A fairytale about Telstra and net neutrality

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Dan Warne27 July 2006, 6:41 AM

Once upon a time there was a big fat telco called Telstra. King Solomon ruled the villagers with an iron fist. Then, one day, the villagers heard about VoIP and were set free of the tyranny of long distance. Calls were cheap and all was well, until one day ...


Most of the below is fiction for the sake of illustrating a point. Don't read it as a hard-news report. Serving suggestion only; may contain traces of nuts.

Once upon a time there was a huge Australian telco called Telstra. It launched its own Voice over IP service which was lauded far and wide for its excellent sound quality, but users said it was overpriced compared to other VoIP providers.

It then emerged that people were having major problems with glitching and dropouts on Engin and MyNetFone.

Telstra admitted that it had 'rebalanced its network' to give priority to Telstra VoIP calls, while other providers' data would have to to wait in line with all the BitTorrent data packets.

A month or so later, a Voice over IP industry body announced that ongoing analysis had shown that VoIP calls from all providers except Telstra had dropped in quality significantly. Telstra was forced to admit that it had been actively deprioritising other VoIP providers' data.

"This is another case of our competitors trying to piggyback on our network and steal Telstra shareholders' profits," a Telstra spokesman said.

"If they want to run VoIP calls over broadband, why don't they factor in the true costs of providing a high quality network and build their own? Could it be because they realise they are getting a fantastic deal on Telstra's network?"

"The Telstra ADSL network is for Telstra use. I don't know how I can be any clearer than that," said a senior Telstra executive.

Telstra then offered other VoIP providers the opportunity to have their data prioritised on the Telstra network too, at a cost of $19.50 per user per month (coincidentally, the same price as the basic Telstra landline line rental.)

Suddenly, Telstra's VoIP and landline pricing seemed like a much better deal and Telstra announced record sales growth. Other VoIP providers were outraged and demanded an ACCC investigation.

The competition regulator determined that while current legislation didn't cover the priority of data packets transmitted on networks, Telstra had used its monopoly position to disadvantage other players.

After two years of legal battles, it settled with Telstra, charging them a $450,000 fine; a small fraction of the profit Telstra had generated from its VoIP service.

And King Solomon ruled again.

The end.



We're lucky that's merely a mid-afternoon daydream about what could happen if Telstra takes an aggressive stance on net neutrality. But does any of it sound familiar? Fortunately, Telstra doesn't seem to have yet plumbed the same sort of deplorable depths it reached with its ADSL wholesale (and later, fibre-to-the-node) rhetoric.But it is already preparing its case around net neutrality.

The message from Telstra's Chief Technologist, Hugh Bradlow, is that there really is no change; users need not worry.

Bradlow wrote about the topic on Telstra's corporate propaganda site, nowwearetalking.

Across two articles, Bradlow repeatedly says the technical aspects of Telstra's possible implementation are "too complicated to explain here", but a close read of both articles suggests that Telstra is considering using reserved bandwidth on top of what's already available for broadband internet for delivery of its broadband voice and video offerings.

"Why the fuss?" writes Bradlow.

Well there are 2 common misconceptions that fuel this debate. The first is that people buy a 'broadband service' which is a fallacy. They buy an Internet service, and a TV service, and a telephone service, which are distinctly different things. Today there is no debate because they are delivered over different networks but in the future they will come through one broadband pipe into the home.

The second misconception is the illogical conclusion that offering QoS on the broadband pipe to those services that need it, is the same as 'throttling' other services. That makes no sense because, as I have said, the high speed Internet service is not changed by this proposal.

Telstra appears to be gearing up to offer broadband internet at a fraction of the possible maximum speed offered by whatever broadband network they ultimately deploy, while reserving bandwidth for their own proprietary services on top of that.

Now that does sound familiar... hence why most ADSL users are still stuck on a top speed of 1.5Mbit/s via Telstra wholesale despite the 8Mbit/s maximum speed.

And do you think other VoIP or IP-video operators will be able to access any of that reserved bandwidth? I'd say not bloody likely!

