Nation-building in Australia has generally been neglected since major government-led infrastructure projects such as the Sydney Harbour Bridge and the Snowy Hydro Scheme were completed. The rise of ‘economic rationalism’ in Australian policy (see Pusey 1991), which has seen a shift from government-led to business-led infrastructure development, is often blamed for contemporary infrastructure problems. Aside from government neglect of infrastructure, the shift from public to private funding has created its own problems, particularly in the way that governments have attempted to keep the details of public-private partnerships shrouded in secrecy (see for example Scott & Allen 2005). Consequently, the public’s support for major, government-led engineering feats has not been forthcoming for private sector infrastructure projects, despite the obvious engineering significance of major private-sector projects (Shepherd 1999). In some instances, businesses have agreed to commercial documents being released for public scrutiny but it has been governments who have resisted. For example, public-private partnership projects such as Sydney’s Cross City Tunnel have been the subject of significant public opposition (Smith 2005)^[11] toward both the public and private proponents of the project with many citizens regarding themselves as ‘collateral damage’ in the negotiation process (Fullerton 2006). Changing the provider of funding for infrastructure projects has not changed the single policy solution. In the foreseeable future, it is unlikely that Australia will reduce the use of public-private partnerships to fund large infrastructure projects. Nevertheless, consumer groups are concerned that governments will ‘sell out consumers’ long term interests by caving into industry pressure’ in their ‘haste to appear to have the instant answer on broadband’ (Choice 2007).

The major differences between Australia and Canada are reflected in the two approaches to deploying broadband networks. Lehr et al (2005: 3) provide a simplified explanation of these two approaches, in that the differences ‘may be caricaturised as a battle between the traditional service provider business model for providing network services versus one based on end-user equipment’, with Australia adopting the former, and Canada more closely resembling the latter. History has influenced the current structure of Australia’s telecommunications industry and the impact of technological convergence on policy-making has been neglected for many years. This has led to false industry boundaries between the telecommunications and various media industries in Australia, where regulation is designed predominantly for communications industries which remain traditionally structured on devices rather than functionality.

The phenomenon where industry changes remain elusive is often referred to as ‘excess inertia’ in game theory where ‘no one benefits from the new [way of doing things] alone, [so] each participant may rationally stick to the old, inefficient [way of doing things]’ (Boyer et al. 2001: 406). For example, competitors in the Australian telecommunications industry are often restricted to second-mover strategies (for an overview of the concept, see Hanson et al. 2002: 168-9) because of Telstra’s market dominance. This forces competitors to ‘imitate’ the market leader rather than venture new approaches (Boyer et al. 2001: 406-7; see also Dosi cited in Carter 1981: 182-202). Moreover, successive federal governments have encouraged Telstra’s competitors to imitate the market leader by persisting with outdated industry structures. Telstra Chief Executive Officer Solomon Trujillo (Trujillo 2006) refers to these converging sectors as the ‘media communications’ industry and the term is adopted here to differentiate the new industry from the traditional telecommunications and media broadcasting industries.

Local interests persist despite the Australian preference for national communications solutions and federalism is an important element in addressing these competing local and national interests. Indeed, federal systems have traditionally provided political solutions to overcome political issues associated with uniting regional jurisdictions and interests into a single nation-state. However, the secrecy and push to further centralise power under the Howard regime impacted upon communications policy and has effectively limited the involvement of local and regional interests in the policy process (Sainsbury 2006). Centralisation of power is important from a social capital perspective, in that the institutions of government ‘set the rules: ‘routines, procedures, conventions, roles, strategies, organisational forms and technologies around which political activity is constructed’ (March & Olsen 1989: 22). The centralisation of power can, over time, become the ‘new way of doing things’ which decreases opportunities for local and regional institution-building. Crick (Crick 2006) suggests that social capital is reduced where political activity is restricted to certain ‘non-revolving’ elites by providing little opportunity for others to add to the debate. In Australia, this occurs at two levels which are absent in Canada. First, the centralisation of power in the federal government reduces the ability of sub-national governments to deal with regional and local issues. Second, traditional industry boundaries mean that businesses compete in the market on functionality, but are regulated by the devices used to provide the function. Each level of restriction contributes to the latent protection of entrenched interests, thus reducing access to citizens both as policy participants and users of technology.

