Please forgive me if I come across as a little smug, but I’m a proud Australian today – to the point of being insufferable – and, with all due humility, I contend that the USA could do much worse than be guided by what is now afoot in the land of my birth.
Australian telecommunications services were once wholly owned by the taxpayers of that country. In 1995 the company providing them – known as Telstra – employed almost 87,000 people and provided telephone services over the entire continent. Even the most remote of Aboriginal communities could boast a public telephone connecting it to the outside world.
Granted, it had its inefficiencies, but it did provide innovative solutions to providing a modern service to the inhabitants of this planet’s most sparsely populated continent. Back in the ’70s, for example, the vast emptiness of the Nullarbor Plain, which in the south separates the east and western halves of the continent – once almost as effectively as any barbed-wire entanglement – was bridged by a chain of solar-powered relay stations, replacing the old steel post and copper-wire lines. And Telstra made money, big heaps of money, for its taxpayer owners, despite its perceived inefficiencies.
It was all very comfortable. It worked pretty well and the public could enjoy a service as good as any in the world and grizzle about the inefficiencies of Telstra and its staff and how bad the service was and that it sometimes took three days to get a phone line repaired: “Geez, Blue; we’re only 400 bloody miles from Port-bloody-Lincoln. You think they’d get some bastard up here quicker than next Choosdee.”
Then along came the pundits of the New Economics; the Golden-Arsed Horde of the New Bonanza. They held that anything making a profit, especially a big profit, should not be in government hands. Governments, they said, are inefficient and have no business in business. And the government of the day agreed. It began selling off the taxpayers’ stake in the corporation in 1997, a process which by 2006 had seen their holding reduced to 17 per cent.*
By the time the second share issue went on the market, the public was becoming a little concerned. Service was already slipping, people were being laid off in their thousands, the executive salaries were increasing by leaps and bounds and costs of services were rising and service standards were slipping. However, we were assured these were just “teething problems”. The then Prime Minister, the unlamented John Winston “Bonsai” Howard – he thought he was a little Bush – repeated the mantra: governments have no business in business.
Howard was also fond of fatherly reassurance in the form of the classic saws of New Economics reasoning. By putting the shares on the market at an affordable price, he would say, the Mums and Dads of Australia could become part-owners of a giant corporation. He neglected to remind us that the Mums and Dads of Australia had once owned 100 per cent of what was now a corporate bully that had been created to take a monopoly from the hands of the taxpayers who could now buy back into it and help it become bigger, even more profitable, less efficient at everything except increasing golden handshakes to executives and more interested in buying out other businesses than in concentrating on telecommunications as they were once defined. The Wide Boys of the stockmarket also did well, managing to con lots of money out of these new players on the market.†
By 2009, not only had Telstra shed some 44,000 jobs, it had become far, far worse than the monster we were told it had been under taxpayer ownership. So pervasive had it become that then Minister for Broadband and Communications, Senator Stephen Conroy, said that the giant could either “break itself up or we [government] will do it for them”. Labor had been returned to power and under new Prime Minister Julia Gillard decided to make good on a previous election promise to roll out a high-speed national broadband network to put Australia back in the communications game.‡ Just recently, the National Broadband Network Co (NBN), the body set up to oversee the project, released its business plan. As an Australian born and bred, to say I’m thrilled, if not awestruck, is to put it mildly.
To put this project into context, I’m going to preface what’s to follow with the state of things internet at Butterfly Bottom, near Stamping Ground Kentucky, and in the USA generally. Since moving here I have been achieving connection speeds of far less than half of what my plan once claimed for itself¶ and the national picture is not much better. The FCC’s most recent data indicates that 68 per cent of residential connections in this country fall below the 4Mbs download (dl)/1Mbs upload (ul) benchmark. Approximately 58 per cent of connections failed to even reach 3Mbs dl and 49 percent fell below 768Kbs ul. This is an appalling state of affairs in this, the country that invented the computer and its prodigious offspring, the WorldWideWeb.
Meanwhile, back in Australia, the NBN has begun the task of providing the opportunity of internet access – either by wireless signal, by fiber-optic cable or by satellite – to every home and business in the country.
Let’s start with the easy part. It is launching two Ka-Band satellites that will provide download speeds of 12Mbs to those users too remote to receive service by the other options, but then it gets a little harder. NBN has pledged to run fiber optic cable past 5000 homes and businesses a day, every day, for as long as it takes until no-one in Australia, Earth’s most sparsely populated country, is denied the opportunity to connect to the internet by one of the three methods mentioned. Connection speeds of 100Mbs will be achievable by most users and even the “slow” satellite option is pretty impressive. The whole national communications network is being rebuilt in what is among the most massive undertakings anywhere on this Earth.
Of course there are critics. Telstra, part owner of Foxtel cable, and its big shareholders, News Corporation aka Rupert Murdoch among them, are severe critics. One News Corp paper has been running negative stories for months, even going so far as to make a front-page claim that to connect an average household to the new system will cost $400 a room in cabling alone, though to be fair, the editor may be unaware of wireless connections and may not have known where to get a quote to run cable.
Respected Australian commentator Richard Kohler, writing in Crikey and Business Spectator, does have some criticisms but, in concert with most writers it seems, is largely optimistic. He writes that revenues and projected growth have been strategically understated, not allowing for the huge rise in home-movie download rates or the “non-premises” connections that will accrue: traffic lights, train stations, ATM terminals and security cameras, to name just a few. Kohler points out that the network could be sold after a couple of decades to create an enormous sovereign wealth fund or, alternatively, kept in the hands of the taxpayer.
It’s this last option I favor and would exhort any future government to do the same. Privatising our once-great telco was a mistake of monumental proportions. It proved once again, if any further proof were needed, that CEOs of some giant corporations are capable of great things, while others are little more than greedy brigands, devoid of ethics or conscience. It’s often said – usually by those with most to gain – that if you pay peanuts you will get only monkeys to work for you. I’d argue that if you hand out macadamias, all you’ll attract are greedy gorillas.
Aussie-Aussie-Aussie! Oy, oy, oy!
*This holding was placed in a “future fund” with the aim of providing superannuation and pensions for Australia’s federal public servants into the future. It’s interesting to note that in 2009, the fund sold off 7 per cent of its Telstra shares.
†Selling shares in formerly government-owned companies to Mum-and-Dad investors, largely inexperienced in stock-market shennanigans, makes good New Economics sense. When people begin to voice concerns over mass sackings and the effect they might have on their grandkids’ job prospects, they can be reassured by telling them that they are necessary to protect the profitability of the company and so the value of their shares. “If we didn’t do it, you wouldn’t have an inheritance to leave them or be able to help with their education/new home/new car/trip to Europe.”
‡Telstra was excluded from the tendering process and responded in part by improving connection speed in major population centers.
¶My mid-range plan, cost, $49.99 month, delivered an average of 0.256Mbs dl and 0.03Mbs ul. Puzzled by a sudden increase in dl speed ( a blistering 0.561Mbs) I checked on my ISP’s claims before beginning to write this. It seems that without being told, my plan is now renamed and is at the bottom of the three offered (I am awaiting confirmation of this from my ISP, Wild Blue). For another $20 a month I can shift to the speed offered by my original plan (1Mbs dl) but if I did it’s pennies to a quid that the most I’ll ever achieve will be in the 0.500 range.