Telstra's plans for a new high speed broadband network are still under negotiation with the ACCC. There's been no agreement that we know about, so none of the details about what competitors will be able to access have come out yet.

But we do know Telstra made ADSL1 available at a fraction of the full speed that it is capable, and now Telstra's chief technologist is hinting that Telstra might offer part of the network link for internet (which may be available at wholesale) and reserve the rest for its own use (which almost certainly will not be available at wholesale).

Hoping for access to high speed broadband over Telstra's national network, through an ISP of your choice, with free choice of VoIP and video provider at high sound/video quality?

I'd say that'll be the real fairytale if Telstra gets its way.


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steve allan:

Loosely translated … a corporate pig in association with a government parasite riding roughshod over Australian small business to screw the populace at large

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

halcon:

So the monopolists want to disadvantage the competition? this is one of the results of this arrogant government who want to sell the company, so we will pay more for an inadecuate service!

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

Tim Gaden:

This is outrageous. What's Helen Coonan's position on Telstra's naked grab to exploit its favoured historical position?

Where is the nation's telco Fairy Godmother and protector?

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

Frinky:

...

really stupid artical...

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

Peter:

lets buy back telstra (it is cheap now)that gov is debt free and split it to infrastructure and retail sell retail and make infrastructure run as for non profit and all money earned put back into coper /fiber .

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

somebody:

The country is NOT out of debt at all. That is a fallacy. Different sources claim that australia is between $509.6 billion & $473 billion dollars in debt now.

What would be better is to replace copper with fibre optic (copper wire is a HELL of a lot more expensive than fibre optic, so you'd sell the copper metal from the wiring that you are replacing) and use that as fibre-to-home in built up areas and also for point-to-point for a nationwide wimax deployment, and have that be owned by a non-profit regulatory body.

This would mean that the only role for a third party ISP in australia would be to provide a gateway to the rest of the 'net.

There. Net neutrality. The network is a tool. A platform for tohers to use to innovate and create business. It is not a business in-and-of-itself. OR at least i believe that it shouldn't be.

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

Martin Sinclair:

The Telstra shareholders and I thank you for this monopolatastical idea.

The big wigs at Telstra are probably rubbing their hands together at the thought of firing all of Telstra's corporate strategists in favour of an APC blog.

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

john smith:

Very interesting article. There is no doubt that the american management of Telstra are continually thinking of ways to eliminate their competition in favor of a return to their publically funded monopoly.

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

paul:

It is functioning the same way as any other big coporation. Look at the retail sector, big fish eat little fish, people don't care if the corner shop dies, and they don't care if the small ISPs die, Optus doesn't care either. One less competitor for Telstra is one less for Optus/iiNet etc. And as Telstra is technically the owner/maintainer of the cable, we are stuffed. There is a separation plan that has been approved and Telstra will be split into wholesale and retail, but it still costs a bucket to maintain the network and so I expect wholesale prices to rise and there is no retail income to prop up wholesale.

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

Ilkka Tales:

The foundation of the internet is built on trust. We buy and sell products and services, we do our banking online, we communicate and make decisions based on information we access on the internet on a daily basis.

All this happens because we trust the internet to deliver our data unimpeded and undistorted.

For the majority of Australians our trusted data is (hopefully) carried by the telecommunications carriers unimpeeded.

Any organisation that changes the basic foundation of the internet will profoundly affect the trust Australians have placed on the internet.

Power to the people.

Ilkka Tales
CEO
engin.com.au

(I do have a vested interest in this topic and please take my views in light of this, but I do truly believe this is an
issue that has profound effects on all Australians.)

29 February 2008, 8:28 PM (8 months ago)report abuse Send to a friend reply

Joshk:

Its annoying to think that although Telstra did not create the internet, they are considering fundamental changes to it's use and existence. From a corporate point of view its the right thing to do though, so its up to Helen Coonan to realise the monster that the government has created and make the changes to ensure the net remains neutral. Unfortunately conflicting interests may prevent her from doing this until it's too late.

(I am on heavy pain killers at the moment so please take my view in light of this, especially if they don't make sense :D )

29 February 2008, 8:28 PM (8 months ago)report abuse