Canada’s ‘oscillating legitimacy’ between federal and provincial custodianship is noticeable in the media communications industry and improves citizen and user access to policy debates through greater policy transparency. For example: ‘It is decidedly wrong to say that only the appropriate provincial legislature can regulate what its provincially incorporated companies do in any respect. It is likewise wrong to say that only the federal parliament can regulate what federally incorporated companies can do in any respect’ (English 1973: 344). This institutional arrangement is largely responsible for Canada being a world leader in broadband infrastructure and services. According to the OECD (Organisation for Economic Cooperation and Development (OECD) 2002: 6):

Canada has focused on ‘technological neutrality’^[12] in determining the structure of the industry for cross-platform competition purposes. The integrated regulatory system supports competitive practices through the CRTC’s ‘mandate of making the telecom market as competitive as possible’ (Surtees cited in Martin 2003). This approach does not only focus on large competitors such as Bell Canada, Telus and Rogers Communications. Indeed, decisions by the CRTC demonstrate that federal policy can be actualised for smaller entrepreneurial firms. For example, Xit Telecom, a Quebec-based private fibre network developer, tested the policy by complaining to the CRTC that the large providers were selling dark fibre^[13] to ‘end customers at rates less than the cost of new construction, while charging more to potential competitors’ (see Martin 2003). The CRTC ruled that Bell Canada and Telus Communications (Quebec) were to ‘file proposed tariffs for inter-exchange dark fibre access’ to promote competition in the private network market to lower costs to potential customers. The complaint was lodged in April 2003 and the CRTC’s Telecom Decision CRTC 2003-59 was issued on 22 August 2003. The CRTC often resorts to its ‘expedited procedure for resolving competitive issues’, enabling rulings on competitive issues to be delivered relatively swiftly. Obviously similar examples of competition regulation exist in Australia, but this case relates directly to competition policy enabling private networks to be built on a competitive basis, not simply the wholesale pricing issues often associated with the battles between Telstra and the ACCC.

In Australia, the Business Council of Australia (BCA) (see Maiden 2007) has recently called for ‘greater investment on the ‘supply side’ of the economy’, particularly in the areas of infrastructure, skills and workforce participation. In its report entitled Infrastructure: Roadmap for Reform, the BCA (Business Council of Australia (BCA) 2008b: ii) suggests that insufficient infrastructure development in ports, roads, rail, power, and water require a ‘cross-jurisdictional framework for appropriate, timely, and coordinated investment in infrastructure to meet future growth needs’ along with the ‘development of fully operational national markets’ as essential reforms (see also Williams 2008). The report also states that broadband services are problematic in terms of low penetration and speed of broadband services. However, while broadband networks are regarded as important, and it is recognised that Australia’s broadband services are falling behind the rest of the developed world, very little attention is given to the details. For instance, the BCA’s focus on the ‘development of a quality broadband system with comprehensive access for businesses and households’ (Business Council of Australia (BCA) 2008b: 8) is, unlike all the other types of infrastructure mentioned in the report, given no indication of the anticipated improvement to Gross Domestic Product (GDP) (Business Council of Australia (BCA) 2008b: 6). Further, communications infrastructure occupies just a few lines of the report, leaving government to provide a ‘policy framework that can stimulate the investment required to match a clear view of the productivity and innovation advantages available from higher broadband speeds, a view of the competitive framework for access, and a statement on implementation timing’ (Business Council of Australia (BCA) 2008b: 14).

There are two reasons for the BCA to expect the government to provide direction on the communications network. First, the federal government has constitutional responsibility. Second, and more importantly, the federal government has always dealt with communications policy.