Lessons for Canada in $43-billion Australian broadband plan, experts say

Canada could take a page from Australia’s new $43-billion AU national broadband partnership between the federal government and the country’s largest telco, experts say. Catherine Middleton, the Canada research chair in communication technologies and the information society at Ryerson University, said Australia developed its digital strategy following extensive consultations, and that Canada needs a similarly detailed plan. “Canada should definitely engage in this sort of detailed planning, with a view to consider how best to develop faster broadband infrastructures that are considered to be essential to the 21st century,” Middleton wrote by email to The Wire Report. On Sunday, Telstra Corp., Australia’s largest telecommunications company, signed onto a broadband plan with the Labor government that will eventually see the country abandon its legacy copper infrastructure and replace it with fibre optic cable. The Australian government has agreed to pay Telstra $11 billion AU over several years so that the National Broadband Network Co., a state-owned company, can access Telstra’s infrastructure to build the network. Middleton said the telecom industry in Canada is very different from Australia’s, where Telstra is the only incumbent telecommunications company. Even with only one major player in the country, the deal between Telstra and the government was reached after months of difficult negotiations. The deal means that there will be one, unbundled national fibre network operating on an open, wholesale access model. “This means there will be one fibre network built across the country,” Middleton said. “ny service provider who wishes to use it to deliver services to Australian households and businesses can do so.” The Wall Street Journal reported that negotiations were “rocky” because officials with Telstra worried that a broadband program could hinder the company’s growth opportunities and the future of its network infrastructure. David Ellis, a digital strategy consultant and a course director with York University’s communications studies program, told The Wire Report that, in many respects, Canada’s network landscape is more like the United States than Austalia. “It would be fabulous if we could convince Bell Canada to turn over its assets for fair market value, and get involved in an all-fibre scheme, but part of the problem is that we have five large broadband providers across the country, divided between the telcos and the cablecos, which would make things quite awkward,” Ellis said. “The biggest obstacle to policy reform in this area is the five broadband ISPs ,” he added. “They’re not going anywhere for a very long time because they’re making too much money, having too much fun and nobody is about to push them around.” Michael Hennessy, senior vice-president of regulatory affairs with Telus Corp., said in an interview that Canada’s facilities-based model for Internet access—in which service providers own and operate their own networks—is preferable to a so-called government monopoly. “I think it would be a shame, after virtually 20 years of promoting facilities-based competition in this country, to bury that model in favour of a government broadband monopoly,” Hennessy said. He said government-owned networks are often neglected after several years without receiving necessary upgrades. “You’re left with what would be, technologically, a pile of junk, rather than an advanced network.” But Middleton said Canada should seriously consider to the idea of sharing fibre networks. The CRTC held hearings in early June to determine whether it should grant wholesale access to the large Internet service providers’ high-speed networks. The Australian plan, announced under Labor Prime Minister Kevin Rudd, faces strong opposition from the Australian Liberal party. Middleton said the Liberals plan to cancel the program if they win the next election. Ellis said government intervention is necessary to make broadband Internet more accessible to Canadians. “Nothing significant will ever happen on the broadband front in Canada unless we have more government intervention in the marketplace, not less,” he said. Ellis said the cost of broadband in Canada is a major obstacle to higher consumer adoption rates. He said Canada ranks 23 out of 30 Organisation for Economic Co-operation and Development (OECD) countries for the average retail price of Internet subscriptions. “It doesn’t matter about the penetration. Beyond a certain point, if people can’t afford to buy broadband … we’re not going to get anywhere,” Ellis said. Ellis said Industry Canada’s Broadband Canada plan to connect rural Canadians to high-speed Internet does not go far enough because it is confined to rural and remote areas and does not address the affordability question. Industry Canada has set aside $225 million to expand broadband access in rural regions. So far, the government has approved 52 projects in nine provinces through a competitive process that is expected to provide broadband access to 169,000 rural Canadians. The Conservative government is also conducting consultations toward the drafting of a national digital economy strategy. Duncan Stewart, the technology, media and telecommunications director of research for Deloitte Canada, told The Wire Report that universal broadband access does not necessarily make a country more productive or innovative. He said once a majority of the population has access, the economic benefits of connecting the last 20 or 10 per cent are negligible. “It’s really easy to draw lines looking at telecommunications penetration and saying, ‘Look, it’s a sign of health, of innovation, of adoption,’” Stewart said. “On the other hand, Japanese penetration of advanced cell phones has been stunningly wonderful for over a decade. But their economy has gone sideways for the last 20 years.” jmigneault@thewirereport.ca

Lessons for Canada in $43-billion Australian broadband plan, experts say

News | June 22, 2010

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