There are several relevant metrics that interact with the market in this situation. Off the top of my head, there’s
1) The quality of the product that a company provides.
2) The size and scope of the company.
3) Whether or not they have a local presence.

I’m saying that #1 should be the primary factor in market share, and that providing cheaper access to a company’s products when they have a local presence skews the market, increasing the importance of #3 as compared to #1. And when #2 can be used to purchase #3, that skews the market even further. Consumers are incentivized to patronize certain companies, independent of the quality of their product. It’s a barrier to free trade, similar to a tariff or import tax.

I suppose this doesn’t really look like a problem until you look at the big picture. Sure, if it were only one country, maybe everyone who wanted to do business there could afford to peer locally. But there are a lot of countries in the world. How many businesses can afford to peer with all the local networks in the world?

That’s why I said it creates a situation in which local companies, and big foreign companies who can afford a local presence, will profit and acquire market share regardless of the quality of their products, whereas a foreign startup is already at a disadvantage, even if they have a better product.

The customer only wins if you assume that all they want is cheap content, and that any content will do. This is a very commercial view of content, and of the internet in general. You would reduce the ability of the individual to compete with established companies, and turn the internet into just another “big media” platform.

This sort of setup does benefit genuinely local companies, though once again, they are rewarded for being local, not for the quality of their product. It also benefits those already on top of the food chain. However, it penalizes a smaller, nonlocal company that is trying to reach a bigger audience with their superior product. If customers will be dissuaded from accessing their product, then they might as well throw in the towel. The local company is also unlikely to be able to compete with the large international company, because their local advantage isn’t an advantage if the international company can expend its immense resources to gain the same advantage, so they might as well give up too. Then all we’re left with is massive international corporations with a monopoly on a market that they’ve purchased, and not won through providing a better product. Prices go up, quality goes down, and customers have no choice.

Good luck to you down there, it’s about time that you guys have better access to content.

Another minor correction though: New Zealand isn’t part of the continent of Australia. According to the Wikipedia article you linked to, the Australian continent consists of Australia, Papua New Guinea, and portions of Indonesia. To be honest, didn’t actually know this either! I thought the continent of Australia consisted solely of the country of Australia.

Still, New Zealand is a close neighbour to Australia, and the only other 1st world country in the area. There are a lot of similarities between the two countries, so your point still stands :)

But that’s a minor point James. The key point is that content providers should host more content in Australia so that they can get better usage allowances on local content.

I’m paying $70 per month to Adam Internet (my ISP), and I get 80GBs of quota. I just checked a couple of other popular ISPs, Internode and iiNet, and they get 50GB and 55GB respectively. I don’t know who the hell Orcon are, but that is NOT a representative sample of what broadband costs here.

Hang on a second, I just checked the Orcon website, and it appears that they are a NEW ZEALAND company. New Zealand is not part of Australia!

Unless I’m missing something, I think a correction needs to be made in this article…?