A local internet service provider has called for more transparency on internet speeds and says that the competition regulator needs to address the expensive cost of data transmission.
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Launtel CEO Damian Ivereigh says the price of data transmission has an impact on how speeds are advertised to consumers.
He argued some retailers could be skimping on the internet service they provide to Tasmania due to its costly nature.
The two issues come after the Australian Competition and Consumer Commission launched a discussion paper about unclear information regarding broadband performance advertising.
The competition regulator is currently taking public submissions to address how major service providers can provide greater transparency on internet speeds.
The cost of backhaul is a separate issue, set by the ACCC in April, these prices apply until December 2019.
Backhaul is the cost of transmitting data from one point to another, and is used by telecommunications companies to carry large volumes of data between locations where they do not have their own infrastructure.
Back in April, the ACCC noted that the risk and costs of providing services over the Bass Strait via Basslink had reflected on the pricing scheme.
Telstra and Basslink are the two providers of backhaul, and in order to be a national service provider retailers need to purchase data off the two.
National carriers have fixed retail prices across the country, however because of the varying cost of backhaul it can be more expensive in some places.
Mr Ivereigh runs his own independent service provider in Launceston.
He said that the cost of transmitting data to Tasmania is far too expensive, and believed that due to this high price some national carriers may not be purchasing enough backhaul to ensure that speeds remain acceptable.
He said if they don’t purchase enough backhaul there’s not space to carry the data, resulting in slow speeds during peak times.
Mr Ivereigh said the major retailers mislead on peak performance, and this can often result in customers feeling cheated that they didn’t get what they paid for.
“You buy a 100Mpbs speed plan on the NBN, you connect it up and you’re only getting 40Mpbs, and at 3pm it will slow down to 5mpbs,” he said.
Telstra Tasmania area general manager Michael Patterson has previously said that he will be considering the issues put forward in the ACCC’s discussion paper on internet speeds and provide a submission next month.
A spokesman for Telstra said Australia’s data transmission market is already intensely dynamic and competitive.
“Wholesale customers are benefiting from both competitive prices and ongoing investment and innovation in the market,” they said.
Optus was contacted for comment on a Sunday.
The ACCC is also undertaking a market study on competition and efficiency in communications markets.
