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Outram Charitable Trust treasurer Tim Gibson said the situation was ridiculous.
''During the evenings at 7pm, it's barely above one megabyte per second.
''You might be able to watch a very low quality Youtube video, but nothing else.''
Similar concerns were expressed about internet service in Karitane last week.
The trust had begun a petition asking parliament to intervene to ensure Outram is included as an area scheduled for upgrades.
Mr Gibson said the town's residents could choose to sign up for rural wireless broadband which ran on a different network and was unlikely to slow down at peak times.
However, Mr Gibson said the best plan on offer was insufficient.
''Ninety bucks a month for 15 gigs of data is quite prohibitive for families.''
More content was available online, such as TVNZ on demand, but with the data cap, these services would not be available in Outram, Mr Gibson said.
Outram's central exchange point required upgrading to make the new VDSL broadband network available to residents.
Mr Gibson said that would make the internet 20-30 times faster for homes within 800m of the town's centre.
If an upgrade did not happen, Outram would be left behind.
''We're not going to have any new businesses coming out, so there won't be any new money coming into the community.''
The petition is supported by Dunedin South Labour MP Clare Curran, who recently emailed Chorus to ask why Outram was excluded from areas to be upgraded.
She said Chorus responded there were no plans to upgrade the exchange at Outram, as it ''cannot currently justify the investment''.
Ms Curran said she rejected that.
''It's not really a business case. It's actually a state-funded programme.''
''We want people to set up businesses there.
''We want people to stay there and not have to move away, but if we can't provide the digital infrastructure, then what choice do they have?''
Chorus corporate affairs manager Ian Bonnar last week confirmed there were no plans to lay ultrafast fibre cable or to upgrade the central exchange point.
Reece Warnock, director of Warnock Architecture, said a digital upgrade for Outram should be a priority for the Government because of the town's rural location.
''We're a little more isolated, so we are relying on the internet to reach our clients.
''We have a staff member who works from London, and we send them architectural drawings that are 70Mb each.
''I'm picking anywhere between 30 minutes to an hour waiting for those files.''
Petition sheets can be signed at Outram library, Challenge petrol station, Outram Butchery and Outram Hotel.
- Robert Steven
• Standard broadband
• Rural wireless broadband
Being upgraded elsewhere
• VDSL broadband
• Ultrafast fibre-optic broadband