The lack of choice in broadband plans in Tasmania, caused by delays to the Basslink fibre optic cable, is hitting small business in the state hard.
Although the Tasmanian government is paying AU$2 million dollars a year for access to the Basslink cable — a high speed fibre optic link between the state and Victoria — the money remains idle as would-be reseller Aurora Energy is still in negotiations with the cable's current owner, CitySpring, over access terms.
While the delays continue, Tasmania's only cable access comes by via Telstra. According to ISP Internode, rival telcos have to pay prohibitive prices to use the telco's infrastructure — which has forced it to stop offering new customers its 8Mbps plans although existing customers can still access their usual speeds.
The price of sending data from Melbourne to Hobart costs six times as much as moving data between Melbourne and the United states, according to the ISP.
"Unfortunately, the cost of bandwidth to Tasmania remains appalling, as often happens under monopoly situations," Internode MD Simon Hackett said in a statement.
Gary Price, event producer for Tasmanian SME the Grange Conference and Meeting Centre, said his business has lost out due to the broadband situation.
In his original business plan, he had laid out that the Centre would have high speed Internet and two-way video conferencing. However, Price has since found out that to get the speeds he wanted, a 4Mbps symmetrical connection, he would have to spend around AU$2,500 per month — a price not commercially viable for the business.
Price said he spent a lot of money on the new complex, and has now lost the ability to offer an important service due to the Basslink delays. "We are in a rural environment, so we have to grit our teeth sometimes and bear it," he said.
Price fears that as companies such as Internode pull out of high speed plans, the centre may never be able to afford the capacity to run two-way video conferencing.
Consumer action group Digital Tasmania, which has been set up to "get Basslink going", has been approached by a large number of small businesses which say fast and affordable broadband is essential for their business, according to a spokesperson for the organisation. Tasmania is "missing out on a lot of opportunities," the spokesperson added, as small businesses become "hamstrung by high costs".
"The lack of choice in ADSL2+ services in Tasmania is a direct result of this state government's inability to get Basslink going," the spokesperson continued.
Telecommunications analyst Paul Budde said the state government needs to get the situation sorted after years of talking. "If they sit on it much longer they can take it to the scrapheap," he said.
Budde believes the productivity and efficiency gains from high-speed connectivity could reach AU$600 million for the state, including national e-health and energy initiatives dependent on high-speed broadband.