Regional telecommunications

Dinty Mather, Economic Policy

Key issue
Digital inclusion is the idea that everyone should be able to make full use of digital technologies to manage their health and wellbeing, access education and services, organise their finances and participate in the digital economy.
Generally, people in the regions face higher barriers to online involvement than in those in the cities—there is a digital divide.

Digital inclusion relates to access, affordability and the ability to participate in the digital economy. Access is increasingly regarded as an essential service.

The gaps between digitally included and excluded Australians are substantial and widening for some groups. This is particularly evident in most of the regions and among the vulnerable. This digital divide may result in a downward spiral of disadvantage.

The Australian Digital Inclusion Index

A research team led by RMIT University conducts a yearly survey to produce a comprehensive Australian Digital Inclusion Index (ADII). The ADII is designed to measure three sub-indices of digital inclusion. Each sub-index of the ADII is made up of various components that are built up from the survey data.

The access sub-index has three components:

Internet access: frequency, places and number of access points.
Internet technology: computers, mobile phones, mobile broadband, and fixed broadband.
Internet data allowance: mobile and fixed internet.

The affordability sub-index has two components:

Relative expenditure: share of household income spent on internet access.
Value of expenditure: total internet data allowance per dollar of expenditure.

The digital ability sub-index has three components:

Attitudes: including notions of control, enthusiasm, learning, and confidence.
Basic skills: including mobile phone, banking, shopping, community, and information skills.
Activities: including assessing content, communication, transactions, commerce, media and information.

The ADII compiles the variables into a score out of 100, where a score of 100 represents a perfectly digitally included individual.

The ADII scores for Australia have increased. Although the scores for rural areas have increased more quickly, they still lag behind the overall Australian score for digital inclusion:

The ADII for Australia as a whole increased by 5.8 points between 2015 and 2018, from 54.4 to 60.2.
The ADII for the areas classified as rural increased by 6.4 points between 2015 and 2018, from 47.5 to 53.9.

Remote region scores are likely to be even lower than the rural score. For example, a 2018 case study of the Ali Curung remote Indigenous community recorded an ADII score of 42.9, 17.3 points lower than the Australian score and 11.0 points lower than the rural score.

The ‘rural’ digital divide

The report found substantial differences between rural and urban areas:

In 2018, digital inclusion is 8.5 points higher in capital cities (62.4) than in country areas (53.9). … Over the past 12 months, the gap has narrowed in New South Wales, Tasmania, Victoria, and Western Australia, but expanded in Queensland and South Australia. (p. 6)

The difference between the ADII scores for capital cities and rural areas is one way of illustrating the digital divide in regional areas. The figure below shows this by sub-index of the ADII.

Figure: rural digital divide 2015 to 2018

Rural digital divide 2015 to 2018

Data source: J Thomas et al., Measuring Australia’s Digital Divide: the Australian Digital Inclusion Index 2018, RMIT University (for Telstra), Melbourne, 2018.

Two trends are apparent from the chart:

The digital divide between affordability and access is narrowing but still remains significant.
The divide in digital ability is has not improved since 2015.

ADII data is available arranged along socioeconomic, demographic, age, gender, education and by state/territory lines. Further details are available in the Australian Digital Inclusion Index.

Access to digital technologies is increasingly being considered an essential service. The other elements of digital inclusion—affordability and ability to use the technology—are equally important as enablers.

The 2018 report of the Regional Telecommunications Independent Review Committee (RTIRC) made a number of important observations with regard to digital inclusion.

First, lack of reliable access to fixed–wireless networks and mobile services, data limitations of the Sky Muster satellite service, and poor mobile coverage limits:

the ability for regional and remote businesses to thrive and access markets
full and reasonable access to health, education, welfare and other government services and
the ability of people to participate fully in social interactions and activities.

Second, the divide in digital ability and confidence is worsening in regional areas. Thus, even with reliable access, people cannot take full advantage of digital technology and become involved in the digital economy.

The report did not discuss in any detail the affordability of devices and data in regional areas, apart from recommending unmetered access to government websites.

