For those who don't know the story about the Australian internet industry, Telstra plays a pivotal and depressingly stupid role.
Telstra was a government monopoly in the past and owned + owns almost all the copper network in Australia. From 1997, Telstra was progressively privatized without separating the telecommunications business (phones) with the telecommunications infrastructure (cables). This was an idiotic idea.
There were some regulations that forced the infrastructure to be offered wholesale to competitors but they're still the gateway that the majority of the population get onto the internet. It's also problematic as Telstra are doing worse and worse at maintaining the copper network that is relied upon. If you are an ISP using their network, you need to go through their maintenance fees to improve the line quality for any of your customers. The cost of wholesaling through the Telstra network is also fairly high. Regardless, we've got reasonable competition at the ADSL/ADSL2+ level thanks to this.
Forward to the National Broadband Network (NBN), the government plan to connect the majority of Australian homes to fiber to the node (FTTP). Telstra submit the equivalent of a joke tender for the project -- 12 pages connecting only ~90% of the population when the tender requests 98% -- and then suffer their biggest one day stock fall in history when it's rejected.
Construction of the NBN rolls on without them, promising to replace the copper network with a fiber network that will be the new telecommunications infrastructure used by the majority of ISPs.
However... a new government came to power in Australia. One of their election falsehoods was that FTTP was too expensive and too slow and instead a ridiculous hodge podge (sorry: "hybrid") network of failing technologies would be preferred. Instead of building a complete FTTP network for $73 billion, they're instead going to spend $41 billion on a hybrid network that will need to be replaced only five years after completion according to the chairman of the NBN[1].
This hybrid network relies on the old copper network owned by Telstra. Telstra have previously stated that it is ready to die and will have billions of dollars of maintenance issues.
This is also only a very brief discussion of the ridiculousness.
tldr; Telstra played an important role in screwing up the previous generation of Australia's internet. Telstra is continuing to play an important role in screwing up the current generation.
$73 billion was the LNP's figure, by the way, which involved some extremely questionable assumptions (such as despite the actual FTTP cost per premises dropping over time as the rollout was progressing, exactly like it did in other rollouts around the world, the LNP's strategic review claims it would have doubled in the future for reasons which were redacted). I think even Fletcher admitted eventually that it would have been much more like the other sceneario, $56 billion, in reality. Still a bit more than Labor's $44.1bn estimates, but nowhere near the LNP's past ludicrous claims (they were saying up to $96bn).
Still would have been worth it at double the price to get rid of Telstra. I can't believe how much the politicians have ruined it.
Today in the paper[1] there was a feasibility study by an 'independent' analysis group that said that most homes would only need to use ~14MBit connections - two HDTV streams plus a couple of vidchats. As a result, the crappy alternate NBN was more than suitable.
How on earth can you take these people seriously when they can't recognise that data consumption trends have been rising continuously throughout the life of the internet. I mean HDTV is only 1080p, and we already have 4k monitors available to consumers today - which are more than 4 times the data. One single 4k video feed is already about double everything else they'd budgeted for in their "somewhat extreme" scenario. Zero forward thinking.
With the recent leaks about News Corp's finances [1] showing massive revenue loss due to internet news, and their known corruption of the political system, I wonder what ties exist between NewsCorp and Telstra?
NewsCorp and Telstra each own 50% of the appropriately named monopoly pay TV provider FOXTEL.
Now guess which companies' ex-CFO was appointed by this new government to be the new CFO of NBN Co. Here's a hint: it was one of the above two. Fox in hen house much?
If nothing else he's already ticked the #1 qualification for this new job - maximising profits for Rupert Murdoch.
What really blows my mind is that Australia is still highly regarded as a low-corruption country. Same goes for the UK, after they were caught fixing the Libor rates, essentially fucking over the whole planet.
You mean 70% of the daily national circulation of newspapers and the only general national newspaper?
Oooh, I know the answer to that! It's the bunch of people who just announced that Telstra just hit a 12-year high in their share price two weeks after announcing a $4.3 billion profit over here: http://www.theaustralian.com.au/business/latest/telstra-lift...
Disclaimer: I own Telstra shares through an ETF. Because at least this way I get some money back through dividends. And one may as well profit from their evil, sad as it is. It's not like this government is going to do anything to upset the Telstra/NewsCorp duopoly of hate and evil.
