There will be little change in the near future with the re-regulation of Telstra underway prior to taking the wholesale arm back under government control – the so-called National Broadband Network (NBN Co). The privatised wholesale arm of Telstra has suffered from new competition and an impossible objective of servicing non-profitable parts of the Australian market, with the share price heading towards its “real” value of around AUD$2.50.

Market failure ensured that rural, remote and poorer suburban areas could not be serviced by a privatised Telstra that needed to report “profits” while simultaneously losing market share. Previously these areas had been reasonably serviced under the old USO rules and under the older “public service” mentality of pre-privatised Telstra. However, with near complete privatisation in 2006-2007, the previous conservative government effectively abandoned proper USO cover for what was curiously a predominantly rural electorate. It is a tribute to government spin that rural voters, normally supporters of conservative governments, allowed this occur – and to add insult to injury – actually bought shares at over AUD$7.00 – in a company that was doomed to fail. Shares are currently heading towards AUD$2.60.

Those left out of government telecommunications infrastructure and support should watch events closely – not the NBN Co which will really only work in densely populated areas – but the newer USO Co that is supposed to address the inherent market failure in the current model. The core of government principles in supporting Australians in need in an equitable manner is embodied in this entity, and it has the potential to free up NBN Co to deliver what policy makers have talked about for so long – a solution to the tyranny and inequity of distance that unfairly handicaps Australians not living at the big end of town.

If the USO Co is successful perhaps similar entities could be deployed in other areas of market failure and inequity in Australia?

The election of Barack Obama – against the odds and established power – brings political if not economic hope which may represent a return to the real social values that build for the long term, not simply for short term gain. A refreshing re-evaluation of regulation and its place in modern economic and technological development will only “hurt” established players who have invaded and now mainly dominate new media, and perhaps allow new blood and new ideas breathing space in a shrinking economic pond.

In Australia the Telstra stranglehold over media and Australia’s future gathers strength in the face or weak political will and leadership. What political leader would do the right thing and ensure structural separation of Telstra’s retail and wholesale divisions that would finally remove its monopoly? Not one as such a move would reduce its share price and alienate its shareholders and decimate the so-called Future Fund where it makes up 20% of the fund’s value.

The earnest committee examining current proposals to build a rival broadband network faces the same fatalistic outcome: Telstra will not be refused a place at the broadband table and so the inevitable “decision” will soon force an unholy “partnership” between the telco monopolist and its rivals, permanently crippling innovation and development in technology in Australia.

Only strategic intervention in both constraint and the fostering of new players can dig Australia out of the hole left by ten years of complacent conservative government. This is a trial of the new “progressive” government and only their success in this issue can ensure they won’t be a one term government, and that Australia has a bright future in gloomy times.

Bearing the brunt of this will not only be Australian citizens – you and I – and business, but also the Rudd Labor government. Rudd will also bear the blame, but for no good reason other than he’s the recent (end 2007) incumbent.

The current correction is caused by the same basic factors that caused the last two:

- lack of strategic government intervention and appropriate regulation
- non-strategic government intervention and inappropriate regulation.

What is wrong with this picture? What has caused governments here and around the world to intervene where they cannot assist, for example in choosing which large industries to fund and give tax credits to, and to regulate the wrong thing – to regulate poorly, or to not regulate at all when they should. Short-selling of shares, especially in banks, powered the rapid fall in January 2008 and fuelled the exaggeration of shareholder concerns as to the undisclosed liabilities in so-called “sub-prime” loans in the US.

This was especially the case in the Tricom-Allco case where Tricom “lent” short-sellers Allco stock it held to short-sell. The short-sellers were institutions managing our shares and superannuation and so we all lost out as the market fall was exacerbated by rampant uncontrolled short-selling.

Why were we not told of the sub-prime liabilities of the banks in December 2007 when they were fully aware of the crisis? Where was ASIC, the weak Australian financial regulator, when the crisis began in November 2007? Australia needs good strong government and strategic regulation to escape the troubled times ahead.

This instability will likely negatively impact on education, research and development, and cultural support in Australia at the precise time when government should be investing in these greenfield areas for our future. What better way to inject non-inflationary stimulus than through education and R and D?

Putting in superannuation will simply mean we lose more money on the next major crash! It would demonstrate that government is under the control of not only property developers, but also the “big end of town, the banks and large businesses that desperately rely on a flood of “dumb” or “default” superannuation money to feed profligacy and poor businesses.