Policy responses

Because of low population densities and sometimes extreme distances, the building of telecommunications infrastructure in regional and remote areas can be uneconomical. Government can intervene to ensure the provision of essential infrastructure, achieving this by direct delivery or by establishing incentives to private investors.

Access guarantee

Two main policy measures act as access safeguards. These are:

The universal service obligation (USO), provided by Telstra, ensures that all Australians have reasonable access to landline telephone and payphones.
The universal service guarantee (USG) ensures, through the national broadband network (NBN), that all Australian businesses and homes have access to both voice and broadband services.

The USG only updates the USO when customers have access to the NBN.

Access to broadband

Broadband wholesale services, or the means of access, are provided by NBN Co, which was established by the Australian Government in 2009 as a Government Business Enterprise to design, build and operate Australia’s wholesale broadband access network. NBN Co’s key objective is:

… to ensure all Australians have access to fast broadband as soon as possible, at affordable prices, and at least cost.

Access to broadband is delivered by a combination of fixed line (with mixed access technologies), fixed wireless (a wireless connection to a fixed point) and the NBN Sky Muster satellites launched in October 2015 and February 2016. Fixed wireless and satellite are more prevalent in regional, rural and remote Australia, including remote islands such as Norfolk Island, Christmas Island, Lord Howe Island and the Cocos (Keeling) Islands.

The Regional Backbone Blackspots Program provided an optic fibre fixed line network that connected cities, towns and rural areas. This program was completed in 2012 and forms one of the building blocks of the NBN.

Access to mobile services

The Department of Communications and the Arts states:

Mobile phone services currently reach 99 per cent of the Australian population. Satellite mobile phone services cover 100 per cent of the Australian landmass and population.

The Mobile Black Spot Program (MSBP) is an Australian Government program designed to provide, where possible, non-satellite mobile services to areas without coverage. States and territories and private telecommunications companies also contribute to the program. As at 20 March 2019, 683 base stations were activated under the Australian Government’s MBSP.

Affordability

Through the Carrier Licence Condition (Telstra Corporation Limited) Declaration 1997,Telstra is required to offer a low income package.

In addition, the Department of Human Services can provide a telephone allowance for eligible people. However, having an existing phone or internet service is a prerequisite for the allowance.

Digital ability

The Australian Government has released several policy measures to support digital literacy and ability for in urban and regional areas and older people through the Broadband for Seniors program (which ended in September 2017) and the Be Connected program. The Be Connected program provides online learning resources as well as a network of community partners, many of which are in regional areas, to all Australians.

The eSafety Commissioner is responsible for promoting online safety for all Australians and has an array of resources for people to use.

The Department of the Prime Minister and Cabinet provides for various levels of support for Aboriginal and Torres Strait Islander people, including digital ability programs.

The states and territories, the private sector, and not-for-profit organisations provide support and access to digital ability training. Not all of these services are available in regional and remote areas.

Future challenges

Future demand for greater speed and more data will put pressure on the existing telecommunications infrastructure, particularly Sky Muster and fixed wireless broadband services.

Although data is becoming cheaper, the costs of devices, connection and contracts could put the most vulnerable in jeopardy of becoming digitally disconnected, particularly in remote communities.

Intuitive user technologies like those anticipated in the Digital Transformation Strategy will work in favour of digital ability, but this presupposes reasonable, reliable and affordable access in the first place.

To provide the necessary funding, in June 2017 the Government released its Regional Broadband Scheme (RBS), to be given legislative effect by the Telecommunications (Regional Broadband Scheme) Charge Bill 2017, which was considered by the Senate Standing Committees on Environment and Communications. The Bill intended to establish:

… an ongoing funding arrangement for fixed wireless and satellite infrastructure (the Regional Broadband Scheme) by imposing a monthly charge on carriers, including NBN Co Ltd, in relation to each premises connected to their network that has an active fixed-line superfast broadband service during the month.

The Bill lapsed at the end of the end of 45th Parliament. The April 2019 Budget proposed a reduced cap on the RBS charge (Budget Measures, Budget Paper No. 2: 2019-20, Part 1: Revenue Measures, p. 6.)