Affordability the Biggest Barrier to Broadband Access

March 3, 2014
Ministerial Feed

Statistics released by the ABS last week show that affordability is the biggest barrier to broadband access in the home.

Affordability continues to be a key area of concern in terms of broadband policy.  The NBN’s recent Strategic Review (online here, p.68) found that Labor’s approach to the deployment would have led to monthly Internet bills rising by up to 80 per cent, or $43 a month.

The Australian Bureau of Statistics found that those households in the bottom 20% of income earners  were more than 10 times more likely to have no access to the Internet at home than those in the top twenty per cent..

The ABS also found the top income bracket were much more likely to access a smart phone or tablet at home, too – this was true of 42 per cent of total households in the top income bracket compared to 24 per cent in the bottom bracket.

Of course part of the explanation for the digital divide is correlation – not only do lower income households struggle to afford a decent broadband service, but they are also more likely to be older and are less likely to have gadgets such as smartphones, which rely on Internet connections.

Swinburne academic Robert Morsillo published an important study on Internet affordability in the Telecommunications Journal of Australia in 2012 (online here), which found that those who thought their current Internet service was unaffordable, were naturally more likely to be negatively disposed to connecting to the NBN (p.80.8).

Hence, if one important policy objective of the NBN is to increase access to the Internet, it is absolutely critical that the capital cost is no more than is absolutely necessary. As I said in the House today, the consequence of an over capitalised Government telecom monopoly is inevitably going to be higher prices, which will mean that far from increasing access to the Internet, we will see more and more Australians priced out of Internet access. A broadband policy which has social equity as an objective must have affordability, driven by prudent levels of investment, as the highest priority. 

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