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AUS: National Bandwidth Inquiry Discussion Paper

MEDIA RELEASE

Australian Information Economy Advisory Council

AUS: National Bandwidth Inquiry Discussion Paper Released For Public Comment

Public comment is now invited on a discussion paper released today by the Australian Information Economy Advisory Council (AIEAC) sub-committee conducting a National Bandwidth Inquiry.

The Inquiry set up by the Minister for Communications, Information Technology and the Arts, Senator Richard Alston in December last year is looking into bandwidth availability and pricing within Australia as well as to and from Australia. (The Terms of Reference are attached.)

This discussion paper provides information about likely bandwidth availability and pricing between 1999 and 2004 based on work undertaken by the inquiry to date. The paper also canvasses strategic issues for the communications markets raised by the transition to a data-based way of providing all communications services.

In keeping with its terms of reference, the primary focus of the Inquiry has been on the backbone network capacity. This work complements and builds on work already undertaken by the Australian Communications Authority's digital data inquiry in relation to the customer access network. However, the Inquiry has inevitably had to consider the Australian communications market structure in its totality, which has meant that there is some discussion of customer access issues.

Some of the preliminary findings of the Inquiry, based on capacity surveys, demand modelling, and some pricing surveys and modelling, on which comment is sought, are that:

There is a paradigm shift from a voice circuit switched based technology to and data IP based technology which is changing the economics of communications services.

The changes in technology should ensure that in most markets, Australia will have potential trunk capacity well in excess of most demand scenarios.

However, the ownership of the capacity is very concentrated.

The price of wholesale bandwidth is estimated to fall by 30 - 50 per cent per annum for the next five years on the intra-capital and inter-capital and other thick route markets, although falls in retail prices will be less.

The move away from uniform, averaged, distance dependent pricing structures will continue into the future.

The discussion paper also canvasses a range of potential issues for policy consideration thrown up by its findings about the market outlook for bandwidth, and the transition to a data based world.

Comment is invited on the analysis, data and issues raised in the public discussion paper.

The discussion paper and other documentation may be obtained from the website of the National Office for the Information Economy in the Department of Communications, Information Technology and the Arts-www.noie.gov.au (choose 'National Bandwidth Inquiry' under Hot Issues) or by contacting the National Bandwidth Inquiry on 02 6271 1601.

The closing date for comments is 15 October 1999

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