commentary Come July, the Federal Government will find out just how willing Australians, or at least Tasmanians, are to pay for 100Mbps download speeds.
Australia's third or perhaps fourth largest ISP, iiNet, last week shed light on the minimum price it hopes to charge for a 100Mbps download and 5Mbps upload service: AU$129.95 per month for an even-split peak/off-peak quota of 120GB.
If NBN Co Tasmania's plans go right, 5000 Tasmanian households will face the choice by July to either commit to $129.95 per month for super-fast broadband, or opt for a 25Mbps service for about half the price.
Given the government's selection of towns in Tasmania — Scottsdale, Smithton and Midway Point — it will be able to collect data on a variety of suburb types: two regional towns and one urban setting, Midway Point.
The question remains though: will those that have, at best, had ADSL speeds to date, be willing to pay double for speed? If so, what will they do to justify its cost?
ZDNet.com.au readers' steadily growing list of responses to iiNet's pricing indication were mixed.
The first comment, from an anonymous poster, was a definite no. "There is no way I'd pay $130 [per month] for the connection when I can get good ADSL speed for $60 [per month]," they wrote.
Another anonymous reader enthusiastically wrote "Sign me up". But it turned out he wanted to have his cake and eat it too. He was only willing to pay that amount for an "unlimited" quota, not iiNet's 120GB quota.
According to one source who works for an Australian ISP that has well over 100,000 broadband customers (not Exetel, by the way), that poster's response was typical of Australian consumers.
"Anything on offer for $50 per month will sell like hotcakes. The second sweet spot is $60. Anything bigger than that is an outlier," he said, echoing Linton's recent remarks about 100Mbps being as necessary as limb amputations.
As for those who are willing to pay the extra $60 for the option to use 100Mbps, for the most part they don't even use it, according to the source. Customers on the parts of its network that offer 100Mbps generally only "burst" to that speed. In other words, there's little out there that users can find to consume the available capacity.
The Australian Media and Communications Authority recently released figures on broadband consumption in Australia showing that very few Australians, even with the option of having speeds above the dismally slow 512Kbps, took up the option. My source pointed out that every single one of those customers on 512Kbps — about 15 per cent of Australia's 8.4 million broadband subscribers — could have opted for a 1.5Mbps service. But they didn't.
So if they weren't willing to pay for a service at 1.5 per cent of the speed that will be available under the NBN, why would they go for something that's 200 times faster?
TV of course.
I asked Interode's carrier relations manager John Lindsay what his thoughts were on Exetel Linton's recent remarks that people don't want speed, they want mobility.
Pointing to Internode's TiVo service, used by its customers to download TV programs, Lindsay's response was: "There is a segment that don't need a landline, but you shouldn't lose sight of the fact that there is a large segment who need high-speed, high-bandwidth, high-download broadband services. They are the people downloading media."
What about Tasmania? Are they using TiVo?
"What's a TiVo?" joked Digital Tasmania spokesperson Andrew Connor when asked about it. "I think when they launched TiVo Australia-wide they had it in Harvey Norman for a few days, but there was no supporting infrastructure for Tasmania, so it's not available down here [in that store]." He did say, however, that might change in the near future with the Hybrid SmartStreet project which provides participants with a TiVo box.
But awareness is low at the moment. So what are Tasmanians going to do with all this idle capacity if they are willing to pay for it?
Movies; $129.95 per month is around five high quality reproductions of a new release under Apple iTunes' pricing.
However, currently there's a lack of available legal content online. Internode's chief Simon Hackett recently said in response to Conroy's call for Hollywood and ISPs to kiss and make up after iiNet won the case brought against it by the Australian Federation Against Copyright Theft (AFACT): "ISPs in Australia would love to have their customers accessing a huge variety of legitimate AFACT member content legally and frequently over the internet in Australia on reasonable terms."
But for now they don't.