[LINK] Local broadband charges 'ridiculous'

jeff.evans@dsd.vic.gov.au jeff.evans@dsd.vic.gov.au
Fri, 6 Jul 2001 14:09:01 +1100

Local broadband charges 'ridiculous'  By Pete Young

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."