iTWire Technology Feature - 
TAG | Tasmanian Government strangling the Internet? |
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| by Alex Zaharov-Reutt | |
| Monday, 05 May 2008 | |
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Page 1 of 3 Affectionately known as “The Apple Isle”, with no connection to the computer company, Tasmania does have one fibre-optic cable connecting it with the Australian mainland, built at a cost of AUD $50 million, and owned by Australia’s dominant telco, Telstra. Internode, an ISP headquartered in South Australia, has been providing ADSL2+ connections to Tasmanians, but due to heavy costs, has decided to limit new ADSL2+ connections to business customers only. Internode says that broadband backhaul capacity across Bass Strait is limited to a “monopoly supplier, Telstra”, making it “six times more expensive for Internode to transfer data between Melbourne and Hobart than it is to move data between Melbourne and the United States”. Serious stuff – especially when a second link across Bass Strait, the water covered area between the Australian mainland and Tasmania – is reportedly carrying no consumer traffic whatsoever, despite the Tasmanian Government paying AUD $2m per year to Aurora, the company managing the second fibre link. As a result, Internode’s MD Simon Hackett, said his company “had reluctantly decided to suspend sales of the highest speed [Internode ADSL2+] HOME broadband plans, due to the high cost of backhaul services to Tasmania, while still offering more expensive plans to business customers, plans which cover the additional cost of backhaul over Telstra’s fibre link. “Unfortunately, the cost of bandwidth to Tasmania remains appalling, as often happens under monopoly situations. We've recently completed a major upgrade of our link to Tasmania, but continuing to sign up new customers for high-speed, lower-cost HOME plans would quickly create new congestion issues.” Hackett continued: “While we know this decision will disappoint some people, we need to properly service our existing Tasmanian customers with the resources we have in place. Until transmission costs decline, this is the best way of doing it. Based on our experience, we expect the arrival of infrastructure competition, with the eventual launch of the long-awaited Basslink cable across Bass Strait, to put downward pressure on prices.” Hackett explained that Tasmanian customers “could obtain a new high speed service by selecting a SOHO broadband plan, which cost $20 per month more than a comparable HOME plan. “ Continuing, Hackett noted that: “This cost is approximately the additional impost, on a per-user basis, that Internode pays to acquire monopoly-priced backhaul to Tasmania from the mainland. This exemplifies the effective 'tax' on retail customer services that is generated when the underlying service economics are the prisoner of monopoly infrastructure. It underscores the potential for national retail broadband prices to rise, should Telstra construct a monopoly-owned FTTN network." So, what are the Tasmanian Government doing? And why are Telstra’s prices so high, according to Telstra? Please read onto page 2. |
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