Australia's Internet industry body has dubbed the government's digital TV policy an "anti-competitive" fiasco that falls well short of what the public expects.

It's a week since digital TV's debut in Australia and it has been nothing short of a debacle since day one.

Firstly, the all important set-top box is still only available for demonstration in stores and is not likely to be available for retail until the end of the month. Some argue that the AU$699 price tag is too costly for the average consumer, and the device will become redundant within 12 months.

There's also concern that digital TV in Australia is too restrictive in content.

The Shadow Minister for Communications, Stephen Smith, has attacked the federal government, accusing it of implementing the regime in a "lacklustre fashion".

"We think in terms of the design of the scheme there are clearly a couple of major failings," the shadow minister's spokesperson, Simon Banks, told ZDNet.

Datacasting falling short?
Of particular concern is datacasting under the government's digital regime.

"In terms of providing a datacasting service that would be attractive to consumers, the government has been deficient in that regard," Banks said.

"If you opened up the datacasting regime and made content more attractive, Australians would be more willing to take up the technology, the regime would be a success and it'd bring down the cost," Banks said. "It'd be a win-win for everyone involved." He says the government has failed to make digital TV attractive in the face of a range of alternative products, including pay-TV and Sony playstation which are competing for the consumer dollar.

"If Australia is seen to be lagging behind the rest of the world in the content-based industry we will lose export dollars and jobs," Banks said.

The IIA agrees
The Internet Industry Association (IIA) agrees that there are serious flaws in the government's datacasting policy.

"The government has mistaken datacast interactive television for 'television by the back door'," the IIA said.

"In a less restrictive environment there would be more incentive for competition, lower prices and more diversity of content," IIA executive director, Peter Coroneos said.

"The future of wireless interactive services for all Australians has been seriously compromised to protect established broadcasting interests."

The Opposition says another failure is the availability and cost of set-top boxes.

"You still can't walk into a store and buy a set top box," Banks said.

"Inevitably they've made equipment for the digital TV market more expensive through lack of supply. If they'd got the regime right, digital set top boxes would be cheaper."

The IIA supports the comments.

"A week into the new regime, what have we got?" Coroneos said. "Precious little. Boxes costing AU$700, virtually unobtainable by the average viewer, and a public recommendation that consumers not buy them."

Government stands firm
In retaliation, the government claims that the shortage of set top boxes is no fault of its regime.

"It's a matter of timing," according to a spokesperson for the Communications and Information Technology minister, Senator Alston.

"There's a queue in terms of people who want to get hold of them."

Commenting on the cost of a set-top box, Alston's office said decoders were in their infancy and consumers were under no compulsion to buy them.

"AU$700 is the initial starting price, as demand increases it will go down," Alston's office said. "Obviously it is not petty cash but it's not a massively exorbitant price." The Opposition also condemned the government for the interference caused by the transmission of digital signals, "which in the government's own words, it has known about right from the beginning," Banks said.

"It's unacceptable that well after the [launch] date these issues haven't been sorted out," Banks added.

Open standards
According to the IIA, by failing to mandate an open standard, the government has left consumers unprotected from increasing upgrade costs.

"Many people will not buy the upgrades and will miss out on the real potential of the technology. Every way you look at the regime you see 'anti-competitive' written all over it," Coroneos said.

However, the government claims to supports open standards but "it would be premature to mandate any particular standard," Senator Alston's spokesperson said.

"What do we do? Preempt the market? Mandate an open standard which will effectively by made redundant?"

Alston's office says it would be premature to make changes. "We're only two weeks into it," the spokesperson said. The first policy review is not scheduled until 2003.

"We would obviously prefer that they review it much sooner," Coroneos said. "Our concern is that each day that goes by the present regime will become more entrenched and all the problems we're pointing to will become harder to fix down the track."

Copyright © 2009 CBS Interactive, a CBS Company. All Rights Reserved.
ZDNET is a registered service mark of CBS Interactive. ZDNET Logo is a service mark of CBS Interactive.