Telecommiunications infrastructure in Australia
...ined, regardless of commercial interests and cost .The federal government has also set pricing caps on various services up until 1 July 2005, in order to further ensure universal access to these services, (Telstra annual report 2003, p 39-44) As new technologies are discovered and are made available elsewhere in the world, the need for business consumers to gain access to these advances here in Australia is important in order to remain globally competitive. Rapid changes in telecommunications and information technology field are leading to reduced costs as well as expanded capabilities for business. As more competitors enter the telecommunications market, the pace and regularity of new technologies being introduced will increase, leading to even greater advantages for Australian business, (Telstra annual report 2003, p 10). Household consumers also benefit greatly from a competitive telecommunications industry. The price of most telecommunications services has decreased drastically since the introduction the government’s current regulatory regime in 1997. Since then there has been a significant increase in the number of service providers in the market, which has seen the size of the overall telecommunications market increase. Rural population densities in Australia are lower than most other industrialized nations, and as a consequence, the cost of providing telecommunications services and infrastructure is increased, (Productivity commission 2001, p13). In order to ensure these regions are not disadvantaged Telstra is subject to, Universal Service Obligations. The main objective of the USO is to provide equitably priced telecommunications services and infrastructure to all Australians regardless of location. Currently Telstra is the only telecommunications provider in Australia to be subject to a USO, however; it is envisaged that other service providers may in future be subject to similar arrangements, (Productivity commission 2001, p18). Since the advent of a competitive marketplace in the telecommunications industry, the amount of money spent on research and development has greatly increased. Industries in which there is no competition do not need to spend large amounts of money on research because there are no competitors, and therefore; no choice for consumers. The more players there are in the marketplace, the more money is spent on research as each competitor seeks to gain some kind of advantage over their rivals. In a highly competitive market like telecommunications, innovation plays a major role by giving an advantage to the companies who can provide services by making best use of the resources available at the lowest cost. This has obvious flow on effects, in that; the most innovative companies gain more market share and therefore generate more revenue, leading to greater amounts available for further research. Opponents of private sector ownership of the telecommunications industry generally use three main arguments to state their case for continuing public ownership. Firstly the argument that since the majority of the telecommunications infrastructure, which Telstra now owns and maintains, was constructed with public money it should therefore remain publicly owned. The obvious problem with this argument is it fails to take into account the high costs involved with the ongoing maintenance of the infrastructure. Since the government no longer generates any revenue ...