That's almost entirely false. (ISP network engineer in Australia here)
The major cable leaving Australia for the last decade has been Southern Cross (there's more now) and the Australian government have no significant interest in it (the NZ government on the other hand does by way of cable system part owner Telecom NZ).
iTunes downloads (at least some of them) are cached by Akamai, and traditionally most medium to large ISPs hosted Akamai caches inside their network (at $JOB[-1] Akamai was ~30% and Google was ~15% of all bandwidth used for a regional education network).
It truly isn't any different for any other CDN, some host inside Australia and peer with local networks (IIRC Limelite do this), some only host in Asia (eg Amazon), and some (eg Steam) install machines inside ISPs for their customers.