If the Rudd experiment (or was that “revolution” – remember Barry Jones was talking about a necessary “education revolution” in 1999!) is to not fail it will only be because he breaks the mould and inverts the current government-industry relationship.

If it fails we will be able to detect failure by the growing direct connection between people and their concerns using new communications technologies, and the related growing of third parties and independents. Political parties and causes utilizing new media (web 2.0, 4.0, 5.0 …etc.) will benefit from moribund big parties burdened by corrupt campaign payments scandals.

In the next three years we will see politics take to the web like never before. Will parties like the Greens be the winner? Nothing is certain except those that use the new internet politics well will dominate the next election.

Where is the party, or government – who understands the past, present and future, and can take Australia strategically and relatively safely forward?

The November 2007 federal election means uncertainty in the outlook for research and development, education and regulation generally. New laws passed in these last few months of the election – as much as those in place – run the real risk of being ceremoniously overturned a few weeks after a successful electoral Labor win.

The maturing web environment continues to present challenges to Big Old Media. If it’s the case that the underlying reason for the success of “social/web 2.0″ websites is their attraction as “antiestablishment” and “non corporate” spaces, then Murdoch’s MySpace, Google’s YouTube (and locally) Gate’s and Packer’s ninemsn and Stokes and Yahoo’s yahoo7 could be in trouble.

Can “anti-establishment cool” be defined and mined by the “establishment” as record companies did in the past? Will we – and the communities in these spaces – even notice that our (rebellious and collective) experience is synthetic? Perhaps, given time, it could be improved to be better that the real one…

Web folk are cynics by nature and so far the prognosis is not good for any “social” web strategy with overt commercial overtones. The whole problem could simply be reduced to one of whether ads can be made “ambient” enough to not be noticed in the midst of the new media mashups of rabid content and community producers – who hate ads. No or very low subscription fees and having few constraints on the producers are in every case also critical.

In the next few years who or what will win the tug of war between the old and new ways of doing things in new media and technology – and between the old corporate and new community approaches? And is it possible that each side may learn something from the other in the process? Worse, it may finally be revealed as just an endless cycle.

New ventures, as with new media, websites and social networking systems, pop up like mushrooms overnight to confound, challenge and sometimes consume the old. In such an environment no one can afford to ignore any possibility.

This is what makes it an interesting act to watch in the gladiatorial cultural arena of the new, an arena over which the newly “sovereign” pro/consumer holds out their collective thumb.

The new tech “boom” of 2007, with Google above $500 US, looks more like a bubble with every passing day and wise investors and venture capitalists would perhaps best steer clear of high risk plays such as these.

With the disastrous handling of Telstra by the government – and with the rise of the shares in the partially privatised government telco notwithstanding – the lack of a strategy to let new players into the telecommunications and media markets continues to cripple Australian new tech industries, forcing many overseas.

ICT and new media training is still in a parlous state, and is leading to inevitable shortages similar to those being felt in the building trades after years of government neglect. The incumbent government after all is the party of employers, not employees. So we have seen a subsequent rise in executive pay, and a drop in company and executive tax and other forms of corporate welfare, while little attention is paid to the workforce itself.

With control of both houses of parliament, the government has reinforced the oligopolistic practices of big media in the “new” media laws, allowing further consolidation to take place. This exhibits the characteristics of a scale-free network of business interests, allowing a true power law of the market to operate. In Australia big media get bigger, and small players get smaller until bought out, or bankrupted.

The potential of the new media and technology industries to launch Australian out of the iron ore hole that it has dug itself into, diminishes every day. When the Chindia minerals and metals boom fades, what exactly will be left?

An “iron ore republic”, Kevin Rudd and 17% interest rates? Could this be the future we had to have?

A repeat of the 1999/2000 market correction will drive innovation in the direction of applied (immediate returns, low risk), rather than pure (non-specific, and leading edge) research. With the steady and persistent growth of new digital communications applications and services (such as SMS, blogs, blogcasting and mobiles) these growth areas are where investment capital is compelled to focus, correction, or no correction.

Australia’s incumbent conservative (Liberal-National Party) government gained control of both Houses of Parliament (Senate and House of Representatives) in July 2005 allowing relatively unimpeded passage of its legislative agenda. Media regulation is therefore likely to change, and consequently, local conditions for the industry are about to undergo another sustained period of change. If economic conditions take a turn for the worse, Australia’s IT and new media sectors will again face difficult times, as they did after 1999. And this on top of the increasing dominance of US media (and US media local clones) ably assisted by the ubiquitous web.

