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The TL;DR of the article. >If Australians wonder why Internet and many other services are more expensive in their country than anywhere else in the world they

The TL;DR of the article. >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.

idlewords 12y ago
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).
- pkaye 12y ago
  Is it expensive relative to your income?
  - valarauca1 12y ago
    No. 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. [1] Numbeo.com [2] https://en.wikipedia.org/wiki/Median_household_income https://en.wikipedia.org/wiki/Median_household_income
    - tnorthcutt 12y ago
      Australian consumers also have on average less buying power then American citizens. So then it is expensive relative to your income, is it not?
    - adventured 12y ago
      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). http://www.census.gov/prod/2013pubs/acsbr12-02.pdf http://www.census.gov/prod/2013pubs/acsbr12-02.pdf http://quickfacts.census.gov/qfd/states/00000.html http://quickfacts.census.gov/qfd/states/00000.html Even the chart graphic at the bottom right of that wikipedia entry shows $50k+ as the proper median income level: https://upload.wikimedia.org/wikipedia/commons/d/d0/US_real_median_household_income_1967_-_2011.PNG https://upload.wikimedia.org/wikipedia/commons/d/d0/US_real_...
      - lern_too_spel 12y ago
        It's equivalised. https://en.m.wikipedia.org/wiki/Equivalisation https://en.m.wikipedia.org/wiki/Equivalisation
      - twoodfin 12y ago
        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: https://en.wikipedia.org/wiki/Equivalisation https://en.wikipedia.org/wiki/Equivalisation You're right that the U.S. median household income is north of $50K.
    - jacques_chester 12y ago
      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.
  - bane 12y ago
    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.
    - stimut 12y ago
      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.
  - stimut 12y ago
    Depends on your profession. 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.
jwilliams 12y ago
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.
- lutusp 12y ago
  > 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.
  - bane 12y ago
    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.
  - exelius 12y ago
    "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.

idlewords 12y ago

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).

pkaye 12y ago
Is it expensive relative to your income?
- valarauca1 12y ago
  No. 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. [1] Numbeo.com [2] https://en.wikipedia.org/wiki/Median_household_income https://en.wikipedia.org/wiki/Median_household_income
  - tnorthcutt 12y ago
    Australian consumers also have on average less buying power then American citizens. So then it is expensive relative to your income, is it not?
  - adventured 12y ago
    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). http://www.census.gov/prod/2013pubs/acsbr12-02.pdf http://www.census.gov/prod/2013pubs/acsbr12-02.pdf http://quickfacts.census.gov/qfd/states/00000.html http://quickfacts.census.gov/qfd/states/00000.html Even the chart graphic at the bottom right of that wikipedia entry shows $50k+ as the proper median income level: https://upload.wikimedia.org/wikipedia/commons/d/d0/US_real_median_household_income_1967_-_2011.PNG https://upload.wikimedia.org/wikipedia/commons/d/d0/US_real_...
    - lern_too_spel 12y ago
      It's equivalised. https://en.m.wikipedia.org/wiki/Equivalisation https://en.m.wikipedia.org/wiki/Equivalisation
    - twoodfin 12y ago
      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: https://en.wikipedia.org/wiki/Equivalisation https://en.wikipedia.org/wiki/Equivalisation You're right that the U.S. median household income is north of $50K.
  - jacques_chester 12y ago
    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.
- bane 12y ago
  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.
  - stimut 12y ago
    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.
- stimut 12y ago
  Depends on your profession. 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.

jwilliams 12y ago

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.

lutusp 12y ago
> 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.
- bane 12y ago
  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.
- exelius 12y ago
  "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.