Local broadband charges 'ridiculous'

Web-hosting king Lloyd Ernst says the "horrendous" broadband pricing regime is choking attempts to create a KnowledgeNation.

To unplug the roadblock, the data equivalent of local call voice charges should be brought in, he says. Ernst, who isthe CEO of WebCentral, Australia's largest web-hosting company, claims that broadband costs here remain 10 timeshigher than in the US.

WebCentral claims to serve more than one billion web pages a month to 35,000 corporate and individual customers, morethan three times the size of Telstra's web-hosting business. It also says it has the largest cluster of Windows 2000and 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 850servers to 5000. Yet the "ridiculous" cost of bandwidth remains the single largest issue hampering efforts to drivedata to consumers, says Ernst.

"We need to be doing more to get broadband access to more Australian businesses more cost-effectively. We had hopedwe would have seen some changes in billing models with the arrival of new players under the deregulated telecommssystem, but it hasn't happened."

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

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

"It is plain crazy. We would like to see a different pricing structure for companies like WebCentral, which drivedata into domestic broadband networks."

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

"At the moment, all the data we deliver domestically is subsidising the delivery of information to and frominternational sources. We would like to see local data sent to Australian consumers at a price that is close tofree," 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 adifferentiation between local and domestic data and it would have to be driven by Telstra because nobody else hasthat sort of grunt."

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

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