Will Australia’s digital divide – fast for the city, slow in the country – ever be bridged?


This article is by John Rice, Professor of Management, University of New England and Nigel Martin, Lecturer, College of Business and Economics, Australian National University. It originally appeared on The Conversation.

opinion/analysis This week the Productivity Commission released an issues paper as part of an inquiry into the adequacy of Australia’s Universal Service Obligation (USO) for telecommunications, in light of changes in technology and demand.

The USO was formulated in a different age when the internet was in its infancy. Today, its requirement to provide access to standard telephone services and payphones to all Australians is akin to mandating the availability of horse and buggies by carmakers operating in the age of the Tesla.

Indeed, Australia’s USO probably needs to be considered in the light of a largely converged and complex telecommunications environment.

The issue is shaping up as a sleeper in the current federal election, especially in the bush. During Tuesday night’s episode of Q&A, telecast from regional Tamworth (400 km north of Sydney), the issue featured prominently. Tony Windsor, who is running as an independent candidate against deputy prime minister Barnaby Joyce in the seat of New England, received the biggest cheer of the night when he said of telecommunications infrastructure: “do it once, do it right and do it with fibre”.

City dwellers might be forgiven for thinking that this is the latest, high-tech version of the “whingeing farmer” syndrome. They would be wrong. Rural Australia has very real and legitimate concerns regarding the growth and probable permanency of the digital divide.

For many years regional Australians have had to contend with demonstrably inferior internet speed and reliability than their fellow Australians. This problem is compounded by the fact that their need for broadband services is greater than their urban cousins due to the importance of broadband for education, healthcare and business.

These additional connectivity requirements are increasing exponentially as technologies like Smart Farming, remote sensing and genomics create vast amounts of data. These are agricultural examples of the Internet of Things – an emerging paradigm that promises huge improvements in agricultural efficiency and environmental management, but requires constant and unconstrained internet access.

Like most public policy dilemmas, it’s all about money. Labor’s initial policy was full Fibre to the Premises (FTTP – the Rolls Royce option) but its policy these days is looking increasingly similar to the Coalition’s – with both looking quite different from Tony Windsor’s “do it with fibre” admonishment.

It has been estimated that the full FTTP option to all (or the vast majority) of Australian homes and businesses would cost an additional $30 billion. In the context of Australia’s current and likely future fiscal situation, this has been seen in Canberra as too much to spend.

The reality on the ground (or in fact in orbit) is the NBN’s Sky Muster satellite (launched in 2013 and switched on this month, with another launch soon to follow). According to an NBN spokesperson, there are 600 technicians connecting homes as fast as they can and by mid-year 2017 around 85,000 premises will be connected.

This multi-billion dollar investment certainly improves internet access for rural and remote Australians but it also sets a constraint as to what regional Australians should expect in the future.

Sky Muster is decidedly akin to a Holden Commodore (but at least not a Kingswood) in comparison to the FTTP’s Rolls Royce. It’s fair to say rural users are generally much happier with these new services than the historical interim arrangements. However it is also clear that what Sky Muster offers will be inferior to what is being offered in the cities, potentially cementing for the foreseeable future regional Australia’s “second class” status.

The essential problem with Sky Muster and similar satellites are their innate physical limitations. While this is true of all network technologies, there is real concern that user demand, especially at peak times, will quickly overwhelm the satellites’ capacities creating the need for ISPs to shape user download speeds.

One consequence of this will be downtime for important synchronous activities like e-conferencing and the like, but also a lack of functionality in the emerging IOT systems that require an unconstrained, always-connected network state.

Another problem relates to cost. Urban consumers are used to paying around $100 per month for unlimited and relatively reliable broadband complementing fast 4G cellular when they are away from home. Early Sky Muster plans are slower and offer far less data, especially during peak times when people are actually awake.

Rural communities are rightly concerned that the launch of Sky Muster may well be as good as it gets. While this is clearly better than what the country people have had, the divide between the bush and the cities in this and other areas is seemingly becoming wider and more permanent.

So, as the Productivity Commission grapples with the question of what the USO should look like in 2016 it will really need to consider what it should look like in a decade or two. This question will challenge the Commission’s rationalist economic predilections.

The answer relates not so much to the current and future economics of accessing the internet but more so the nature of fairness in Australia. The key question is how willing we are as a nation to see rural Australia fall further behind the cities in this fundamental aspect of our national infrastructure.

By John Rice, Professor of Management, University of New England and Nigel Martin, Lecturer, College of Business and Economics, Australian National University

This article was originally published on The Conversation. Read the original article.


  1. Not with white elephant, high 600ms latency, heavily congested, measly data capped NBN satellite , with the second satellite not being used as backup.

