Internode protest brings Tassie broadband to the boil

Effective May 6, the national ISP will suspend Tasmanian sales of its eight megabit per second (Mbps) and Extreme ADSL2+ HOME broadband plans until further notice.

Tasmanian customers with existing 8 Mbps and Extreme ADSL2+ HOME broadband plans will continue to be provided with Internet access uninterrupted.

In lieu of the cancelled plans, potential Tasmanian-based Internode customers will now have to choose HOME broadband plans running at standard ADSL speeds up to 1500/256kbps.

Those eager for higher download speeds will be able to purchase Internode’s range of SOHO and Business plans, albeit at much greater prices than those on the HOME plans.

Internode blamed its sales suspension on Telstra, stating that the prohibitive costs of supplying broadband backhaul to Tasmania forced the ISP into this action.

Internode used the example of international data transfer to illustrate the costs it was facing in Tasmania. Data transfer between Melbourne and Hobart is said to be six times more expensive than it is between Melbourne and the United States.

Telstra spokesperson, Martin Barr, defended the telco’s backhaul pricing structure, claiming that transmission prices were a function of the cost of installing and maintaining the infrastructure to Tasmania.

“While cabling from Melbourne to California (for example) carries vast amounts of data to and from Australia and beyond, there is a much greater capacity for Telstra and other cable owners to recover the costs associated with building and maintaining their cable,” Barr said.

“Telstra does more than any other carrier to provide a route for internet traffic in and out of Tasmania but we need to be able to recover the costs for maintaining and upgrading the links we have built.”

For a number of years now, Tasmania’s broadband woes have been simmering with the discontent of ISPs eager to expand their services into the Apple Isle but unable to do so due to the prohibitive costs involved.

In years past, both Netspace and iiNet postponed plans to expand into Tasmania, citing Telstra backhaul high-pricing and the unavailability of the Basslink HDVC fibre cable as the two main deterrents.

Despite completion of the Basslink HDVC fibre connection in July 2005, the Tasmanian Government is yet to open up traffic between the two islands. As the situation stands, Telstra is the only operator of commercially available data cables connecting Tasmania to the Australian mainland.

But now that Internode’s decision to suspend some of its Tasmanian Internet has come into effect, the region’s emerging sense of broadband discontent has come to the boil.

Already, Internode’s action has prompted a new broadband consumer action group to emerge, which has dedicated itself to give voice to Tasmanian individuals and business owners who feel left behind by the island’s Internet deficiency.

The group, which has named itself Digital Tasmania, is made up of over 100 individuals, small businesses and entrepreneurs concerned with the state of broadband in Tasmania.

“In a way, Internode’s action has served as a catalyst to stir us into action,” said Digital Tasmania spokesperson Andrew Connor.

“Internode’s decision to cull broadband plans is a reflection of the high cost of backhaul and is illustrating that we are really stuck here with a backhaul problem.”

Although Connor sympathised with the rationalisation behind Internode’s Tasmanian sales cessation, he was unable to hide his disappointment at another ISP being forced out of the Apple Isle.

“It’s disappointing to see Internode do this but it is ultimately a reflection of the situation we as Tasmanians are in. The good element is that it may serve to prompt someone into real action on the matter.”

Internode managing director, Simon Hackett, said the decision was made reluctantly but would ultimately serve to protect service performance for existing customers.

“Unfortunately, the cost of bandwidth to Tasmania remains appalling, as often happens under monopoly situations,” he said.

“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,”

But while Internode has braced itself for a deluge of disappointed customers, a number of Internode customers have so far expressed support for the ISP on the popular broadband forum Whirlpool.

“It’s a pity that the 8 Mbit connections are, for the time being, getting discontinued,” wrote Whirlpool poster Artax. “But with all the issues with the late night latency issues I can understand it. Maybe if our (Tasmania’s) gov't stopped fretting about whether or not we can get an AFL team and concentrated more on getting the State up to speed with the rest of Australia, the high speed plans will be released back into Tasmania.”

Hackett further explained Internode’s decision in a number of postings on Whirlpool.

“The step we've taken right now is driven by exactly the sentiments expressed by various existing Tasmanian customers here on Whirlpool - that we need to look after existing customers as a priority ahead of connecting new ones, even if that financially disadvantages us in the long term and tends to send customers off to BigPond in the meantime,” he said.

“Right now, each time we upgrade the link, we are actually magnifying the amount of money we lose each month remaining in the Tasmanian market at all. The backhaul is so expensive that its actually a loss making proposition to be a national ISP right now and to keep servicing that state,” he said.

Meanwhile, in what might be seen as adding salt to the already wounded Tasmanian broadband landscape, Internode has announced it would carve $5 a month from the price of its rebadged range of 8 Mbps broadband plans.

From May 6, Internode ADSL Plus plans will now cost from $69.95 for an 8Mbps service with a five Gigabyte monthly download quota.

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