The Price of Broadband in China

OJ Pennington

Two weeks ago I was nestled high in the Himalayan foothills in the southwestern Chinese town of Dali. The ancient city is popular with Chinese tourists and a few western back-packers.

I decided to wait and write this piece on my return to Australia, but could just as well have written it at the time because the place where I was staying had a wireless broadband Internet connection. It was a shock to me that such a remote place would have equivalent telecommunications facilities to Australia's best. I asked my host how much he paid for this connection. "About six hundred Yuan (about $100 Australian) annually" was his reply. Similar services in Australia are at least three times as expensive. This might seem cheap for a western visitor, but by my reckoning this is around ten times more expensive for a Chinese worker if you compare the cost of the service to relative income. It is also useful to consider that the cost of servicing an area the size of China would not be dissimilar to the cost in Australia. Considering that there are 50 times as many potential customers, the service should have been even cheaper. Undoubtedly this price will fall as more and more people adopt the technology.

I was also surprised at the proliferation of mobile phones in this remote corner of the world. It was not uncommon to see street vendors, taxi-drivers and labourers idly chatting on their late model Motorolas. It seemed unusual to me that people with very little wealth would choose to spend their limited money on a mobile phone, rather than a decent pair of shoes, a trip to the dentist, or a sturdier pair of trousers. My host told me that there are now 300 million mobile phones in China.

Another surprise was the quality of roads. The 30-odd kilometres of dual carriageway between the airport and twin cities of Xiaguan and Dali seemed over the top as I counted more passing cyclists than cars. This road was pristine: two faultless ribbons of bitumen curling through the mountains.

All of this was a little unsettling for me. I had not expected to find such high quality infrastructure in such a remote place, let alone such a remote place in a country often criticised for neglecting its people. Most I had heard about China was negative: "Real Chinese food is terrible. You won't see a tree that's more than ten years old. You know that they kicked all the degenerates out of the cities because of the Olympics. They hide slums behind massive hoardings on the side of the highways. You won't see any domestic animals in the street. You won't see any birds." I was not seeing anything to corroborate any of these assertions in Dali.

I should mention here two things. Firstly, Dali is a small town in Yunnan province, which, according to my host, has maintained a particular distance from the administrative clout of Beijing. Secondly, to judge an entire country based on observations in one place (especially such a small town in a remote geographic location) would be akin to judging the merits of Australia based on a week spent in Tenterfield, Karratha, or Shepparton. These places only capture a small slice of the Australian culture, and are a world apart from each other and the major metropolitan centres, so why would Chinese regional cities be any different? Nevertheless, life in Dali threw life in Sydney into sharp contrast.

Why had they built a beautiful dual carriageway most commonly used by bicycles? Why had they laid thousands of kilometres of cable for Internet connections when most people can't afford the service?

China's over-investment in infrastructure demonstrates concern for the welfare of the people generations down the track, rather than for today or even next year. This is in sharp contrast to Australia's obsession with user-funded infrastructure, especially in the transport and telecommunications sectors, which shifts the focus away from the long-term, indirect interest of the people to the short-term, direct interest of shareholders.

The Cross City Tunnel is a perfect example of this attitude. Sydney's commuters needed a quicker way to get through the city. A private company built a toll road. The toll is too expensive for cheapskate commuters to stomach, so nobody is using it. The government has altered traffic conditions through the city to encourage people to use the tunnel, clogging up the city streets even more. Traffic through the city was bad and the solution has made it worse. It's a farce. The problem with this arrangement is that there are other significant benefits of the tunnel that are of little consequence to the company who collects the tolls and administers the road. They are not interested in the general economic and social benefits of getting people to work and back home faster. They are interested in collecting the toll today from commuters. I have never met anybody who loves sitting in traffic, so it is reasonable to think that a large segment of the Sydney population would be happier and more productive at work and in their family lives if they had a few hours less time in traffic each week. If I ran a company, I would want my employees to travel to work in the most efficient way possible, rather than arrive at work late and frustrated. I would also want them to get home quickly and safely and spend their leisure time actually relaxing. I might even think that this happier worker is worth paying for, whether that payment be through tax or otherwise. Furthermore, privately funded projects like the Cross City Tunnel do not recognise the benefits for other city commuters who enjoy less congestion, or those who enjoy the lower pollution levels, or the faster bus ride down George Street.

Perhaps it is a consequence of democracy and our short political cycle that no government has the time to waste on foresight. Or perhaps it is illustrative of a culture hell-bent on enjoying the present without really thinking too much about what will happen in two generations time. Either way, it would be prudent if individuals and the government alike dedicated more thought and investment in solutions for long-term issues, so we don't have to pay tolls tomorrow.

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