Communications Minister Helen Coonan is quite right to kick back at the various media and telecom types who say Australian broadband is a disgrace. She spent quite a bit of time at a speech on Friday outlining some of the impressive growth statistics of Australian broadband and even pointing out that the much-ballyhooed 17th out of 30 in the OECD ranking doesn’t look so bad when you look at how small and densely populated many countries above us in the list are.

I’d go further and say that Australia’s broadband ranking — as with our rankings on many measures — is more a consequence of our per capita income ranking than public policy failure. On income, we come in at around 12th. As any economist will tell you, wants — broadband or nonbroadband related — are unlimited, the way to satisfy them is through making more income or lowering one’s expectations.

And don’t tell me that a massive investment in broadband is the key to maximising national income: if we look at broadband nirvana South Korea we see one of Asia’s slowest growing economies, beset with huge personal debt problems and an economy fuelled almost entirely by exports to China. Korea’s ICT policies have some fans, but picking winners with subsidies and policy choices has downsides. For example, exactly how do Samsung and LG benefit from the fact they can’t even sell a GSM phone in their own country?

Coonan was quite right to question whether Korea’s massive public investment in broadband has been really worth it in terms of economic spin-off. A number of Korean government and telecom identities will be in Adelaide this week for a summit. I challenge those in attendance to ask the Koreans one simple request –show us the cost-benefit analysis that vindicates your policy. They won’t because they haven’t done one.

Australia, by contrast, has an extremely open economy where investments are largely dictated by genuine incentives and returns, and, more specifically, boasts a competitive and relatively sustainable telecom industry. And for all the naysayers who label broadband a disgrace, I say stop denigrating the amazingly longish list of Australian milestones in telecoms — indeed, a remarkable success story given our middle-income ranking in the OECD.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey