Internode agrees with 'controversial view' on Australia’s broadband

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Internode agrees with 'controversial view' on Australia’s broadband

An analyst and telco share their views and 'controversial' take on the broadband issue.

Dr Kevin McIsaac an analyst from Australian analyst and advisory company IBRS has released a statement taking a different and controversial look at the broadband issue.

In a statement to the press Dr McIsaac felt there has been no debate about what type of broadband solution would best suit metropolitan Australia, while Telstra and G9 are wooing the Federal Government with promises of large capital investments to build a “Fiber To The Node” (FTTN) network in the metro area.

Australian-based service provider, Internode agrees with what Dr McIsaac wrote, said Jim Kellett product manager at Internode.

He told CRN Dr McIsaac had written some valid points about how FTTN was nothing more then a distraction to the real issues surrounding broadband.

“What has always struck me about FTTN is that it’s to focused on technology rather then outcomes for the people,” he said. “A lot of customers on DSLAM are getting what they need requirements without any major technology changes.”

According to Kellett FTTN has more implications in terms of remonopolising access networks rather then delivering bandwidth.

“Call me a cynic but the real issue is how best to get broadband to most Australians and FTTN is a bit of a distraction to this debate,” said Kellett. “It’s not the main dish in the whole Australian debate and that is demonstrated by the fact that high bandwidth is available from competitors and done without the incumbent.”

According to McIsaac rather than improve broadband access FTTN may only make the situation worse. Specifically, the danger to Australia is that FTTN will create a monopoly network where the owner will be able to a charge higher price for a service that is inferior to that already provided over the existing copper network,” he stated.

He believes it is the innovative, mid-sized ISPs that are offering affordable, true high-speed broadband.

“For example, at the same price as Telstra’s 256 Kb/s “Fast” plans, other ISPs are offering 24Mb/s plans (i.e., 100 times faster) with comparable download capacities. These affordable, high-speed broadband plans are only possible because these ISPs have access to the exchange and the local loop at regulated and competitive rates,” he said.

McIsaac goes on to state that the ABS report that 3.8 million Australian households (about 50 percent) have a broadband connection (i.e., always on, 256Kb/s or more) and according to recent reports this is above average for OECD countries.

“The problem is that most Australian households subscribe to a service that is so slow it is hardly broadband, i.e., only 1.4 million, or 19 percent, of households have connections of 1.5Mb/s or more. This is not because of a lack of access to fast broadband but most likely due to the pricing structure of the dominant ISP, Telstra,” he said.

Innovative ISPs already offer fast broadband (ie. up to 24Mb/s) to a large section of the metropolitan area using ADSL2+ over the existing copper network. According to iiNET, over 90 percent of their customers currently get speeds in excess of 6Mb/s and at least 50% get 12MB/s. Telstra states that 50 percent of people on their 20Mbps plan get 10Mbps or more and Minister

According to McIsaac, Coonan recently said “there are around 3.9 million premises in Australia with access to download speeds of more than 6 Mbps” using ADSL2+.

So, if over 50 percent of Australian households have access to fast broadband connections of 1.5Mb/s or more, but only 19 percent use fast broadband, the barrier to adoption is not access and it must be something else such as cost or demand. Clearly rolling out FTTN will not address these issues and the danger is that it may eliminate the existing copper network upon which the innovative ISPs are already providing fast and affordable broadband in the metro area.

“Rather than lock Australia into an expensive FTTN network, stifling innovation and risking an uncompetitive monopoly offering with an inferior solution at a higher price than today’s best ADSL/2+ plans, the government must first determine the real barriers to adoption of fast broadband and then create an open debate how to best lower those barriers,” said McIsaac.

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