It doesn't. Bandwidth is sold by the megabit/sec, aggregated across all the customers on a particular virtual port (CVC) at a particular point of interconnect.
The CVC price needs to come down a bit, but it's a pretty standard way of pricing.
I think there are a few huge gaps. Russia, they got as many people as Japan. And another even larger hole is Africa, there's well over one billion people in Africa. Compared to ridiculous 22 million in Australia, that's a lot more. And in India, there's even more people than there is in Africa. Roughly US, Europe and Australia combined got same population as India or Africa which is in same ball park with China.
Agree there are other regions left out (Africa, India, Russia and China are the biggies). We don't operate in a scaled up way in any of those yet. That's changing and, as we have data for other regions, we'll look into revisiting this topic.
In Russia, 2 Mbit / 512 Kbit ADSL costs me about $8 per month; they keep suggesting I make a free switch to a 15 (or 30 or 60, have not checked the actual speeds yet) Mbit cable connection, but I am unsure if I do want to pay extra $3 :) Given the (free) D-Link 2300 running a 2500 firmware is really showing its age sometimes now (after 6 or 7 years of non-stop work), it may be indeed time to switch (not that I need anything more than 5 Mbit downlink, I think though).
This is a state provider, there are many private ones around, and their prices (usually for a 50-100 Mbit downlink via usual Ethernet cable) are $10-20 per month (comparable, that is), if I remember correctly.
The ADSL quality has always been good, btw (esp. given I wired the modem to telephone cables probably 30-40 years old :) ) -- decent pings, stable speed, was down only once or twice (in all the years).
I'm curious why you're satisfied with 2 Mbit / 512 Kbit. Do you never use streaming video / music? Don't you get frustrated waiting for large downloads?
2 Mbits means 900 Mbytes per hour -- enough for youtube streams in 480p (and more often than not, in 720p, without pauses to buffer), and ok if software distributions are downloaded (XUbuntu 14.04 was 900 Mb, iirc); music takes a fraction of the downstream capability...
Shortly, people used to 30 MBit downlinks might have forgotten how little most of our (modern-day) media requires -- often a megabit, or two per second :)
Just as a note, Cloudflare is not alone in struggling with this. I'm very surprised that the status quo has been maintained for so long. I suggest that Cloudflare should look under the process of transit becoming 'Declared', within the Australian Trade Practices Act. More here: http://en.wikipedia.org/wiki/Competition_and_Consumer_Act_20...
Australian here: can confirm Telstra as one of the most 'evil' companies I've dealt with and it's very clear to those of us in the Australian IT sector that they're holding us back.
If I remember my timeframes correctly, it wasn't until last year (2013) that Cloudfront finally got a node in Australia. As much as I like to complain about Comcast here in the States, my Aussie friends may have it worse.
No, the US exchanges don't provide any public data at all, this is also why they can't be listed in the Wikipedia Table for "Internet Exchange Nodes by throughput".
If you can find some data though, I'd encourage you to add the data to the table :)
At my place of work our 50:50 Unlimited (not Telstra) is in the low to mid four figures a month.
For a company with offices worldwide, we have by far the most expensive and have the worst performing connection to our regional datacenter.
The standard response from any supplier is to blame Telstra.
Recently I was porting some ISDN phone lines from an old provider to a new SIP provider. Not only did the two need to arrange and agree the porting with each other, but Telstra needed to work on both of their behalf to facilitate the port. One number took 3 months.
Note that CloudFlare never states that they use Telstra for transit, nor what the blended cost would be for transit with the other transit providers, so this is actually, somewhat misrepresenting Australia.
No mention of New Zealand. New Zealand is an amazing country, but goddamn, they have some pricey internet access. Wasn't Kim Dotcom planning to finance a new pipe to New Zealand at one point?
My experience is that Internet connections are price competitive with the US (and perhaps cheaper).
You can get 100/50 with 80GB of traffic for NZ$110/month, which is US$91.64. You can go full unlimited at USD$115. Amazingly, this is the same price as Comcast Extreme 105 which is only 105/20.
One thing to understand about the NZ market. Since carriers charge per byte, I was generally able to get full speed out of my links during prime time - barring TCP RTT throttling.
