Internet in Australia

Early days

Australia was recognised as part of the Internet when the .au domain (ccTLD) was delegated to Robert Elz of the Australian Computing Science Network (ACSNet) in March 1986. From then on various universities connected intermittently (mostly via dialup UUCP protocol links) to allow for the sending and receiving of email links and for use by emerging newsgroup facilities. Prior to IP-based connection to the greater Internet, there existed an IP-based network, linking academic institutions within Australia, known as ACSNet, using the .oz domain and connected to international networks using other technologies. When Australia was fully integrated into the Internet, this domain was moved under .au to become .oz.au and still exists today.

The first permanent circuit connecting AARNet to ARPANet using TCP/IP over X.25 was established in May 1989. It linked the University of Melbourne with the University of Hawaii via a 2400-bit/s (bits per second) satellite connection. It was later upgraded to 56 kbit/s (kilobits per second), and then 256 kbit/s, at a time during which the US end-point was moved to San Jose at a NASA facility.

In 1992 there were two commercial ISPs competing with one another. DIALix provided services to Perth, and the other was Pegasus Networks in Byron Bay. By June 1995 this number had increased to excess of 100 [Internet Australasia Magazine], attributing some fifth of all AARNet traffic. At this time, it was decided by the Vice Chancellors' Committee that Telstra would be better positioned to lead the commercial push of the Internet into Australia, so all commercial customers were sold.

A further early provider was the not-for-profit Australian Public Access Network Association (APANA). Founded in 1992 by Mark Gregson, APANA ran many small, widely dispersed gratis hosts for bulletin board systems and newsgroups, but developed into a provider of low-cost, non-commercial access to the Internet for its members.

First broadband

In the late 1990s, Telstra and Optus rolled-out separate cable Internet services, focusing on the east coast. In 2000, the first consumer ADSL services were made available via Telstra Bigpond, at speeds of 256/64 kbit/s (downstream/upstream), 512/128 kbit/s, and 1500/256 kbit/s. Telstra chose to artificially limit all ADSL speeds to a maximum of 1500/256 kbit/s. As ADSL required access to the telephone exchange and the copper line — which only Telstra had — this allowed Telstra to be dominant due to the expense of roll-out for other companies and Telstra's established customer base. Other ISPs followed suit soon after; offering a Telstra Wholesale–based service.

Competition, faster broadband

Gradually, larger ISPs began taking over more of the delivery infrastructure themselves by taking advantage of regulated access to the unconditioned local loop. As well as significantly reducing costs, it gave the service providers complete control of their own service networks, other than the copper pair (phone line from the exchange to the customer). The first competition to Telstra's DSLAMs was provided by then Optus subsidiary XYZed, launching business-grade xDSL services from 50 exchanges in September 2000. Competition in the residential infrastructure market began in 2003, when Adelaide-based ISP Internode installed a DSLAM in the town of Meningie, South Australia. Several other service providers have since begun deploying their own DSLAMs. The presence of non-Telstra DSLAMs allowed the service providers to control the speed of connection, and most offered "uncapped" speeds, allowing the customers to connect at whatever speed their copper pair would allow, up to 8 Mbit/s. Ratification of ADSL2 and ADSL2+ increased the maximum to 12 Mbit/s, then 24 Mbit/s.

In 2005, Telstra announced it would invest A$210 million in upgrading all of its ADSL exchanges to support ADSL2+ by mid-2006, though they did not say whether they would continue to restrict access speeds. However, in 2006, they announced new intentions to substantially alter their copper phone network and set up a "Fibre to the Node (FTTN)" network. This was later scrapped, with Telstra citing regulations forcing it to provide cheap wholesale access to its competitors as the reason not to invest in upgrading their network.

In late 2006, Telstra uncapped its retail and wholesale ADSL offerings to the maximum attainable speed of ADSL to 8 Mbit/s, however with a limited 384 kbit/s upstream speed. This has allowed many Australians access to higher speed broadband, while the comparatively lower wholesale rates discouraged competitive infrastructure investment in most cases.

