Labor broadband inquiry rejected by Senate

A Labor and Democrats attempt to force a Senate committee inquiry into the state of broadband competition in Australia has failed after the government gained support from independent Senators to reject the request.

The call for an inquiry came one week after the Australian Competition and Consumer Commission (ACCC) released figures claiming that broadband take-up is "flat", but in contrast it showed that broadband take-up has doubled over the last 12 months.

Shadow minister for IT, Kate Lundy, assured ARN that she had the support of the Democrats and the Greens in order to force the inquiry, but the government and independents yesterday rejected it, describing the inquiry as “a waste of taxpayer’s money”.

The Department of Communications and IT claimed a Senate inquiry was already taking place after the Labor Party called for it in June 2002, but the Senate is yet to report on its findings and is nine months overdue.

Minister for Communications and IT, Senator Richard Alston, said that on his request the ACCC recently launched an inquiry into Internet interconnection.

“The proposed new Senate inquiry would only duplicate work on this issue,” he said.

He noted a number of other inquiries that have made recommendations on higher bandwidth services for rural and regional areas, including competition aspects of higher bandwidth pricing.

The report issued by the Broadband Advisory Group (BAG) that was handed down in January covered most of the issues addressed in the proposed Senate inquiry, including competition, and recommended that the government adopt a national strategy on broadband.

Labor claimed that broadband take-up in Australia is lagging, and Lundy told ARN that a stronger broadband growth rate would allow Australia to compete against the rest of the world in terms broadband take-up.

“At the moment, Australia is ranked 19th in the world for broadband penetration according to the Organisation for Economic Co-operation and Development (OECD),” she said.

“With relative broadband growth, Australia should be the best in the world, but at the moment broadband growth is falling because of a lack of competition.”

Lundy blamed Telstra for a lack of competition in the broadband market, claiming that there is a clear case for more power to be given to the ACCC to enforce a more competitive regime.

“The ACCC is powerless against Telstra because of government policy.

“Consumers do not have a good reason to use broadband because service prices are too high and they are restricted by download caps.”

The Department of Communications and IT has defended the claims, saying that broadband take-up has increased significantly, noting a number of recent statistical reports.

As previously reported by ARN, a Nielsen/NetRatings report showed that broadband users had jumped 150 per cent since April 2002.

A spokesperson for the Minister for Communications and IT described the inquiry as unnecessary and unproductive.

The spokesperson said that growth rates may have declined, but broadband is still growing. He noted that the 16.5 per cent growth rate of 423,600 connections is more than 70,000 subscribers per quarter.

Last year, when the total was 199,800 subscribers, and the growth rate was 29.2 per cent, only 58,000 connections were made in the quarter.

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