IIA warns of potential broadband cost crunch

The Internet Industry Association (IIA) warns that unless Australia addresses its international capacity issues, its use of high speed
broadband networks could become cost-prohibitive.

Peter Coroneos chief executive at IIA said promises from political parties to deliver faster services, while welcome, may have the perverse effect of bringing Australia’s international capacity constraints to a head sooner rather than later.

"There's no point having a fast car if you can't afford the fuel.
Broadband is the same," said Coroneos. "The IIA has championed the need for faster broadband services, including setting national targets for 2010."

According to Coroneos without better competition and investment in international links, emerging uses of the internet may remain out of reach, even though Australia will have the speed to access them.

"After speed, capacity is the next big issue. It will determine the
affordability of services. In turn, this will determine the uptake and
usage of advanced broadband based services such health, advanced
education, financial services, video communications, software on demand, environmental analysis, media and entertainment to name a few," he said.

Coroneos explained that Australia is worse off than other advanced
economies.

"By virtue of our isolation, the limited number of cables connecting us to the global internet and the proportion of content we source from overseas, we face much higher costs in international traffic. Other nations are much better serviced which is why 'data caps' and 'excess usage' charges are almost uniquely Australian," he said.

"These restrictions, which we fully understand are the result of current conditions, are ultimately anathema to being a connected Australia," said Coroneos.

Productivity enhancing information services in a 21st century knowledge based economy and our cultural, social and economic engagement in the global Internet will suffer if Australia doesn't get the capacity question right.

"Our current data situation is like having only three or four airlines
servicing our international routes, or three or four shipping services
moving imports and exports. We might have abundant domestic transport
systems, but if the bottleneck is on overseas access, we'll remain
isolated," he said.

Much of the problem stems from the fact that most of the content
Australians currently access is currently from overseas. For example,
most English language internet content is not found here.

"We need policies to encourage building more high-capacity undersea data pipes to major international hubs," said Coroneos. "We also need policies to encourage more content to be hosted in Australia. Our 'balance of data' deficit is a significant determinant of the price we pay for international access. Most Australians would not realise this."

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