Wireless broadband in Australia is widespread, with many point-to-point fixed wireless broadband providers serving broadband-poor regional and rural areas, predominantly with Motorola Canopy and WiMAX technologies. Telstra's 2006 introduction of the "Next G" HSPA network (which reportedly covers 99% of the Australian population as of September 2008) with speeds advertised of being up to 14 Mbit/s stimulated investment in wireless broadband by competitors Optus, Vodafone and Hutchison Telecommunications, who are presently expanding their HSPA networks to cover 96–98% of the Australian population.

Delivering broadband to rural areas

Delivering competitive telecommunications services to regional and rural areas is a major issue, with Telstra often providing the only telecommunications backhaul transmission infrastructure. The large distance and small population means that providers interested in serving these areas often must invest large amounts of capital with low returns. Agile Communications is a pioneer of deploying cost-effective, competitive backhaul networks including their own microwave network in rural South Australia. Internode has been active in increasing access in order to be accessible to more people, spending $3.5 million. This expansion will include both "wireless and fixed line-broadband (ADSL 2+)".

In June 2006, the Australian Department of Communications, Information Technology and the Arts (DCITA) under the then coalition government called for expressions of interest for discussion of how to invest up to $878 million in funding under Broadband Connect program to provide greater access to broadband services in rural and regional areas at prices comparable to services available in metropolitan areas, $500 million of which was envisaged as being available to infrastructure projects. On 21 September 2006, the government announced they would invest up to $600 million in broadband infrastructure projects in rural, regional and remote Australia under this program. Applications for funding were open until 30 November. On 18 June 2007, in the lead up to a federal election, OPEL Networks was announced as the sole successful bidder, receiving the entire $600 million in funding under the program, as well as an additional allocation of $358 million. This was to be combined with $917 million to be invested by the OPEL Networks joint venture. The awarding of additional funding was met with some debate. The funding agreement was signed on 9 September 2007, which was dependent upon further planning by OPEL and confirmation that it would reach the agreed levels of coverage. The then federal opposition communications spokesman stated that they would honour the agreement, a stance maintained after winning government two months later, despite their own competing National Broadband Network proposal.

We have said all along, will honour existing contracts. There are a number of performance hurdles the OPEL contracts have to meet. That's all part of the contract.

On 2 April 2008, it was announced that the funding agreement for Opel Networks had been cancelled. The minister cited OPEL's failure to meet the terms of the contract, a claim refuted by the OPEL joint venture partners, who nevertheless stated that the project would not proceed.

Innovation in broadband delivery

In November 2007 the first Naked DSL product was announced by iiNet. Shortly after this other internet providers also started to provide DSL products without telephony service over copper, reducing line rental fees.

Broadband Advisory Group 2003

In a report released on 22 January 2003 the Howard government's Broadband Advisory Group (BAG) recommended the Federal Government work with other governments and industry stakeholders to form a 'national broadband network'. A subsequent Senate committee recommend the Federal Government replace the 'increasingly obsolete' copper network with a new network based on fibre to the node (FTTN) or alternative technologies.

Telstra Copper Upgrade proposal 2005

On 15 November 2005 Telstra, the owner of the national copper network, announced a plan to upgrade its ageing networks, including a rollout of a fibre to the node (FTTN) network. At the time, the Federal Government was the majority shareholder of Telstra, but the plan did not involve any additional government investment. The rollout was later put on hold after the Howard Government refused to exempt the new network from laws requiring third party access, instead saying Telstra could achieve the exemption by applying to the competition regulator, the Australian Competition and Consumer Commission (ACCC). Telstra dropped plans for the new network on 7 August 2006, after reaching an impasse in negotiations with the ACCC. Former ACCC chairman, Graeme Samuel later said the proposal was 'an illusion on cost and on the capacity to truly deliver high-speed broadband to end users'.

Broadband Connect Policy & OPEL Networks 2006/07

In June 2006 the Broadband Connect policy was announced by the Howard Government with an aim of providing greater access to broadband services in rural and regional areas.

OPEL Networks—a 50–50 joint venture between Optus and Elders—was announced on 18 June 2007 as the sole successful bidder in tender. However, on 2 April 2008 Communications Minister Stephen Conroy of the then recently elected Rudd Government, terminated the agreement because OPEL had 'failed to meet the terms of [the] contract'.

