Local broadband charges ‘ridiculous’

Local broadband charges ‘ridiculous’ By Pete Young <http://www.thestandard.com.au/articles/display/0,1449,14696,00.html?ts>

Web-hosting king Lloyd Ernst says the “horrendous” broadband pricing regime is choking attempts to create a Knowledge Nation. To unplug the roadblock, the data equivalent of local call voice charges should be brought in, he says. Ernst, who is the CEO of WebCentral, Australia’s largest web-hosting company, claims that broadband costs here remain 10 times higher than in the US.

WebCentral claims to serve more than one billion web pages a month to 35,000 corporate and individual customers, more than three times the size of Telstra’s web-hosting business. It also says it has the largest cluster of Windows 2000 and Windows NT servers in the southern hemisphere.

WebCentral has just committed $35 million over the next four years to expand its Australian data centre from 850 servers to 5000. Yet the “ridiculous” cost of bandwidth remains the single largest issue hampering efforts to drive data to consumers, says Ernst.

“We need to be doing more to get broadband access to more Australian businesses more cost-effectively. We had hoped we would have seen some changes in billing models with the arrival of new players under the deregulated telecomms system ? but it hasn’t happened.”

Selecting megabytes of data sent as the billing basis has boomeranged on content providers, Ernst argues. “It is really inhibiting their development. They say they don’t want to build broadband content because it is too expensive to host.”

On top of that, “Now you have the major carrier applying a three gigabyte cap to its broadband customers. So now it is not only expensive for content developers to host their content but barriers are being put in the way of the consumers they hope will access it.

“It is plain crazy. We would like to see a different pricing structure for companies like WebCentral, which drive data into domestic broadband networks.”

That could be accomplished by distinguishing domestic content from overseas data, in much the same way as local voice calls attract a different tariff than overseas calls.

“At the moment, all the data we deliver domestically is subsidising the delivery of information to and from international sources. We would like to see local data sent to Australian consumers at a price that is close to free,” Ernst says.

“I appreciate it costs money to send data to the US and I am happy to pay for that. But there should be a differentiation between local and domestic data and it would have to be driven by Telstra because nobody else has that sort of grunt.”

Neither political party is addressing the issue and Ernst says he sees “very little chance” of his suggestions being acted on. “As a company we are investigating some options but we have very few resources to draw on.”

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