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Govt finally wakes up: broadband is critical to economic growth.



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Christian Zahra MP Federal Member for McMillan Parliamentary Secretary to the Shadow Minister for Communications

MMEEDDIIAA RREELLEEAASSEE30 April 2002GOVT FINALLY WAKES UP: BROADBANDIS CRITICAL TO ECONOMIC GROWTHThe Howard Government has finally acknowledged that broadband technology iscritical to Australia’s future economic growth, despite having presided over acompetition disaster that has severely retarded broadband roll out, according toParliamentary Secretary to the Shadow Minister for Communications Christian Zahra.Minister for Communications Richard Alston yesterday released a National Office forthe Information Economy (NOIE) report, which clearly states that the roll out ofaffordable broadband technology is critical to future growth in the Australianeconomy.The report found that by 2004-2005 increased business involvement in theinformation economy will generate:• An underlying rise in growth of 2.6 per cent;• 1.2 per cent higher employment; and• Higher incomes“This report has not only found that broadband technology is absolutely critical interms of generating growth in the economy, but also that one of the major barriers toits potential being realised are the high access prices and lack of competition currentlyexisting in the sector,” Mr Zahra said.“And the reason we have these impediments to the roll out of broadband technology issimply that the Howard Government has been unable or unwilling to put in place aregulatory regime that protects and encourages competition in the telecommunicationssector.”Mr Zahra said that Australia is lagging behind the rest of the world in terms ofbroadband access and that this will impact on future economic growth.“The OECD, in its Broadband Access Report (October 2001), has us sixteenth out of30 member countries. We were thirteenth of 30 only the year before, so things areactually getting worse, not better,” Mr Zahra said.Mr Zahra said that pricing is seen as a substantial impediment to the uptake ofbroadband in Australia, with a recent Macquarie Bank study indicating that Telstrabroadband prices are 30 per cent higher than those in Britain and the United States.“Without effective competition in broadband in Australia there will be no pressure onTelstra to make broadband more accessible and affordable and take-up of thetechnology will continue to be retarded,” Mr Zahra said. …/2- 2 -

“The Howard Government has put in place a complex and essentially anti-competitive regime. As a result, Australia has missed opportunities to create a thriving, competitive communications sector and has fallen way behind the rest of the world in the uptake of broadband.

“With all of this evidence that broadband is fundamental in terms of our nation’s productivity and international competitiveness, and with all this evidence that our take-up of broadband is embarrassingly low by world standards, you’d think that the Federal Government would act to make sure that we have a regulatory regime that ensures competition and drives down high access prices.

“Labor will continue to champion the cause of competition in the telecommunications sector because we understand, and have understood for some time, just how critical new technologies, such as broadband, are to national interest.”

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The NOIE report can be found at: www.noie.gov.au/allenreport

Media Contact: Jo McMillan (03) 5127 1066 or 0408 545 349