The Internet Industry Association has warned that a lack of intra-industry understanding is keeping bandwidth bottlenecks locked and allowing the implementation of politically-driven broadband solutions that will exacerbate data cost issues for the country’s ISPs.

Currently working towards a policy position on international capacity restraints and the invigoration of a local digital content sector, the IIA has called for greater industry debate and participation. While some of the underlying issues appear clear, IIA CEO Peter Coroneos says that more precise information is required.

“We are looking at the underlying determinants of bandwidth costs to see if anything can be done on a national level to alleviate a future bandwidth ‘crunch’ and to bring down the total cost of data that Australians currently pay for,” Coroneos said. “However, we need better information from the content and carriage sectors in Australia on these questions.”

The key question in the IIA’s investigation is why Australia has data caps and usage charges when other countries don’t? The obvious answer is lacking international capacity that affects domestic pricing but Coroneos says that there are more complex factors, including flow-on constraints  in the content sector, at play.

Coroneos also warns that faster broadband speeds now being promised out of Canberra will only exacerbate the problem. “Yes, faster speeds will increase the propensity to consume so that data cost will become highly problematic without a resolution to the underlying cost issues,” he said.

While insisting that the IIA isn’t looking for a legal solution to bandwidth issues, contrary to actions in Japan where regulators are setting guidelines for providers to curb heavy bandwidth consumers, Coroneos says a “favourable legal environment” will be an essential foil to more competitive costs in the future market. He says the combination would increase the amount of locally-hosted content and decrease demand for international traffic, while improving Australia’s bargaining position in relation to peering from offshore networks.

The IIA’s call for industry input on market stimulation comes as an increasing number of ISPs implement their own solutions to high data costs. Across the industry providers have moved to charge more for larger download blocks while companies such as Westnet and Exetel have implemented technical solutions to discourage P2P enthusiasts.

According to Coroneos, the IIA is seeking solutions that encourage bandwidth use but make it more economic for providers. “We think it may be possible to create better incentives to invest in bottleneck international capacity to increase competition or obtain a more favourable return relative to risk,” he said. “Bandwidth has to be affordable - otherwise the question of better and faster access speeds becomes academic.”