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Telstra's tactics push Australia down the global broadband rankings.

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Senator Kate Lundy

Senator for the Australian Capital Territory Shadow Minister for Information Technology and Sport

Telstra’s tactics push Australia down the global broadband rankings

A recent OECD Report has shown that Telstra has deliberately delayed the introduction of broadband technologies in order to use its market domination to get the jump on any competition.

This has contributed to Australia’s slide down international broadband league tables.

The OECD Working Party on Telecommunications and Information Services Policies, specifically refers to the spoiling role played by Telstra in Australia’s broadband market, noting that Telstra was responding to the “potential threat of competition” when choosing to roll-out cable rather than ADSL in 1997:

“Telstra’s choice to launch cable modem service four years ahead of DSL is notable. As the incumbent, had Telstra launched DSL it would undoubtedly have had to make a wholesale offer available to competitors. On the other hand, by first launching cable Telstra could meet any potential competition that emerged from other facilities providers using cable or DSL.”

[Source: OECD Working Party on Telecommunication and Information Service Policies, “Broadband and Telephony Services over Cable Television Networks”, p. 24.]

These spoiling tactics are typical and they raise questions about Telstra’s motives for delaying until recently the provision of an untimed ISDN internet services to residential customers.

Once again it appears that Telstra has held back from providing a new internet service that would benefit consumers until it could optimise its market position by doing so.

It is because of these and other tactics that the OECD has found only 1.9% of Australians have broadband and that Australia has slipped to 19th in the OECD in terms of broadband penetration, well below countries such as Canada, the USA, and even Iceland.

Meanwhile, the Minister has made no effort to stop these kinds of activities from occurring. He sees broadband as little more than an entertainment medium and has no comprehension of the economic importance of broadband to small businesses - particularly in regional areas.

18 June 2003. Media contact: Adina Cirson - (02) 6277 3334 or the Electorate Office - 0418 488 295.