I'm confused. AAPT, Optus, PipeNetworks, etc all offer transit at significantly lower prices than this for anything I've been quoted with (circa $20-30/Mbps for 100Mbps+).
Is this just because they're offering blended traffic?
"We don't disclose exactly what we pay for transit, but I can give you a relative sense of regional differences. To start, let's assume as a benchmark in North America you'd pay a blended average across all the transit providers of $10/Mbps (megabit per second per month). In reality, we pay less than that, but it can serve as a benchmark, and keep the numbers round as we compare regions."
I'm not sure why Africa and the Middle East specifically aren't really mentioned in that article since the prices would be on par with Australia if not more, also due to having only 1 or 2 ISPs and no competition.
They're correct that at scale the dollar pricing listed is at least 10x too high in Australia. What they fail to acknowledge is that it's also 10x too high in every other region described. So the conclusion remains the same, Australia is 20x more expensive than Europe for no reason other than Telstra's market power.
They say they’re overstating our charges by a factor of ten.
Of coz Cloudflare already state those number are ratio only. I am not sure if Telstra were taking those into account.
Transit prices are generally not published, are negotiated individually, and often include a confidentiality clause. Plus, for a company like CloudFlare with a blended mix of transit providers, it won't be a single price.
(It's also likely CloudFlare buys more transit than most individual sites, so CF pricing wouldn't be meaningful for smaller circuits.)
Transit also varies by factors other than price. Cogent publishes prices, so for Cogent transit, it's pretty much a known quantity.
I also think it's a little crazy we talk about 1Mbps bandwidth now; I'd probably just start thinking of pricing as "$10k per Gbps" or something. (Usually big/cheap pipes include a commit level, too, and of course a max port size, so you're usually talking about 100+Mbps on a gig port minimum for "real" prices, or 1Gbps on a 10GE port.)
Seems logical to me--it's high enough that there's no worries of it being close and irritating a provider, but is round and easy to do relative pricing with. $1 would have been easier, but that's probably getting too close for comfort.
Can you explain what you mean? Why is $10/Mbps inaccurate? Aren't both $1 and 1 Mbps known fixed quantities we can use to calculate other figures (e.g. $100/Mbps, etc).
L3 (on the more expensive side) is probably around $3/Mbps for not-huge commits. Junky providers, like HE, are probably under $1. You should be able to buy no-commit "blend" for around $5 without trying too hard and go from there. (The main issue is making sure they don't prefer something like HE, like e.g. IPTP does.) But some datacenters offer ludicrous prices like $15 or $25, and apparently get away with it.
It really depends on your scale. When we first launched CloudFlare 4 years ago we were paying around $20/Mbps as a blended average in North America, Europe, and Japan. We pay much, much less now both because we've grown a bit and because the price of transit has continued to trend down.
From the article: "In North America, while there are Internet exchanges, they are typically run by for-profit companies." ... "In North America the combination of relatively cheap transit, and relatively expensive exchanges lowers the value of joining an exchange. With less networks joining exchanges, there are fewer opportunities for networks to easily peer."
Let me get this straight: North America has several for-profit companies that operate continental-wide networks, because building them is cheap, but they peer with each other less often than in Europe. The situation isn't ideal, but it makes the internet "backbone" market competitive, so it works out.
Side note: the situation is very different when talking about last mile ISPs in North America.
I always find it interesting that the business network in the US is often ignored. It's quite stellar on a combination of quality and price. I think it's an inconvenient data point for people that only like to bash the US telecommunications situation.
People tend to complain about problems and ignore things that are fine.
While a desire to avoid pointing out any positive of a situation that drives them crazy frequently may be part of the reason it isn't mentioned I think it pales in comparison to just forgetting about whatever isn't a problem.
Just spent a few weeks there and I can tell you home broadband is very fast compared to back home in the US - and apparently my relatives in the EU pay 1/4 as much as me when you add in TV and landline.
>If Australians wonder why Internet and many other services are more expensive in their country than anywhere else in the world they need only look to Telstra (Note: ~50% of all internet is from Telstra in Australia).
>What's interesting is that Telstra maintains their high pricing even if only delivering traffic inside the country.
>Given that Australia is one large land mass with relatively concentrated population centers, it's difficult to justify the pricing based on anything other than Telstra's market power.
