Regional areas need fast Internet and more than the Regional Broadband Scheme

There is no question that rural areas of all parts of the world need broadband. However, at the moment, only 29% of the world’s rural population have some form of internet, meaning that 2.4 billion people are disconnected. Even where the Internet exists in regional areas, it is often based on wireless or satellite and consequently slower and more expensive.

This immediately puts people living in rural areas at a significant disadvantage in a situation where good internet communications should be the basis of providing essential services such as health and education.

Although this is a global problem, Australia is trying to address the issue through a recent review of the “telecommunications universal services obligation” (TUSO) by the Australian Government’s Productivity Commission. TUSO was introduced in the 1990s to ensure that all Australians could get reasonable access to a standard telephone service including payphones. What this meant in practice was that the Australian Government allocated AU $1 billion per year to maintain telephone services to the “bush”, most of which went to Australia’s major telecommunications company, Telstra. Now, Telstra receives about AU $297 million a year under this agreement, without the obligation of having to disclose in detail how that money is spent. About AU $100 million of the money that goes to Telstra is raised from a levy, paid in large part by other carriers.

The Productivity Commission is wanting to change all of that and also bring the agreements up-to-date with the advent of the National Broadband Network (NBN). It argues that it is broadband that should be universally available, not just telephones, which are rapidly becoming secondary in day-to-day communication.

Independently of what the Government decides to do about the TUSO however, it has decided to go ahead with a proposed Regional Broadband Scheme to distribute the costs of providing satellite and wireless to regional areas to competitors of the NBN.

Currently, it is the NBN that is having to subsidise the costs of delivering internet to regional areas from its more profitable urban services. This means competing against companies like TPG who can provide fast internet in cities through their fibre network to the basement of large apartment blocks and other buildings. The charges to companies like TPG would mean an extra AU $7.09 a month per user of “superfast broadband”, in practice, anyone with a connection of 25 Gbps and above.

As with the proposed changes to the overall universal services obligation, the levelling of the real costs of delivering broadband to all Australians is not a good idea in principle. The trouble is, like the entire NBN project, adding in piecemeal legislation addressing a small part of the overall TUSO challenge is simply like trying to put a band-aid on a gaping wound.

Prior to the 2013 election, The Australian Prime Minister, Malcolm Turnbull promised that every Australian would have internet of at least 25 Mbps. This was rapidly changed after the election to a promise that this aim would be achieved “as soon as possible”.

The reality is that actually nobody knows when this will happen including NBN Co themselves who expect that 8 million homes and businesses will be connected by 2020.

This is somewhat hard to believe given that of the 3.2 million premises that are “ready for service” currently with NBN fixed broadband, wireless and satellite, only 1.4 million premises are connected. Of more concern, only 53,000 premises out of a potential 415,000 premises covered by satellite are connected. Growth in satellite connections has been minimal over the past 2 years. Wireless connections are not that much better with only 30% of premises covered by wireless having been connected.

The challenge facing NBN Co is not simply the fact that it is rolling out a collection of different technologies with the realisation that some of the existing networks that the NBN Co took over were not well maintained. Complaints about the service are also increasing with customers complaining increasingly about delays in connections, slow data services and drop-outs. The Telecommunications Industry Ombudsman reported that complaints about the NBN rose 150% from the previous year.

The NBN went from the idea that the best available technologies would be used to deliver the fastest available broadband to all Australians to a politically and technologically expedient collection of compromises. The Regional Broadband Scheme proposal is another patch on what should be a more comprehensive approach to the problem of telecommunications universal services obligations. These services need to consider not just broadband to homes in rural areas but how to provide adequate internet to enable schools, health and other services to take advantage of future technologies that will rely on it.