Currently IT, Computer and New Media studies student uptake is falling in TAFE, Universities and Registered Training Organisations. As uptake falls, so falls Australia’s competitive strength and potential in the digital communications development hotspot and in associated future sunrise industries.

One view of the purported market “diversity” enabled by new media, cable TV and the web is that media presence (visitors, reach, brand, market power) is, put simply, like a game of marbles, where the bigger the marble (presence), the more likely you’ll knock your competitors out of the ring. From this viewpoint, the web allows big media to be *very* big – and always bigger than its (Australian) media rivals (i.e. viewers/visitors > reach > turnover > profits).

Small media – read local independent Australian – loses out in this unfair market and so must be supported by government policy intervention (e.g. legislative underpinning of access rights for independent media, grants, R&D, start ups and venture capital tax concessions, training/ textbook/ website publishing support).

An example of appropriate and strategic government intervention would be to mandate that the Australian Communications Authority (ACA) not allow new cable TV and web media proto-markets to be considered as mature and separate media markets. Instead the new media would be seen as emergent markets warranting near-term, strategic legislative attention and intervention.

Australia’s unique position in the region and a relatively strong economy could make it a potential “safe haven” if the global economic waters were to turn choppy.

However, Australia’s potential haven status is fragile and needs strong government management to prevent a significant downturn in local economic conditions if the US economy falters. What will be the government’s response to deteriorating US economic conditions and a loss of consumer confidence (when nearly 70% of the US economy is driven by consumer spending), to ensure the stability of the Australian economy, the tech sector and research and development?

Proper and strategic government management of, and intervention in, vital issues in media, telecommunications and informatics could secure Australia as a haven for innovation and development in the region. Development of Australia’s potential – through strategic legislation, education, training and resourcing – is a necessary and important part of the work of government, not simply the market.

The increasing market power and price of search engines such as Google and Yahoo hearkens back to the irrational exuberance of the late 1990’s. Caution may be needed  as some analysts see an imminent tech stock correction – perhaps even an across-the-board correction. And this in the face of a tech sector where t most likely to experience persistent user growth and demand – and consequently, investor interest.

Any repeat of the 1999/2000 market correction will drive innovation in the direction of applied (immediate returns, low risk), rather than pure (non-specific, and leading edge) research. With the steady and persistent growth of new digital communications applications and services (such as SMS, blogs, pod or blogcasting and mobiles) these growth areas are where investment capital is compelled to focus, correction, or no correction.

The increasing market power and price of search engines such as Google and Yahoo hearkens back to the irrational exuberance of the late 1990’s. Caution may be needed  as some analysts see an imminent tech stock correction – perhaps even an across-the-board correction. And this in at time where the tech sector is most likely to experience persistent user growth and demand – and consequently, investor interest.

Australia’s incumbent conservative (Liberal-National Party) government gained control of both Houses of Parliament (Senate and House of Representatives) in 2005 allowing relatively unimpeded passage of its legislative agenda. Media regulation is therefore likely to change, and consequently, local conditions for the industry are about to undergo another sustained period of change.

If economic conditions take a turn for the worse, Australia’s IT and new media sectors will again face difficult times, as they did after 1999. And this on top of the increasing competitive dominance of US media (and US media local clones) in Australian media markets ably assisted by the ubiquitous web.

Currently IT, Computer and New Media studies student uptake is falling in TAFE, Universities and Registered Training Organisations. As uptake falls, so falls Australia’s future competitive strength and potential in the digital communications development hotspot and in associated and consequent sunrise industries of the future.

One view of the purported market “diversity” enabled by new media, cable TV and the web is that media presence (visitors, reach, brand, market power) is, put simply, like a game of marbles, where the bigger the marble (media presence, market or mindshare), the more likely you’ll knock your competitors out of the ring. From this viewpoint, the web allows big media to be *very* big – and always bigger than its local (Australian) media rivals (i.e. viewers/visitors > reach > turnover > profits).

Small media – read local independent Australian media – loses out in this unfair market and consequently, to be realistically competitive, must be supported by government policy intervention (e.g. legislative underpinning of public access rights for independent media, grants, R&D, start ups and venture capital tax concessions, training/ textbook/ website publishing support, and other necessary resources).

An example of appropriate and strategic government intervention would be to mandate that the Australian Communications and Media Authority (ACMA) not allow new cable TV and web media proto-markets to be considered as mature and separate media markets. Instead the new media would be seen as emergent markets warranting near-term, strategic legislative attention and intervention.