>In regions like North America where there is increasing consolidation of networks, Australia's experience with Telstra provides a cautionary tale.
This seems to be a common failure mode in Australia. Grocery prices follow the same pattern—food is extraordinarily expensive, which you assume might have to do with the country's remoteness until you notice that local foods are just as overpriced. Mangoes grow by the side of the road in Queensland, but sell for $3.50 at the supermarket.
The root problem is duopoly (in the case of grocery stores) or monopoly (Telstra).
Australia is shockingly expensive the first time you visit there. Normal economics just don't seem to be at play.
It took me a long time to put my thumb on what Australia is like and it wasn't until I watched the show "Fringe" and saw the alternate universe (with the Airships and the Twin Towers) that it finally struck me, it's like an alternate universe America. Everything is just like the U.S., except for some weird little details. Big cars, lots of open land, cowboy analogs (drovers), purpose built capital designed by a foreigner, densely packed East Coast, East Coast vs. West Coast rivalry. And then suddenly it's not: driving on the left, everything is overpriced, egg yolks are a different color, etc.
I remember seeing real estate listing for some really remote housing in some dying gold town somewhere. Like 2 bedroom bungalows with no property. And they're priced at what you'd expect to find in a nearby suburb of Sydney (except the housing in the suburbs around Sydney is ludicrously expensive). While anywhere else in the world people would basically be paying you to take the title so they could get the hell out of there.
The local markets in Australia are just weird.
note I live in one of the most expensive housing markets in the U.S. so I'm used to seeing high prices. But even single bedroom apartments in Sydney suburbs rent out at prices you can get entire houses for in similar geographic regions around my area. You'd think the exact opposite would be true. In almost any other part of the world with plentiful land and low population, you end up with cheap housing, while in Australia that doesn't seem to be true at all.
Australia is generally ridiculously expensive, that is true, but there is usually a reason (not necessarily a good one) why "local markets in Australia are just weird."
> I remember seeing real estate listing for some really remote housing in some dying gold town somewhere.
Without further details, I can't say whether your assessment of "dying" is correct or not, but it is true that towns that have mining operations experience explosive growth (and contractions) in housing prices. Local governments in general don't want to allow a lot more house building, because in 5, 10 or 20 years time when the mine closes down, having all those empty houses causes a ghost town effect where the town really will die (the towns almost always existed before the mines, and they want them to exist after the mine leaves too). That means people pay north of $1 million dollars for a fibro shack. Mining companies will hire the local showgrounds long term, so that they can build a tent city for their workers (who use the showground toilet and shower facilities etc). Local house prices will fluctuate by hundreds of thousands of dollars in days, based upon financial news from the mining companies about whether they are liking to build/expand/close the local mining operation.
Yes, it's weird.
As for Sydney specifically, it is actually very space constrained. With the ocean on one side, and the Blue Mountains on the other side, there actually isn't a lot of room for expansion.
You are correct that in general there is a lot of undeveloped coast line though (inland is basically inhospitable). It's just not where the jobs are.
> Without further details, I can't say whether your assessment of "dying" is correct or not, but it is true that towns that have mining operations experience explosive growth (and contractions) in housing prices.
I honestly don't know. I was with a couple of locals and remember seeing the advertisement and remarking at how expensive the housing was. This was 7+ years ago but I remember they said something about it being a dead mining town turned into a prospector town. Folks looking to hit it big finding an unknown vein somewhere.
I've worked with more Aussies and we've had lots of discussions about the particularly weird housing market there, with of course lots of segues into the weird Bay Area housing market by way of comparison.
As for Sydney specifically, it is actually very space constrained. With the ocean on one side, and the Blue Mountains on the other side, there actually isn't a lot of room for expansion.
Melbourne has vast swathes of open land in all directions, and housing prices are nearly the same.
I asked the question to a friend, and he replied that I just don't get it: the people who already have houses aren't interested in reducing the value of them. Almost all federal politicians have multiple properties. Why would they legislate to do that? So we have negative gearing that will never get solved, lots of foreign purchasing driving up prices, and no-one willing to pull the pin out of the electoral grenade and start dealing with our housing bubble.
While Melbourne doesn't have any shortage of land to build out into it is getting very far away from the inner city.
