent scale country, upgrading ALL exchanges can be cost prohibitive, however to not have broadband capability yet in large POPULATED regions is unforgiveable in 2003.
In short, Telstra as a RETAIL company should be split from Telstra the NATIONAL INFRASTRUCTURE company. Make the infrastructure company publically owned, then Telstra (Retail) can compete along with everyone else on a level playing field.
Quizo
Visceral Psyche Films
...it provides heaps of motivation for
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Wireless Networks. And the government finds it pretty difficult to argue against them.
I couldn't read the article as it's /.ed (mirrors anyone?)
But my perspective as a broadband user in Australia...
Frankly, I don't see there's a big problem. I pay my money (which as much as I can tell is roughly in keeping with global prices), and get a reasonably good, fast connection. Yes, almost all broadband providers have download caps (typically around 1 - 4Gb/month), but that's not a problem for most people, just leeches mostly.
If you use Telstra for your broadband, you might get lousy customer service (as I did before I switched) but now I'm with a smaller provider (Internode) and quite happy with them. Good connections, good service, reasonable prices.
Why the take up is so low, I don't know (maybe the article does), but I've got it, it wasn't hard and I'm happy.
FYI, I pay $A80/month for a semi-high end plan which is roughly $US55. Basic plans start around $A50 - 60/month, perhaps even lower.
Read reviews of shopping cart software
A senate committee hearing is currently underway in Australia, which is invistgating Telstraâ(TM)s practices. Especially Broadband and the dominance over the local loop. (Last mile of copper from the exchange)
6 08 0.pdf
Just take a look at the transcription below to get a feel for the attitude this company has!
http://www.aph.gov.au/hansard/senate/commttee/s
Comments like this from Telstra really make you laugh. (pg. 337)
There is an ADSL fetish that ADSL equals broadband. We do not believe that. We sell broadband services, and so we will try ISDN for those customers. That may be all they need, particularly if they are downloading stuff from the US, because ISDN is the maximum speed you will need to get stuff from the US.
Sad But true.
Area51 - We are watching...
the webserver seems to be grinding to a halt, so here's the article:
Australia's great broadband disaster
[by Robert Clark]
After a decade of political in-fighting over the ownership of Telstra, Australia faces the prospect of being a broadband desert. The incumbent needs to get out of cable TV - but first the government has to get out of denial
This is the story how a single mistake can turn into a multi-layered catastrophe. About how industry structure can drive government policy. About how the powerful will drive players in a market to their own ends. About how monopolies will thrive despite the most rigorous of regulators.
This then is the story of the great broadband disaster Down Under.
To a casual observer, it might seem an unlikely tale - Australia has been one of Asia's pioneers in telecom deregulation as well as in the adoption of new technology.
Australia introduced the first full service competition regime in the Asia-Pacific in 1992 and the first totally liberalized market in 1997. It boasts very respectable ownership rates for mobiles and PCs of around 70%, and around 60% for the Internet. It has far and away the strongest competition watchdog along with a well-resourced and experienced industry regulator. It has 600 ISPs, 80 long distance providers and four mobile operators, each of the latter with an international footprint.
As much as any other market in Asia-Pacific it has set the pace for telecom reform since the late 1980s.
Yet the story of Australian telecommunications in the decade since full competition began is that of a never-ending trench war between politicians, regulators, media magnates, new telcos and diverse groups ranging from farmers to pro-privatization lobbies.
More than anything else, they are arguing about the future of 50.1% government-owned Telstra - the country's biggest company, the most widely-held stock, the incumbent telco and the dominant cable company.
Yet amid the political thrust and parry, few have noticed that the industry structure has since lost the ability to deliver competitive outcomes.
No alternative
One long-standing Telstra critic is Professor Alan Fels, chairman of the national competition regulator the Australian Competition and Consumer Commission (ACCC), who describes Telstra as one of the world's "most horizontally and vertically integrated telecommunications companies."
It is Fels who points out that Telstra controls the local loop, is the largest mobile carrier with two digital networks, is the largest retail ISP, the largest wholesale data and Internet provider, and is a 50% shareholder in the biggest pay TV company.
And, almost uniquely in the world, it has been allowed to build a hybrid fiber coax (HFC) cable network which has been leased all but exclusively to its own pay TV company, a joint venture with the country's two most powerful media tycoons, Rupert Murdoch and Kerry Packer.
"In the local call services market competition has had very little impact," Fels says, adding that Telstra's competitors have virtually no alternative but to use the incumbent's network - even the main rival, Optus, relies heavily on the Telstra local loop.
