From what I understand, Australia's poor internet service is more due to poor ISPs and government meddling than the quality or quantity of the backbone.
No, those are explained by the average consumer not having a clue whether website X is national or international. Seperate billing has been tried in some places, AFAIK always abandoned because it confused customers and made them feel like they were getting screwed over.
Australia has 20 million people and is at the 'end of the line'. Japan has 100 million people, and just behind it (from the US side) are the twin internet powerhouses of South Korea and China.