This paper examines the political and economic circumstances surrounding the introduction of international telegraphy to Australia in 1872 and outlines the model of service provision _ essentially a single private provider operating as a state-subsidised monopoly, that subsisted with respect to the link to Australia between 1872 and 1902. It also considers how international telegraphy re-configured the information ecology in which business operated and prompted controversy amongst allegations that this new technology advantaged a privileged few rather than the community as a whole. Finally, the paper examines public policy responses to the upheavals and perceived inequities generated by international telegraphy. There was much criticism relating to monopoly pricing and the allegedly 'exclusive' business model utilised by the British-Australian Telegraph Company. But what could governments do about this new 'information divide'? How could they intervene? There was also widespread concern about opportunities for knowledge monopolies and information manipulation afforded by the telegraph (in relation, for example, to stock markets) while at the same time there was concern, particular amongst newspapers, about the need to protect private property interests in telegraphic information. This paper examines a number of such dimensions of the 'telegraph problem' of the 1870s and the public policy responses they elicited.