"The clear message from this analysis is that Telstra has overwhelming dominance across the telecommunications market and in almost every segment of that market," Fels told an industry event in early March.
The impact of Telstra's sway in the market shows up most clearly in what has become the most critical aspect of the "last mile" - the growth of broadband.
The figures tell the story. With less than 2% of the population using a broadband connection, Australia now ranks 23rd on the global league table of broadband connectivity, behind 18 OECD countries as well as Hong Kong, Taiwan, Singapore and Estonia. And it is sinking.
Ewan Sutherland, chief executive of the International Telecommunications Users' Group (INTUG), says that even if Telstra meets its target of 1 mil
@ASP.NET's parent-teacher meeting: "Little Johnny.NET is very bright, but he doesn't play well with others."
Cable TV rollout in Australia is pretty small due to the low density of population - satellite is cheaper. Cable modems are available where cable has been rolled out, but that service is also provided by Telstra! (Some areas have cable from another company, whose cable modem charges and terms seem more reasonable, but it is not widely available).
The problem stems from the way that the government de-regulated the comms industry a number of years ago. They should have split Telstra into two components - one to own and manage the actual network of copper and fibre and one to sell services on top of this network. The solution we ended up with has the biggest retail provider, Telstra, also being the main wholesale provider. This makes it almost impossible for new service providers to get a fair deal.
.. ie that it can be regulated to offers good price and service.
;-)
For some times, here in france FT had a monopoly for the last kilometer link.
This shows that the DSL deployement was not so quick mainly because of the price
Now, that the last KM has been deregulated, the DSL market is booming : +100% on one year !
Some of the ISP use the provider services from FranceTelecom, other have their own core service. We even have some bank now offering DSL services (operated by third party ISP) ! OF course the most interrested thing is the price: 30â for a 1Mb no-limit DSL . And this is constantly decreasing as more as the deregulation is gaining momentum....
Ausis, put the pressure on your gov & telcos !
It worth wasting your time, to get better connectivity
-SLK
The fundamental problem is that Telecom NZ is a private company, and as such, is *required* to return a profit to its shareholders.
On one hand, people scream and moan about outrageous DSL pricing structures, but on the other, those people who have invested in the company absolutely love what it is doing to the value of that investment.
In addition, TCNZ is one of, if not the biggest, companies in the country. The government is quite understandably scared to step in and do anything, because of the economic ramifications of playing with the source of such a large part of their tax income stream.
I don't know if this is true of Telstra as well, but I suspect it is.
I have noticed a huge surgence of "capless" broadband plans in recent months.
Many ISP's including Dodo, escape net, TPG to name just a few have introduced unlimited download plans on their "slow" 256K/64K plans. This is fantastic news for home users except for those that have been locked into an 18 month contract with Telstra and are still capped at 3GB.
Incidently, though Australia's broadband usage is only 2% Nationally - it is actually increasing exponentially. Total number of ADSL/Cable users increased from 15,000 in July 2001 to almost 60,000 in June 2002 and it is still increasing rapidly. (See the ACCC)
Though growth may have slowed recently a little due to general unhappiness with Telstra's monopoly and bandwidth caps I see the influx of new ISP's and uncapped plans (thanks to comindico) as a good sign of more growth to come.
IT policy in Australia is a national disgrace and will continue to be as long as Richard Alston is in charge. He has been dubbed Senator "Luddite" by The Register. Gross stupidity withstanding, everything he does is clearly to benefit one person: Richard Alston. I know someone who stood next to him in a photo shoot recently and she said Senator Alston spent about 30 minutes getting makeup done before the picture was taken. She also said his perfume (sorry cologne) stinks.
His website reflects his self-aggrandizing nature. Notice how Senator Luddite's name is plastered all over the website taking credit for his staffers work like this report on spam
His latest disaster was revealed in parliament recently when it was revealed that he spent $4 million dollars on his departments website. When the scandal broke, the press went around and received quotes from web shops for roughly $65000 for the exact same job. Have a look yourself. There are multiple javascript errors on the home page apparently. I'm not suprised. I've corresponded with this department and many of the staffers have problems receiving/sending email. It's a joke that this office should be setting IT policy in Australia
Here, they rejected one customer applying through iiNet, a smaller ISP, claiming line quality was insufficient. The customer applied again through Telstra's own ISP, and was accepted. His ADSL service worked perfectly.