As long as you are happy to drive everywhere and can find a suburban job or are prepared to make long commutes there is plenty of relatively cheap housing to be had.
I remember seeing real estate listing for some really remote housing in some dying gold town somewhere. Like 2 bedroom bungalows with no property. And they're priced at what you'd expect to find in a nearby suburb of Sydney (except the housing in the suburbs around Sydney is ludicrously expensive). While anywhere else in the world people would basically be paying you to take the title so they could get the hell out of there.
That's unlikely (the dying gold town bit). I suspect what you saw was a house in an iron ore town. There's never enough housing in those towns, and the miners are very well paid.
When the Australian dollar was down on the US, ~50-60c, the prices didn't seem so out-of-whack. Now that it has risen to 90-100c, it seems crazy. The prices have stayed around the same, rather than dropped as you might expect. The exception is real estate, which grew at 30-40% some years in the noughties, an industry so distorted that if it doesn't grow by 10%/year now, analysts run around claiming the end of the world.
Australia is more expense then the USA when it comes to everything. Rent, grocery, internet, etc. Australian consumers also have on average less buying power then American citizens. [1]
The medium household income for both countries is nearly identical. $30,932 (USA) vs $30,077 (AUS) ~2.76% [2]
So income is ~3% higher in America, but rent is ~46% more expensive in Australia (Groceries are 32.5%). I would say its based on factors other then average income.
I looked at the wiki entry but something isn't right about that. I don't understand where they're getting the $30k figure.
The median household income in the US is over $53,000 - not $30,932. I think it's much higher in Australia as well (for example they list nominal median at $47k on the wiki).
The Wikipedia table is apparently median household equivalent adult income. This is the somewhat obscure way the OECD accounts for varying household sizes amongst compared nations:
Australian figures and American figures aren't comparable. Australia is one of the most urbanised populations in the world; in the USA cost-of-living figures are dragged down because an enormous bulk of the population is scattered across cheap locations.
Others have noted that on average, the answer is no, but without calculating the stats, I would expect the lower wage earners to be better off in Australia (especially when costs for healthcare and other services are near zero).
A few years ago, Australians were the wealthiest people in the World (they slipped to number 2 last year). This is private assets, nothing to do with income, government income and expenditure etc. What does this show? Not much really, just pointing out that statistics is hard, and if you don't like what something shows, then change the metric until you find the news you want. In other words, take everything that people are saying (including me) with a grain of salt.
This is a massive takeaway -- but even I accept it's more nuanced than that.
Australia has the massive disadvantages of: 1. being miles away from everything, 2. having small population with high Internet-demands and 3. having very, very little "local" content.
This means a large majority of Australia's Internet needs must be serviced by extremely expensive not-at-scale trans-Pacific services.
Places like Germany, Japan, Korea don't have these same issues. They have tons of "local" content and when they need to hop to the USA it's using infrastructure that is massively at scale (i.e. serving a continent like Europe or Asia, as opposed to Australia).
Not to say the Australian circumstances aren't an example of a massive regulatory cluster, but it's not quite as simple as it sounds.
> Australia has the massive disadvantages of: 1. being miles away from everything ...
It's true, I fully accept your point, but the wording made me ask myself where "everything" is located. 20 years ago I might have assumed it was unambiguously located somewhere in the U.S., but I think as time passes and the Internet grows and changes shape, Europe and other countries have begun to play a more important part.
This is an example where a traffic-based network diagram could be used to locate the Internet's "center of mass", so to speak, a region or location that could be described as the middle of everything.
"Everything" in the English-speaking world is still definitely the US. There are roughly 400 million English speakers in the US/Canada/Caribbean, 23 million in Australia and 65 million in the UK. The USA is still definitely the center of the English-speaking world; both from a population and cultural influence standpoint.
I think it's still majority-USA, but the proportion of European internet users who mainly "do internet" in English is growing. It's no longer just the UK and Ireland, but these days probably a majority of the Nordic countries' users, a large percentage of those in the Netherlands, a several-million-large minority of Germans, a bunch of younger Romanians, etc. On Europe-centric English-language forums, Brits+Irish+expats no longer constitute >90% of the users, but as a rough guess more like half, though it varies greatly by community.
