The Week: On Subsidies and Grades

The Department of Communications has announced that the long-running Satellite Phone Subsidy Scheme is soon to be wound up. All travellers to remote parts of Australia who intend on obtaining a satellite phone are advised to apply by the end of March.

The Subsidy Scheme will close for good on June 30, 2014, but it won't be possible to apply for a subsidy after March 31. Successful applicants will then have up to two months to purchase a new device.

The Satellite Phone Subsidy Scheme was introduced in 2002 to help people living, travelling or working outside of terrestrial mobile phone coverage to purchase satellite mobile phones at heavily reduced cost. So far it has provided assistance to over 26,000 individuals.

New technological developments have severely limited the value of the scheme, however. When the Scheme was introduced satellite handsets were prohibitively expensive. Even half a decade ago, a subsidised handset would cost about $1,100. Now handsets can be found without subsidies for about $800 or less.

There are also new devices that allow users to convert their existing smartphone into a satellite capable device. Territorial mobile coverage is also considerably better than it was when the scheme was introduced, further lessening the need for the subsidies.

To apply for a subsidy under the Satellite Phone Subsidy Scheme, please head to the Department of Communications website. (Once your application has been approved, don't forget that Dog and Bone supplies high quality satellite handsets at very competitive prices!)

Whose Broadband?

Stoush of the Week appeared in Business Spectator, as columnist and RMIT academic Mark Gregory took the federal government to task over their flawed MyBroadband site. The Minister responded in typically heated fashion. Gregory in turn suggested that the minister had now had his 'birthday cake moment', although this seems unlikely. Malcolm Turnbull defending a website won't be costing anyone any elections.

For those who don't know, the MyBroadband site purports to show a 'snapshot' of the state of broadband availability and services in Australia (the snapshot was taken quite recently, in December 2013). Anyone in Australia can enter their address and find out what broadband is available, and the overall quality of the service they can expect.

For example, entering my address (in Carlton, Victoria) yields an 'A' rating for fixed broadband availability (I can get ADSL2+ and HFC, but no FTTP, FTTN or fixed wireless). Both HFC and ADSL2+ receive 'A' ratings. Mousing over the overall rating tells me that an 'A' rating reflects the fact that 'between 80 and 100 per cent of premises in the area surrounding your address have access to at least one broadband technology'. So, Carlton gets an 'A' purely because I can reliably get something, quite aside from how good it is. So how good is it?

Carlton only scores a 'B' for quality. This is achieved by averaging out the quality of the two service-types that are actually available: the HFC is (apparently) good quality HFC ('A') while the ADSL is deplorable ('C'). Perhaps you can see how this is misleading. By basing an overall rating for a suburb only on the available services in that suburb, you lose the capacity to meaningfully compare that suburb to another suburb that has more or less available services. Furthermore, if Carlton somehow had excellent ADSL2+, it would then score an 'A' for quality. This is the same score achieved by suburbs that have 100% FTTP penetration. Does that seem right?

If nothing else, they've set the bar for an 'A' rating rather too low (which is not surprising). The implication at every step is that HFC is an 'A' grade service. This seems consistent with general policy in this area. As mentioned in the Business Spectator article, Akamai's most recent State of the Internet global survey ranks Australia at 43rd in the world for average internet connection speed (peak connection speed is 37th). By setting its goals so modestly - any solution in which HFC speeds represent the ideal is hardly striving for the stars - the current NBN policy seems designed to maintain that ranking.

Add to this the fact that the website ratings don't actually reflect the services or quality available at anyone's actual house, despite what you may think, having entered your actual address. For example, MyBroadband lists Carlton's average ADSL connection speed at 11.18Mbps. Personally I average about 7.2Mbps.

Since this argument unfolded, a caveat has appeared on the MyBroadband website. Lest any visitors had been misled into assuming that the site might actually be measuring the broadband availability to their house:

The ratings that are about to be shown are indicative only and may not reflect the actual speed of the specific broadband service for the address entered.

 The ratings are based on an estimate of some of the factors that determine the speed of your service (for example, in the case of ADSL, the distance from the exchange). However, they do not account for some of the measures that allow higher speeds, and some of the constraints that cause lower speeds.

The ratings are calculated at one point of time only, so they do not reflect variations in performance that might occur throughout a day or week, and do not reflect any current or impending investment by suppliers to improve broadband availability and quality.

Thus we can say that the rating you receive from this reading may not be especially correct, and might be rendered even less correct by a range of factors.