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RealTime IT News

Lawsuits, Competition Chase Telstra's Broadband Efforts

The previously unassailable strength of the broadband cable network of dominant Australian telco Telstra has come under increasing pressure Monday with a law suit to open up its network from a potential datacasting rival.

The Seven Network, the second-ranked television station in the country, has made a legal challenge to open up Telstra's optic fibre network for Internet service providers - including Seven's own Internet subsidiary, i7. The request will be added to an existing case starting today in the Federal Court of Australia concerning pay television services.

The Telstra network, one of only two in Australia (the other owned by Cable & Wireless Optus), passes in front of over two million homes in Australian urban centres. Optus has only just added an Internet access product to its network, called Optus@Home, to compete with Telstra's Big Pond Advance product.

No other ISPs have been allowed to sell access over the networks previously but, unlike the U.S., there has been little agitation about the issue until now. Telstra is the largest ISP in the country, Optus the third largest, and number two OzEmail is the target of a current takeover bid by Telstra.

The process of opening up Telstra's infrastructure monopoly in Australia was advanced significantly last year when the Australian Competition and Consumer Commission, the pro-competition watchdog, "declared" the copper local loop telephony network last year so that telecommunications companies and ISPs could compete with Telstra on the much-vaunted "level playing field". The ACCC has not made any similar decisions on broadband cable Internet access as yet, although it has declared some pay television services.

At the same time, Telstra is proceeding with broadband alternatives to optic fibre, with its long-awaited trial of asymmetric digital subscriber line (ADSL) services in partnership with several of its wholesale Internet customers. Although Telstra has been "trialing" ADSL for years, it has only been since the ACCC declaration of the copper network - the same network which the ADSL services would use - that Telstra has made movements to actually roll out any DSL-based services.

Using Alcatel hardware, RSL COM, Optus, Primus, UUNet and Pacific Internet will participate in a trial which will involve about 100 wholesale and retail customers in Brisbane, Melbourne, Sydney, Toowoomba and Canberra, according to Telstra. The second phase of the trial will extend the service to a thousand customers "through the middle of 2000", with a mass market product to follow, the company said.