I would say the primary reason they "do Internet" in English is because of the wealth of US-produced content. Like it or not, the US (specifically LA / NY) is the center of the world for mass-market media culture.
I think that was the initial impetus, and is what made English the lingua franca. But now that it is, it has a life of its own where people are using it even for communication entirely between Europeans. If you want to have a site dedicated to Northern European politics, where Dutch, Swedes, Germans, Estonians, and Poles all post, what language is it going to be in? English, of course, even if not a single American or British person ever reads or posts. Why are all the Danish government websites translated to English? Not so Americans can read them, but so people from other European countries can read them, along with recent immigrants (who are mainly Germans, Turks, and Arabs). The EU institutions are moving towards English as the main working language for the same reason, because it's the easiest way for a German and a Swede (say) to communicate; with the French being the main holdouts.
In the Nordic region in particular the huge dissimilarity between Scandinavian languages and Finnish is driving it imo. If the cultural bloc were only Norway/Denmark/Sweden, I think it would settle on a kind of "Scandinavian" (their written forms are mutually intelligible). But that would exclude Finns from the Nordic family, so the working language has to be English, whether it's in formal institutions like the Nordic Council, or informal ones like http://www.reddit.com/r/Nordiccountries. I think this is only going to accelerate, and Americans will gradually become a smaller proportion of English-language online posters than they used to be, as the younger generation of Europeans who are comfortable in English become more present in anglophone contexts. But it'll be a while before there's a real critical mass.
The problem boils down to language. Interesting content in Korea is in Korean and would be of no interest to the majority English speaking Australian population.
Hence, Australia relies on content from the English speaking world which is dominated on the Internet by the U.S., this translates to trans-pacific cabling to the U.S. West Cost which is pretty pricey.
Australia didn't start with a free market in telecommunications and the aftermath of a botched privatisation means that we're left with a distinctly dysfunctional market as a consequence.
The USA might have had a free market at one time, but we haven't since 1934, so memories are hazy. The uptick in competition post-1996, which has steadily rolled back for some time now, was mostly a gimmick to funnel investment into the Daughters Bell. TFA is spot-on that concentration is bad for consumers, and our slow roll-back from even the paltry market diversity we once had for data connection bodes ill for us.
I heartily apologize to all who were disconcerted by my caricature of the useful idiots who "believe in a free market in telecommunications", as the most recent email I received from my corrupt Senator put it.
Telstra was a government monopoly in the past and owned + owns almost all the copper network in Australia. From 1997, Telstra was progressively privatized without separating the telecommunications business (phones) with the telecommunications infrastructure (cables). This was an idiotic idea.
There were some regulations that forced the infrastructure to be offered wholesale to competitors but they're still the gateway that the majority of the population get onto the internet. It's also problematic as Telstra are doing worse and worse at maintaining the copper network that is relied upon. If you are an ISP using their network, you need to go through their maintenance fees to improve the line quality for any of your customers. The cost of wholesaling through the Telstra network is also fairly high. Regardless, we've got reasonable competition at the ADSL/ADSL2+ level thanks to this.
Forward to the National Broadband Network (NBN), the government plan to connect the majority of Australian homes to fiber to the node (FTTP). Telstra submit the equivalent of a joke tender for the project -- 12 pages connecting only ~90% of the population when the tender requests 98% -- and then suffer their biggest one day stock fall in history when it's rejected.
Construction of the NBN rolls on without them, promising to replace the copper network with a fiber network that will be the new telecommunications infrastructure used by the majority of ISPs.
However... a new government came to power in Australia. One of their election falsehoods was that FTTP was too expensive and too slow and instead a ridiculous hodge podge (sorry: "hybrid") network of failing technologies would be preferred. Instead of building a complete FTTP network for $73 billion, they're instead going to spend $41 billion on a hybrid network that will need to be replaced only five years after completion according to the chairman of the NBN[1].
This hybrid network relies on the old copper network owned by Telstra. Telstra have previously stated that it is ready to die and will have billions of dollars of maintenance issues.
This is also only a very brief discussion of the ridiculousness.
tldr; Telstra played an important role in screwing up the previous generation of Australia's internet. Telstra is continuing to play an important role in screwing up the current generation.
[1]: http://www.zdnet.com/its-time-for-turnbull-to-swallow-his-nb...