"If the Basslink were to come on as an alternative, it would remove a serious hurdle for our expansion into the area," he said.

Although Dunscombe conceded that the expense was part and parcel of doing business in Tasmania, he feared the high costs would have a detrimental effect on the future development of next-generation broadband technologies.

"Telstra have a complete monopoly on bandwidth in and out of Tasmania and it's threatening to strangle the prospect of ADSL2 and other technologies in the future," he said.

Both ISPs are counting on the opening of the Basslink to alleviate Telstra's costs.

"We would love for Telstra to come to the table and discuss, but we're not at all hopeful of it," Dunscombe said. "We think the real solution will come through the opening of Basslink."