BuddeBlog

Finally, after four years of ineptness, a good decision has been made by the Tasmanian Government to start utilising the broadband infrastructure that has actually been available for two years. Furthermore, I think that the decision to have Basslink and Aurora competing in the wholesale market is also an interesting one. These decisions will at least assist businesses in Tasmania to get much better and cheaper broadband.

It may be helpful to take a step back and examine the new situation against the background of the analyses and comments I have made over the past four years.

The key issue for Tasmania has never been capacity - the problem has been the price at which capacity is made available. I have mentioned many times that Telstra only lowers its wholesale tariffs when it is threatened with competition. We saw it doing this on the mainland - when companies such as Nexgen Networks and Powerlink lit their backbone networks Telstra immediately dropped its wholesale prices by 60%-80%.

So price has been one problem for Tasmania. The other one has been the local loop - the actual connection to people’s homes. We saw the Aurora Energy attempt - its Broadband over Powerlines solution - come to a grinding halt earlier this year.

But it is good to see that Aurora has not given up completely; rather it is settling for a role it perhaps feels more comfortable in, wholesale. Under the new arrangement Basslink and Aurora are now going to try and connect Telstra exchanges to the new backbone cable, and once that is done ISPs - such as Netspace and Internode , who have been very active in Tasmania - can then install their own equipment in the telephone exchanges, which will enable them to offer broadband services to their customers.

However, these Telstra exchanges are a gigantic stumbling block. Telstra has a range of cumbersome rules and regulations in place that have produced endless delays on the mainland in getting access to these exchanges. So this won’t be a quick and easy deployment. Furthermore, the equipment these competitors will use (known as ADSL/ADSL2+) has only a limited range around the exchanges - varying between 2 and 8 kilometres - and this will restrict access to the people who live close enough to these exchanges. So it won’t be a universal Tassie service.

Also, while the new wholesale prices are much better than the Telstra prices they are still more expensive than those available on mainland Australia, and this will make ADSL2+ (= high speed broadband) unaffordable for most Tasmanians.

Last but not least, there is the looming National Broadband Network decision that the Federal Minister will make at some point in 2009. This has the potential to make the whole ADSL technology obsolete, and that is a matter for great concern to companies that offer such services. At the moment companies involved in this technology have basically called a halt to investment as nobody wants to take the risk of investing in a technology that will see them ending up with a scrapheap of stranded assets.

So, while the decisions made by the State Government should be applauded, the fact that it took four years to get there in an industry that changes every six months is problematic. While there are good business cases for the business market and the high-end residential market - because they can afford the premium prices still applicable to Tasmania - the picture for the rest of Tasmania is somewhat bleaker. Sure, they will now be able to get more and cheaper ADSL services, but true broadband is still some distance away.

Paul Budde

See also:

• Australia - Regulations & Policies
• Australia - Telecoms Infrastructure

This entry was posted on Tuesday, November 18th, 2008 at 11:47 am and is filed under BuddeBlog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.