National Competition Policy and Broadband Provision in Australia

Abstract

National Competition Policy (NCP) implemented in Australia from 1995 has had a profound effect on the mode and level of service delivery in nonmetropolitan regional and rural areas. The implementation of NCP followed the lead of other countries in corporatising, segmenting, and privatising many state and national government services and utilities and promoting open global competition as the framework for service delivery in the future. As government moves out of the role of service provision and into the role of industry regulation, there has been significant jurisdiction shifting in terms of responsibility for services, as well as reduced subsidisation for the cost of service over distance: subsidisation that was previously enabled through government-owned nationwide monopolies. This is more of an issue in Australia than in many other countries due to the large landmass and relatively small but dispersed population. Unlike many other countries, however, Australia has been slow to increase the proportion of overall tax revenue given to local government bodies to ensure regional service delivery or to impose community service obligations (CSOs) at local levels. Confused local bodies have been left to build expensive business plans to attract new services in areas for which they currently have little or no funding, and in which they previously had no responsibility or expertise. Local bodies are currently being requested to aggregate demand across government, private, and residential customer bases. Management of the delivery of broadband services is an example of the confusion faced by regional bodies in Australia in the wake of a recently corporatised government utility and a liberalised telecommunications environment.