Australian Telco Has Lost The Plot

News Posted 28/11/2006
Author: PV5150
Source: The Sydney Morning Herald

Australia’s largest ISP and Telco – Telstra, has lost the plot! Telstra BigPond group managing director Justin Milne last week forecast a change in the structure of the internet in a speech to the Media and Broadcasting Congress in Sydney – in future, telcos would prioritise network traffic to guarantee service standards, which could leave internet-based telcos such as Skype “without a business model”.

Why should telcos build billion-dollar networks for the benefit of internet rivals who piggyback the system – with no incremental benefit to the telco, he asked? “What net neutrality is all about is the day of reckoning, when networks will have to charge the purveyors of the content.”

Argument is raging over this issue in the US, where Congress and the Senate are debating bills to allow or prevent such a change. Opponents claim that favouring some applications over others – for instance, video over the web – could hamper innovation, fragment the internet and give big corporate content providers an advantage over smaller netizens.

Some Australian ISPs already offer different levels of service depending on what applications a user runs. Last month Exetel started shaping traffic from peer-to-peer applications such as BitTorrent. In a letter to customers posted on its user forum, Exetel said it would restrict P2P traffic to about 50 per cent of its maximum speed, “to retain the current low prices and high download allowances for all users”.

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