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 [email protected], 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
, 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.

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