    Neither with stop gap measure fixed wireless they are slapping up in high concentrated regional areas against the wishes of the community.

    When it should only be used for hard to reach places and simply fraudulently adding connections to their list to cook their books just like HFC.

    Some can’t even get it because line of sight issues, still requires faulty telephone lines connected, and serviced no doubt with a rental fee ?

    I have no doubt is just as insecure as LTE and any encryption key could be recovered from the devices. I bet it’s the same key on all devices but someone would have to check. LTE is crap and so is this. Just like any router they hand out will sit unmaintained and riddled with security holes.

    Fibre for farmers and they can use point to point ubnt rockets to connect any automation technology backed up to fibre.

    Such things will fall over, time out and drop packets with their wasteful satellite. Just as unproductive as faulty copper.

    They are condemned into scammy mobile if they can even get that I believe to be leeched on from by the telcos.

    • BTW, you do realise that the second satellite was never going to be a backup just sitting idle. That is some spin from the Libs. The idea was to have two satellites doing the job in case one broke down they could switch people over to the one that still worked and least had some connection. If it wasn’t for them doubling the number of people connected to the satellites people would have 300G quotas (or they wouldn’t need to limit at all since, for now, most people would use way less than this) and there wouldn’t be such a during peak times.

  2. Will Australia’s digital divide – fast for the city, slow in the country – ever be bridged?

    Answer – Under a coalition government – NEVER

    • “Answer – Under a coalition government – NEVER”

      That’s a lie. They’ve done a wonderful job of dragging city speeds down to rural levels.

    • I’d be more concerned about the rich / poor digital divide. We are already seeing that only 16% can afford the fastest NBN speed (100Mbps). Labor predicted that in 2026 less than 1% would have 1Gbps speeds.

      The fact that it has been 6 years since Labor announced 1Gbps connections and almost 3 years since wholesale plans were made available suggests that RSPs don’t think the demand exists at a price they can deliver the 1Gbps plans.

  3. Rural and regional towns should have just as much right to high speed quality broadband as do their city counterparts. Preferably fttp. As was the Nbn original plan. Fttn is simply not fit for future demands let alone current demands. Fixed wireless has its place in difficult to service areas and satellite should be reserved for remote areas.
    But honestly, why is it so difficult to to roll out fttp to at least 93% of residences? Cost should not be the determining factor. It should be regarded as an important and essential service infrastructure same as for roads, electricity, etc .
    I honestly don’t know how we ever built a national copper network in the first place. If these clowns were in charge of that rollout today, it would never have been built.. no vision..

  4. If I pay $88 for HFC I am not forking out another internet connection for mobile that I barely use, that is insecure as LTE is insecure by design and phones don’t run firewalls. Then I don’t believe mobile is complementing it. mobile is a scam.

  5. I would like the commission to mandate that copper lines currently capable of carrying ADSL2 are maintained to that standard until such time as they are replaced with fibre. None of the current NBN policies say this (in fact they say the opposite – that NBN services mean copper can be ripped out, even when those NBN services are … satellite). An NBN which perversely causes downgraded services in many rural towns is going to be cop a lot more flack than one which fails to deliver a significant upgrage.

    • I would go further and suggest that for many regional towns that would have seen their ADSL ripped out by a Labor Government and replaced by wireless that FTTN would represent a significant improvement.

      Of course the better direction would have been to simply pay Google $20 billion to install fibre / Loon across the country would have been a better option. Another alternative would have been split the country into zones (121?) and put the concessions to install and operate a fibre network out to tender. This would have eliminated the hidden cross-subsidy taxation and in dense metropolitan areas enabled competition.

  6. The 93% plan was the only one that had any future proofing prospects for the ‘bush’ (7%) ever getting an equitable upgrade to FttP any time soon.

    Now we have to finish the MTM and recover from the expense (if that’s possible). Then upgrade to 93% FttP and then after all that maybe if its not been sold will any profit be able to slated to upgrading the last 7%!

    If its sold to a private entity that isn’t forced to do it under legislation then kiss goodbye to the fibre footprint expanding any further as suddenly share holders will matter more.

  7. I’m currently in Bright, Victoria and the internet here is just woeful. The weird thing here is that everyone gets good DSL sync speeds back to the exchange but the congestion around peak and non-peak times is woeful. Even Telstra mobile is pretty bad, when you can get it.

    Given that it is all Telstra kit and fibre up here one can only assume there are backhaul problems but no one will investigate because the NBN is coming. FTTN/FTTP is suggested to be available in 2018, but NBN are already promoting SkyMuster here and I worry we’ll be shunted off to Satellite.

  8. I’m guessing that the digital divide will no longer exist about the same time that I can buy – even just a few acres of inner city land – at rural prices.

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