Neowin.net

AUSTRALIA faces an explosion in broadband internet access as Telstra slashes prices and a host of new providers prepare to launch services.

Telstra has cut its wholesale price for high-speed ADSL (asymmetric digital subscriber line) services by 30 per cent under pressure from the Australian Competition and Consumer Commission.
In the past few days, at least two companies have joined the swelling ranks of residential broadband internet providers. And several other providers, including OzEmail, are planning to offer high-speed ADSL services soon.

Telstra's cuts to its wholesale ADSL pricing will mean cheaper access for residential and businesses users, and for the first time regional Australians will have a choice of broadband providers.

At the same time, Telstra is testing technology that allows competitors to offer a more diverse range of services over its copper wires.

News source: Australian IT

Earlier this year, the ACCC tackled Telstra on a number of broadband issues, which culminated in a competition notice demanding that Telstra address the closeness of its retail and wholesale ADSL pricing or face fines worth millions of dollars.

The notice expired last Friday, but the ACCC agreed to extend the deadline until March, as it was reasonably happy with the ADSL price reduction.

In addition to the wholesale pricing, Telstra has started trials of spectrum sharing, which allows other ADSL infrastructure providers, such as Optus's XYZed and RequestDSL, to access the last mile of copper wire without bearing the burden of a new phone line.

Telstra has also launched a layer 2 ADSL product to allow resellers to differentiate their product from Telstra's by providing end-to-end connectivity.

ACCC chairman Allan Fels agreed Telstra's actions represented a change in the telecommunications industry.

"We want to acknowledge they have moved some way on this," Professor Fels said.

But, he said, some aspects of the new prices, and issues such as layer 2 access, would continue to be monitored until the March deadline.

So far three companies had agreed to the new pricing structure, and a Telstra spokesman said another six companies were close to signing. OzEmail chief executive Justin Milne confirmed his company was close to clinching a deal that would allow it to offer ADSL to its customers.

"We are part-way through discussions with Telstra on pricing and on the architecture of the network," Mr Milne said.

"Nothing has been signed, but we are expecting a positive outcome."

South Australian Agile Communications' technical director Simon Hackett said his company had already signed off on the new pricing, and would begin to offer residential ADSL shortly.

Another ISP, Netspace, launched residential ADSL on Thursday after reaching agreement with Telstra.

"This is as important as the rise of modem-based communications. We will look back on this time as the beginning of the death of the traditional modem," Mr Hackett said.

Victorian ISP Internex has offered residential DSL since May, but founder Greg Holloway said the new prices allowed a more competitive product.

"We can cover the whole state much cheaper than we could before. It's a big bonus for the bush," Mr Holloway said.

But DSL infrastructure company RequestDSL was concerned that Telstra being forced to cut its ADSL wholesale prices further could put pressure on DSL network operators and discourage investment in competing networks.

Michael Johannessen of NEC-backed NEXTEP said he was happy with Telstra's actions, particularly on spectrum sharing, despite concern that the pressure on it to cut wholesale prices further could create difficulties for competing operators.

"It's probably the first time in the world that a carrier has seriously and completely unbundled its copper pairs without getting into court," Mr Johannessen said.