He complained to the Telecommunications Ombudsman publicised this, and shortly afterwards received an offer from Telstra to refund his connection fee, provide discounted service & upgrade his link too. He accepted, and also publicised Telstra's offer, causing more controversy. Telstra's explanation for the original problem was that "line test quality tests varied according to the weather".
Shortly after that, he was notified by Telstra that his service was to be disconnected, as he was "too far from the exchange". His ADSL service was still working perfectly, but apparently he shouldn't have been connected at all, regardless of the line quality...
Why would anyone engrave "Elbereth"?
Broadband is simply too expensive here in Australia for the majority of customers - that's why the takeup rate is so slow.
While living in Canada for the last 4 years, for about CDN$40/month (about AU$48/month, including the modem rental) I enjoyed unlimited high-speed cable internet. But when I moved back to Australia, I found that cable internet would cost about AU$65/month, plus the cost of the modem ($300 I think), with a 3 GB cap (including both uploaded and downloaded data). Any traffic beyond that was ~14c/MB. This was a lot better than before I left Australia 4 years ago ($65/month, $500 modem, 100 MB cap (yes, MB) and 33c/MB beyond that!), but still a big let down.
I ended up with a third-party (Internode) ADSL link at only 512/128 Kb/s for $99/month (and a $200 modem) which is uncapped, but prioritises me down the more I download (upload is unmetered).
I'm told the Canadian government ensures that broadband prices are kept at reasonable levels. The Australian government certainly doesn't. I was also told that Australia must pay for all traffic both to and from the US. 4 years ago, this was apparently about 12c/MB, and was the justification for the traffic caps and excess charges.However, these traffic charges are not only passed on to the consumer, they are also apply to everything - even Australian sites, and even if the content is cached by a local web proxy. Certain "popular" files may be mirrored for free by the ISP, if you're lucky.
It's not hard to see why Australian broadband costs so much, and why so few people can afford it.
Why would anyone engrave "Elbereth"?
I started using Telstra ADSL back before they started capping the bandwidth, and all I can say they are absolute shit.
When ringing them when the net is down, I had to wait at least 20 minutes before I got through, and when I did, they wouldn't help me because I wasn't using Windows, their USB-to-Ethernet converter, and my computer was plugged into a network. When I finally had reverted my network back to whatever they wanted, they finally started helping me, and the problem was on their end, as I already knew. Usually it takes around a day before it starts working again, and that's nowhere near satisfactory.
After endless hours of surfing, I found iiNet, a Perth-based ISP that offered 512/128, 6gb on peak and 6gb off peak for $79.95 AUD. Which was much better than the $100 we were paying for unrealiable 3gb. And if you go past the limit, you get 'shaped' to 72kbits, which is good enough for surfing. Plus, they have an extensive peering network, PIPE Networks, which include a large amount of ISPs and FTPs to grab latest trailers, etc., off.
But wait! There's more! iiNet has an unique way of counting your bandwidth limit. It adds up the last 30 days of usage, and if it goes over your limit, it starts shaping the next day. That means if you manage your download effectively, you can squeeze in 12gb of downloads easily. Only downside to iiNet, however, is you have to pay in blocks of three months.
Otherwise, iiNet is a great ISP to look at if you wanna get of Telstra.
Founder of Mirror Moon - Tsukihime Game Trans
I remember back in high school, there was this economics simulation game we all played in class where every team owned a pen company and competed with the other teams. One of the first lessons that we learned is that 1000 pens at $1 each actually nets you mor emoney than 1 pen at $1000. It sounds like they should be the same, but in the $1000 pen case, you either get it all, or get nothing, but in the $1 pen case you can still make some money even if you don't sell everything.
The problem is broadband in Austrailia is that the monopolies cannot understand this fact of business.
The current population of Australia is about 20 million people. So at a 2% adoption rate, even if they could really, REALLY gouge thier customers at say $500 a month(!) then they stand to gain $200,000,000 a month, gross. Now, if by charging $25 dollars a month they could get a 50% adoption rate, then they will actually make $50,000,000 MORE a month than they did charging $500. That's a 20% increase in income and a 2,000% decrease in price! Everybody wins!
That's right, you can charge less of a price and still make more money, it really is possible... Even a hard core monopoly should at least care about making more money. If you can make more money as a company AND provide better service to more customers, then do it! It is absolute blind, and stupid, greed, and probably a little misanthropy mixed in for good measure, that they don't spend a few days to crunch the numbers and actually see that it's possible to make more money and more happy customers doing things a different way.