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Monday, 24 November 2003
Page: 17682

Senator Brown asked the Minister for Communications, Information Technology and the Arts, upon notice, on 15 September 2003:

In regard to the provision of two-way satellite broadband access for rural areas in Australia: (a) What advantages or disadvantages does the satellite option have for remote communities compared with other options; (b) does the satellite option offer Australians in remote or rural areas services similar to those available in metropolitan areas: and (c) are any proposals being considered by the Government.

Senator Kemp (Minister for the Arts and Sport) —The Minister for Communications, Information Technology and the Arts has provided the following answer to the honourable senator's question:

(a) The key advantages of satellite may be summarised as:

Ubiquitous availability: Satellite technology is one of the few options for rural and remote residents without access to wireline broadband technologies. The main advantage of satellite broadband technology is that it enables the delivery of broadband to all Australians, in both urban and regional areas.

Reduced infrastructure and ease of deployment: With a terrestrial network, deployment and installation at new locations can be a complicated process. In contrast, a broadband satellite Internet connection is relatively simple and can be installed quickly as no additional infrastructure (other than customer premises equipment) is required.

Superior economics in certain situations: In less populous areas, broadband satellite technology can be much less costly to deploy, maintain and operate than terrestrial broadband network technologies.

Multicasting compatibility: Applications relying on multicasting information from one point to many users are best suited to satellite delivery systems, for example, webcasting conferences.

The disadvantages of satellite broadband technology include:

Costs: While the use of satellite technology to provide broadband services in some situations is more cost-effective than terrestrial solutions, the unit cost of two-way satellite services is relatively high compared to situations where wireline technologies can be economically deployed.

Inherent latency: Real time services like on-line games and voice or video-conferencing over the Internet are affected by unavoidable data latency. This is primarily due to the physics of operating a geostationary satellite 36,000km from Earth. However, some latency issues can be overcome by smart processing. Web surfing, file downloads and video-streaming are satisfactory using the latest satellite systems.

Inclement weather and obstructions: Rain, high-wind and snow may cause periodic lapses in service. Trees, mountains, or tall buildings interfering with the line of sight between the user's satellite dish and the orbiting satellite can also interfere with satellite signals.

(b) Yes, satellite services do offer Australians in regional, rural and remote areas services similar to those available in metropolitan areas, subject to the issues discussed above. In many circumstances, satellite technology is the only economically realistic solution.

Australians in regional, rural and remote areas have a choice of one-way and two-way broadband satellite packages to suit a range of residential and business needs. As noted above, the cost of satellite services is generally higher than services available in metropolitan areas. For this reason, the Government has established the Special Digital Data Service Obligation (SDDSO) and is now establishing the Higher Bandwidth Incentive Scheme (HiBIS).

(c) The Australian Government, like many commercial service providers, has long recognised the ability of satellite to provide access to higher bandwidth and broadband services in less populous areas such as regional, rural and remote Australia. This Government has undertaken a number of initiatives to improve access in regional, rural and remote Australia to higher bandwidth and broadband services delivered by satellite. In particular:

(1) Special Digital Data Service Obligation (SDDSO)

The Government introduced the Digital Data Service Obligation (DDSO) in October 1999. The DDSO consists of a general and special obligation. The general obligation requires Telstra to provide a 64 kbps ISDN service, on request, to the majority of the population. The Special Digital Data Service Obligation applies to the rest of the population that is unable for technical reasons to access the ISDN service.

The special obligation provides for the supply of a one-way satellite service that compares to the ISDN service. A rebate of 50 percent of the price, capped at $765, may be payable in relation to satellite equipment and installation.

(2) Extended Zones Agreement (EZA)

The Government committed $150 million from the proceeds of the second partial sale of Telstra to provide Australians who live in `Extended Zones' access to telephone calls and connection to the Internet via an Internet Service Provider (ISP) at the untimed local call rate. The `Extended Zones' are large Telstra calling areas covering the most remote geographic areas of Australia (some 80 per cent of the landmass).

Telstra was selected through a competitive tender process to provide untimed local calls and undertake an upgrade of the underlying infrastructure used to provide services to Extended Zone customers. Part of this upgrade included ensuring that customers on Digital Radio Concentrator Systems (DRCS) could access the Internet at speeds of at least 14.4 kbps, and untimed local call access to the Internet be provided in a competitively neutral manner. Telstra also committed to install two-way satellite services for Internet use, on a concessional basis within the Extended Zones, for a limited time period that has now closed.

(3) National Communications Fund (NCF)

The $50 million National Communications Fund (NCF) is assisting in the rollout of the infrastructure and applications to enable high-speed telecommunications networks to deliver education and health services in regional Australia. The NCF's objective is to achieve significant improvements in service delivery in the education and health sectors through funding large-scale telecommunications projects in regional areas.

The eight successful projects will improve the delivery of broadband education and health services in regional areas of Australia, including services such as clinical diagnosis and counselling (for example, teleradiology and telepsychiatry) and improved online delivery of primary, secondary and vocational courses to students. For example, one NCF project will install broadband satellite infrastructure to enable School of the Air Students in New South Wales and the Northern Territory to see, as well as hear, their school teacher and classmates for the first time.

(4) Higher Bandwidth Incentive Scheme (HiBIS)

The Regional Telecommunications Inquiry recommended that the Government establish an incentive scheme to enable Australians in regional, rural and remote areas to have access to higher bandwidth services at prices comparable to those in metropolitan areas.

In response, the Government will spend $107.8 million over four years on the Higher Bandwidth Incentive Scheme (HiBIS). HBIS will be a pro-competitive and transparent scheme aimed at improving equitable access to broadband services. It will provide incentive payments to higher bandwidth service providers to offer services in regional, rural and remote areas at prices comparable to those in metropolitan areas. A one-off per customer payment will be made to providers of higher bandwidth data services in areas where a defined minimum level of service, in terms of price and functionality, is not available. This will stimulate the take-up of higher speed services, enabling users to experience the economic, social and cultural benefits of the information economy.

A key principle of the HiBIS is technology neutrality. Service providers will be supported under the Scheme provided defined price and service levels can be met. It is expected that satellite technologies will play an important part in the scheme.

The Government is currently finalising the details of the scheme and is engaging in public consultation with key regional stakeholders and interest groups. The HiBIS is scheduled to commence in early 2004.