Australia’s unique position in the region and a relatively strong economy could make it a potential “safe haven” if the global economic waters were to turn choppy.

However, Australia’s potential haven status is fragile and needs strong government management to prevent a significant downturn in local economic conditions if the US economy falters. What will be the government’s response to deteriorating US economic conditions and a loss of consumer confidence (when nearly 70% of the US economy is driven by consumer spending), to ensure the stability of the Australian economy, the tech sector and research and development?

Proper and strategic government management of, and intervention in, vital issues in media, telecommunications and information and communications technology could secure Australia as a haven for innovation and development in the region. Development of Australia’s potential – through strategic legislation, education, training and resourcing – is a necessary and important part of the work of government, not simply the market.

Our potential market is like a garden (as Chauncey Gardiner might say) and needs tending, otherwise weeds (temporary droughts, downturns, poor corporate governance, poor government incorporation and other such “unforeseen” circumstances), can get out of hand. Valuable crops, especially future seed crops, suffer unnecessarily.

Diligent (involved, proactive, responsive, balanced) and appropriate (strategic, useful, topical, transparent) government engagement becomes more necessary in a changing social and economic environment, and serves not only the public interest, but also, necessarily, the long term interests of for profit enterprise and development.

The turn-of-the-century drive for “new technology” at any cost is now firmly out of fashion thanks, among other things, to the state of the market and the “old” economy. The stockmarket and some sections of the economy will remain subdued until at least end 2005 and more likely first quarter 2006. Many opportunities remain even under these conditions.

In a reaction to the exorbitant and failed promises of the promoters of the “new” economy bubble in 1999, the next few years will be characterised by an alternative human-centred focus on: “new skills”, “new experiences”, long-term “sustainable” policies and the development of a new “flexible” social sensibility that can more easily and continuously adapt to ongoing change.

This new human-centred and less materialist approach could arguably be a key legacy of the 1999-2002 economic meltdown. Together with improved corporate governance, and a new regulatory regime that recognises openness as well as the need for appropriate intervention to balance large and small interests, and short and longer-term objectives, in later years 2002-2003 is likely to be viewed as a significant turning point.

Although technology investment may currently be restrained, given their persistent popularity, communications technologies (messaging, mobile phones, the internet, etc) will retain a key place in our social and work environments, present and future. These technologies will continue to rapidly develop in scope and scale despite inclement economic conditions and will succeed, as always, only when proper account is taken of the needs of real people in real situations.

Following the October 2004 Australian federal election, the Liberal government’s response to deteriorating US economic conditions is crucial for the next 24 month’s outlook. What will Canberra make of a US recession brought on by a loss of consumer confidence (with nearly 70% of the US economy driven by consumer spending), the intensifying Iraq insurgency, rising US interest rates, a falling US dollar, and continuing poor jobs growth)? Can China, India or Europe offer new opportunities to balance a US decline?

Notwithstanding such a climate, likely to continue in the near term, core communications technologies will experience persistent growth driven by this inward focus. Such attitudes are more likely to value communications that don’t threaten or cajole, that give direct and personally relevant results, and that reinforce security and control over the local social environment. Mobile phones, SMS and the web ideally fulfil these requirements at present, and will remain hotspots, but wireless, or other future conforming technologies, offer similar potential.

The legacy of the tech bubble, brought on by the sales acumen of IT specialists and NASDAQ speculators pushing high-cost, complex solutions (see under Y2K, CRM, B2B, etc), has made many wary of technology. However, well thought out, appropriate and straight forward strategies have always returned benefits – and this is also the case with communications technologies.

With a lot of the hype removed, and with the growth and development of new services, technology may just get its good name back. However, “Google Hubris” still reigns supreme in the virtual halls of hybrid 21st century capitalism (watch for the Google share price to tank when the next, and better, search engine comes online, after all Google is just a database).

Under similar mixed economic conditions in the past, it has been a time a great creativity and new ideas – partially in reaction to the conservatism brought on by the preceding economic boom. In addition, Australia’s unique position in the region and a relatively strong economy make it a potential “safe haven” in the near term as the global economic waters turn increasingly choppy.

The Australian federal election looms on 9 October 2004, and who can say what either a Liberal or Labor government will make of the mid 2005 US recession brought on by a loss of consumer confidence (rising US interest rates, falling dollar, poor jobs growth and President John Kerry’s retro “old-con” deal in the face of continued US catalysed, middle eastern tribal warfare)?