Tasmania may have been the first state in Australia to receive NBN services but customers there have a limited choice of service providers, thanks to the cost of getting data traffic across Bass Strait.
An NBN customer in Hobart has a choice of 13 retail service providers, whereas a customer in Kiama in NSW has a choice of 45, according to the NBN Co website.
The NBN is being built with 121 points of interconnect (PoIs). Retail service providers must deliver their traffic to the PoI, connecting each customer they want to serve. It is not economically feasible for them to connect to every PoI so they use intermediaries.
NBN Co has PoIs in Hobart and Launceston, but there are only two means of getting traffic to these: fibre-optic cables across Bass Strait owned by Telstra and Basslink. Service providers say the prices charged are prohibitive.
Andrew Connor, a spokesman for consumer lobby group Digital Tasmania, said Tasmanians were "missing out on the innovation that smaller players have generally provided to the Tasmanian market. Adding Tasmania to some national contracts offered to small service providers [by intermediaries] doubles the cost."
Rob Appel, chief executive of ISP AusBBS, uses the services of Nextgen and AAPT to reach NBN customers, but neither of these at present serves PoIs in Tasmania.
"We simply can't offer services at all in Tasmania unless we go through a provider who is down there ... but the more aggregators we have, the more complicated the whole offering becomes," he said.
ISP Exetel says bandwidth cost from Tasmania to Melbourne is "50 to 100 times more expensive" than from Brisbane to Perth.
Prices for capacity across Bass Strait are set by the ACCC. It says they should be no more than 40 per cent above the price for similar mainland distances.
See the full story at theage.com.au/it-pro