G9 Consortium 2007

Nine telecommunications companies—AAPT, Internode, iiNet, Macquarie Telecom, Optus, PowerTel, Primus, Soul and TransACT, formerly known as G9—proposed its own FTTN network on 20 April 2007, however, it was rejected by the ACCC on 17 December 2007 because of future unknown conditions for access.

Internet statistics

In March 2007, there were approximately 4.33 million broadband subscribers in Australia and 2.09 million narrowband subscribers. Between December 2007 and June 2008 there was an increase in the number of wireless internet subscribers from 433,000 to 809,000.

Customers on connection speeds of 1.5 Mbit/s have increased from 2.47 million (37% of total) in December 2007 to 3.10 million (43% of total) in June 2008. In December 2008 there were 7.996 million Internet subscribers representing a year on year increase of 13%. There was a decrease of 30% in the number of dial internet subscribers, and an increase of 28% in the number of non-dial subscribers. Currently, Australia has a theoretical 5637734.4Mbit/s of transpacific bandwidth, however lit capacity is much less.

(a): ISDN, cable, satellite and other non-dial up technology

(a) Data not collected on broadband before 2004–05 (b)

Internet access and at use at home by age 06-07

Pricing

In October 2008, the OECD compared countries where more than 50% of offers have bit/data caps. Australia is one of four countries of the 13 with caps where 100% of plan options had download caps, and it ranked fourth in average download limit size (27 GB). It ranked number one by a wide margin in the average price per additional MB after reaching the cap, at 0.103 USD. The second highest was Ireland at 0.018 USD per MB. In a sample comparison of 27 countries, all in Europe and North America along with Japan, Korea, Australia, and New Zealand, between 2005 and 2008 inclusive, the fastest DSL service was Japan and Korea at 102,400 kbit/s. Australia was ranked fourth from the bottom at 1,536 kbit/s, above Greece, Spain and Mexico who were each 1,024 kbit/s. Cable internet in Australia ranked third in greatest increase in speed, from 2,880 kbit/s in 2005 to 20,000 kbit/s in 2008, compared to the other 27 countries. While all but two countries lowered their prices by an estimated average of 10% per year, Australia raised its prices by an average of 14% per year.

Economic

In 2010, the Internet was reported as contributing A$50 billion (US$53 billion) or 3.6 percent of Australia's gross domestic product. The contribution is second after the leading mining sector and is half of the value of the mining sector. The Internet industry directly employed 190,000 Australians.

Residential internet access

Residential broadband Internet access is available in Australia using ADSL, cable, fibre, satellite and wireless technologies. Since July 2008 almost two thirds of Australian households have had internet access, with broadband connections outnumbering dial-up two to one. According to the recent ABS statistics the non-dial-up services outnumber dial up services 3.6 to 1.

The most common form of residential broadband is ADSL, which uses existing copper telephone lines. In Australia, the major telephone company, Telstra, owns the majority of landline infrastructure, with Optus (a subsidiary of Singapore Telecommunications) owning the rest, making them well-placed to provide the DSLAM technology which facilitates ADSL. Smaller ISPs often resell these wholesaled services, but recently there has been substantial infrastructure investment in DSLAM technology by other providers using local loop unbundling.

Hybrid fibre-coaxial cable networks running at up to 30 Mbit/s exist in all of the major metropolitan regions. Telstra, in November 2009, finished upgrading the HFC Cable network in Melbourne, which will provide speeds of up to 100 Mbit/s, providing the city with the nation's fastest internet. The system was rolled out in December 2009.

Various providers offer wireless networks dedicated to broadband, both in metropolitan and rural areas. Wireless internet is better suited to the more rural areas of Australia due to the larger distances and lower population density which make traditional lines costly. New business models have been used in order to encourage the take up of wireless internet. Prepaid, a concept that has been seen in mobile phones, is being transferred to wireless internet.

The major mobile phone networks provide 3G data connectivity using HSDPA over 3GSM. These are also considered a solution for providing broadband in regional areas

Most Australian ISP plans traffic shape residential customers after a monthly download quota has been exceeded. Shaped connection speeds are typically claimed to be 64-256 kbit/s (kilo-bits) per second, depending on the plan, although 64 kbit/s is barely-usable and an industry standard slow-usable minimum would be reasonable.

Other ISP plans apply "per gigabyte" excess charges to downloads beyond the monthly download quota. However, since the duopoly on internet access into Australia was broken in 2009 with the coming into service of the PPC-1 cable to Guam, there are many ISPs providing inexpensive unlimited internet plans on par with North American levels of internet access, at least possibly in the major cities.

Internet in rural areas

Internet in Australia has great differences between urban and rural areas. With the March 2007 announcement of the Broadband Guarantee program, which will replace the Broadband Connect program, many long term projects to bring Internet to Rural Areas are under review. A week after the announcement, Internode suspended its programs to bring Broadband to the Country and many others providers are having to follow suit as the cancellation of the Connect program has removed the financial incentive for ISPs to "supply higher bandwidth services in regional, rural and remote areas of Australia at prices comparable".

In March 2007, the ALP announced a new policy, accepting the privatization of Telstra in order to fund a world class national broadband network.

It should be noted however that due to Telstra's extensive use of pair-gain technology for connecting home landlines from 1994 to 2000, some homes have been excluded from ADSL and are limited to a dialup speed of 28.8 kbit/s.

International connectivity

Due to Australia's large size, sparse population, and relative remoteness to other countries, a significant amount of infrastructure is required for Internet communications. The vast majority of Australia's international Internet transit capacity is sourced from undersea fibre-optic communications cables to Asia and the US. Until 2009 data costs across the Pacific were constrained by a Telstra–Telecom duopoly on the available cables. The provision of PPC-1 cable in 2009 broke this duopoly and caused the cost of data transmission to fall substantially. Since then Australia has enjoyed North American standards of internet access, with many ISPs providing plans with unlimited high-speed access.

Network neutrality

In 2006 the top three ISPs stated that they did not discriminate between peer-to-peer internet activity and normal internet activity. Peer-to-peer activity is counted towards a customer's limit and if the customer exceeds that limit then they will have their account shaped. However, Unwired and iBurst confirmed at the same time that they do shape peer-to-peer activity to "smooth the flow of data". In 2007 Optus changed their policy so that uploads as well as downloads would be counted towards the customers limit. This has been seen as a move to curb the amount of peer-to-peer activity, since other services which upload such as multiplayer computer games are not counted towards the limit if played through certain servers.

IPv6

With the Asia-Pacific Network Information Centre's Geoff Huston stating that IPv4 addresses will be exhausted prior to October 2010, IPv6 is becoming increasingly important in the future of Australian Internet connectivity. Despite several companies having applied for allocations of the new addresses, presently only a small number organisations have provided retail-IPv6 offerings to their end-customers; Apex Telecom and Internode both claim to being the first to offer IPv6 at a retail level. Wholesalers and Educational Networks have also been supplying IPv6 being PIPE Networks, Vocus and AARNet.

Internet filtering plans

On 31 December 2007, Stephen Conroy announced the federal government's intention to censor "inappropriate material" from the Internet. Under the proposed system any Australian who subscribes to an ISP would receive a "clean" version of the Internet. The Federal Government's stated aim is to protect children from accessing violent and pornographic websites. This plan was later abandoned and the Australian government continues to only block websites that violate online laws.

National Broadband Network

The National Broadband Network was initially a fibre to the home (FTTH) open-access network in planning and trial operation in Australia by the federal government. The national broadband network aimed to provide up to 1000 Mbit/s speeds and to connect to 93% of Australian households and businesses. This has since been revised under a Coalition government to a Mixed-Technology system relying largely on Australia's existing and largely depreciated Copper networks. This revision aims for 50 Mbit/s to 100 Mbit/s, with consumer reports ranging from 1 Mbit/s to 100 Mbit/s. The government will hold a majority share (51%) in the network company, with the remainder being held by private firms. The Australian government had previously called for proposals to build a Fibre to the Node (FTTN) broadband network providing download speeds up to 100 and upload speeds up to 40Megabits per second. The government also utlilises fixed wireless technology and satellite technology to provide fast broadband connection in rural area and very remote area. Fixed wireless provides speeds up to 50/20 Mbit/s. Satellite technology uses sky muster communication satellite which was launched in October 2015 to provide fast broadband in very remote area. It provides speeds up to 25/5 Mbit/s. The network will be the largest single infrastructure investment in Australia's history.