It's high time for AWS to set up shop Down Under and teach Telstra et al the meaning of competition.
Yes, it is OOM $100/mbit to get international bw. But that's nowhere near $1/gig.
IMHO providers end up charging that much 1) Because they can and 2) To help offset a very high cost base due to a lack of automation and inefficient architectures. A million dollar san really doesn't pay for itself now, does it?
The real problem is that you don't have big neutral pipes. Build Pacific Fibre (http://pacificfibre.net/) and then things might be ok. Or do differential billing for domestic and international bandwidth, but for that, it helps to have a non-English domestic language and have all consumers only interested in local content due to the language barrier.
(Satellite is even more fun; CIR of $500-5000/mo for dedicated 1Mbps HALF DUPLEX, and then sometimes more than that for shared service overhead; it can come out to $10-20k/Mbps symmetric 100% use, with end user costs reduced through transparent compression of images, filtering, and oversubscription. Then there's L-band portable stuff which prices at $3-30/MB, and some which is $0.01/byte.)