news The nation’s largest telco Telstra has claimed in a submission to the competition regulator that it can’t deploy naked DSL broadband services to customers and other ISPs as doing so would require it to undertake significant development of its IT systems, which require a phone line to be connected before broadband can be provided.
A number of Telstra’s major rivals, such as iiNet and TPG, have sold so-called ‘naked DSL’ services, where ADSL broadband is provided to customers without the requirements of a bundled traditional PSTN telephone line, for half a decade. iiNet, for example, first launched naked DSL to customers in November 2007, and had 131,000 customers using the service in June last year. Many of iiNet’s customers bundle cheap IP telephony services with its naked DSL platform. However, Telstra has consistently declined to provide the service to customers, preferring instead to sell bundled services including monthly traditional PSTN line rental plans, which are typically more expensive than IP telephony options.
The Australian Competition and Consumer Commission is currently examining the case for stronger regulation of the way in which Telstra provides wholesale ADSL services to retail ISPs such as iiNet, TPG and Optus. In a submission (PDF) to that process released last week (and first reported by iTNews), Telstra argued that the ACCC should not force is to provide new services such as a wholesale version of naked DSL.
“Telstra relies on the presence of an underlying active PSTN service for the ordering, assurance and provisioning of its ADSL products,” the telco wrote. “It is a technical requirement of Telstra’s OSS and BSS systems that ADSL services require an active PSTN service on the copper line. As such, a requirement to provide Naked ADSL services would require Telstra to undertake significant systems development and process changes … Telstra provides ADSL services to both retail and wholesale customers as a product provided on top of PSTN services,” Telstra wrote. “In this way, ADSL services are analogous to long distance calling services or messaging services.”
The telco added that this requirement of linking ADSL services to traditional PSTN telephone services was not a bundling construct — a product choice — but instead “a fundamental aspect of how Telstra has deployed ADSL technology on its network”, being “integral to how Telstra provides these services”.
Telstra argued that the ACCC did not have the power to require it to provide a wholesale naked DSL service to customers, as the telco did not sell naked DSL to its own retail customers. Companies such as iiNet use component parts of Telstra’s wholesale service to construct a naked DSL service to customers, but do not actually resell a naked DSL service per se as provided from Telstra.
” … it is unclear that access seekers (or end users) would benefit from the requirement to make such a service available,” wrote Telstra with respect to a wholesale naked DSL service. “Telstra considers that the existing options available to access seekers through the provision of Telstra supplied WDSL services, as well as ULLS and LSS-based ADSL services (either self-supplied, or acquired from other WDSL suppliers) provide access seekers with a wide choice for the delivery of ADSL services to end users. It is unclear that a requirement for Telstra to develop a new service would significantly increase the competitive options available to access seekers, or end users.”
“Given these uncertain benefits, it is unreasonable to require Telstra to undertake the significant technical and process developments required to enable the provision of Naked ADSL services on its network,” Telstra wrote. “More importantly, if Telstra were required to divert operational resources, engineering funding and management oversight to develop new Naked ADSL services, or to reengineer the ADSL network, it may impair the management of the NBN migration and its progress on the development of NBN-based services.”
Despite its unwillingness to modify its systems to sell either retail or wholesale naked DSL services, Telstra has actually conducted a trial in the past of naked DSL services on its network. The company kicked off a trial of naked DSL services in early June 2010, stating that it would conduct a two-year pilot of the services. However, the trial was quickly canned in October the following year, with the telco confirming it would not launch naked DSL as a commercial service.
It is believed that Telstra did not modify its IT systems to handle naked DSL during the trial, but instead applied billing credits to customers on the trial to cover the cost of their PSTN telephone service, in a manual process.
Telstra has recently undergone significant change with respect to its OSS and BSS systems. In 2006, for example, telecommunications publication Light Reading reported the company was involved in a massive overhaul of the IT platforms which would cost between $300 million and $400 million, cutting out more than 1,000 existing software systems along the way and utilising the services of technology providers such as Amdocs, IBM and Accenture. It is not clear why Telstra was not able to integrate services such as naked DSL during this revamp.
It’s hard not to laugh whenever you hear the latest excuses from Telstra on why it remains unable to launch naked DSL services, despite the fact that almost every other significant ISP and telco in Australia has done so, and despite the fact that it’s just been through a significant reworking of its OSS/BSS systems.
Perhaps the most hilarious aspect of Telstra’s ongoing debacle in this area is the fact that when Telstra launched fibre broadband services over the NBN, it required customers signing up for the services to continue to have a bundled copper telephone line connected to their premise as well. When you’ve got fibre, you shouldn’t need copper cable for anything. But with Telstra, it appears that you do. Absolute lunacy — but that is sometimes what passes for normal reality inside Telstra.
The fact is that if Telstra really wanted to launch naked DSL, it could do so. It could do so very quickly. It would require some re-architecting of its OSS and BSS IT systems, but that could be done, over the period of perhaps several years.
And another fact is that eventually Telstra will be eventually forced to do this anyway. When the NBN is rolled out, Telstra’s copper network will be disconnected. There will be no PSTN line to associate a customer’s account with. There will be no traditional phone line. There will only be a fibre connection. And Telstra’s billing system will need to handle this. With this in mind, Telstra had better get its IT systems sorted shortly. Because if it is still requiring customers in another half-decade to keep a copper telephone line connected, despite the fact that most people will have fibre, it will be the laughing stock of the global telecommunications industry.