International capacity should be invested in by the Australian government

Recent comments from the CEO of broadband network operator, Pacnet advised that international carriage competition is something that Australia is currently lacking, although something can be done by the government to change this.

The recent rise in video consumption throughout the country has led to a massive increase in the need for network capacity and Bill Barney, the CEO for Pacnet advised that this is something that the Australian government could use in order to increase national competition.

He advised that by building an Australia to US cable connection, which would cost a fraction of the current cost of the NBN, the government would be able to stimulate competition between the various broadband network operators throughout Australia and if a new cable consortium were to be created over the next few years, Pacnet might even consider joining he added.

Mr Barney advised “You need four or five on any given route to get yourself a competitive environment. Maybe Pipe [with PPC-1] supplies some of that, but I think you probably need one or two more cables coming out.”

He went on to add that carriage prices in Australia could drop by as much as 90 percent and would allow it to compete with areas in Asia if the government did decide to create this $300 – $400 million cable. He said “Government should look at it, to invest in a cable – I think that would drive rational economics and I think it would have as big an impact on broadband users, in terms of cost structure and performance, as building out fibre to the home – and it would be a much less expensive way of doing it.”

It is possible that if this cable is built, Pacnet may be interested in taking a stake in it over the coming years even though it previously advise that it would not be interested in getting involved.

Source – Commsday.com