20 March 2002

SENATE ADJOURNMENT: Telstra Services

Senator LUNDY (Australian Capital Territory) (11.28 p.m.)

Mr Acting Deputy President Lightfoot, have you ever wondered why your Internet connection is so slow? If so, you are not the only one, because thousands of Australians share the same frustration. More often than not, the blame for slow Internet connections is levelled at ISPs, modems or computer configurations. However, recent evidence I extracted from Telstra at Senate estimates hearings has shed new light on the mysteries of the world wide wait. It is Telstra's fault. Telstra admitted to the extensive use of pair gain technology, which effectively splits a line into two or more lines. This has the effect of reducing Internet connection speeds, sometimes significantly.

The use of pair gains, according to Telstra, has the most common effect of reducing Internet connection speeds to around 26 kilobytes. `So what?' you ask. For Internet users who have bought a 56-kilobyte modem, this is half the speed that they were looking forward to. Far from advising customers of the physical constraints of this pair gain infrastructure, Telstra's response to consumer complaints about slow Internet connection speeds appears to be to aggressively reject responsibility and insinuate that ISPs or indeed the consumers themselves are responsible.

I would like to quote from one of the responses I have had to the web site survey that I have done on this issue. From Baulkham Hills, the author of this response wrote:

I previously had ADSL and could get speeds up to 56K (via modem) at my previous residence in Baulkam Hills. I then moved two streets round the corner (500 metres away) and lodged a Moving Home Telstra application form to relocate my existing phone service along with my Telstra ADSL service. My phone service was relocated to my new residence (along with the same phone number as before) but I was then told after I relocated that I couldn't get ADSL on the new line and that I could only manage speeds of 26K via a modem. I was, and still am, furious. I work in the IT industry and Internet access is critical to my own small business and to have a service taken away from me after I relocated 500 metres around the corner from where I previously lived )staying within the same Telstra exchange). I thought Telstra's policy was never to downgrade your service if you relocate. Well I have been downgraded to a level that is totally unacceptable. I was getting faster download speeds 5 years ago using a 14.4K modem when the Internet was just starting out in Australia. What can I do?

This is just one example of the close to 1,000 individual stories I have received from around Australia on this issue. It is no wonder that morale in Telstra is low amongst their employees. Telstra management prevent their employees—the techies and the help desk staff—from disclosing the existence of a pair gain, at least in the first instance. In estimates Telstra admitted that it is not policy to fess up and tell customers if they are in fact on a pair gain and that that could be the reason for their slow Internet connection speeds. To appreciate the extent of this farce and the incredible frustration felt by so many people it is worth exploring Telstra's motivation for using pair gain technology in the first place.

Public comments from Telstra to date shed some light, with Telstra spokespeople unequivocally citing cost cutting as the motivation. This would indicate that, as Telstra tidied up their books in preparation for privatisation in the mid-nineties, the company deliberately exploited ways in which they could maximise profits and minimise expenditure. Pair gain technology was perfect. There were minimal infrastructure costs but rent could be charged on a whole new line, and voila: maximum revenue generation. This has recently been reinforced once again as it has come to light that Telstra have again reduced their capital expenditure, saying that they will not make any investments unless they get a return on that investment within two quarters, or six months.

But there is another serious price being paid for Telstra's cost cutting. This pair gain arrangement prevents access to ADSL, a technology that allows a broadband type of service to be delivered across the existing copper network. This exposes, I think, as completely farcical the claims of the CEO, Ziggy Switkowski, that Telstra is committed to providing broadband. The use of various forms of pair gain technology by Telstra in pursuit of cost savings on infrastructure, building and maintenance has led to a barrier preventing many customers from being able to access ADSL. Not only are customers that are further away than 3.5 kilometres from an ADSL enabled exchange unable to access this service, but anyone on a pair gain cannot do so either. If Telstra cannot physically deliver this service then no-one else can. So, regardless of what line-sharing agreements or ACCC declarations are made, no-one else can get an ADSL service to those people; it is physically impossible.

There is, effectively, a category of Telstra customers that cannot get ADSL from Telstra or from anyone else. See if you keep this definition: firstly, if you are on an exchange that has not been upgraded to enable ADSL; secondly, if you are outside about a 3.5 kilometre radius of an exchange that has had that upgrade; thirdly, if you have a pair gain or are on another type of technology called a RIM network; and, fourthly, if you do not qualify for the extended zone subsidies for a satellite connection. If you fit any one of those categories then you are not able to access this service that Telstra is spending a lot of money advertising at the moment. There are people in metropolitan, regional and rural Australia affected by these descriptions. Just how many people there are, I do not know. I have asked these questions of Telstra in relation to pair gains. They are due to respond very soon and I look forward to their response. In the meantime, my pair gains victims web site has had an extraordinary response and I am pleased to inform the Senate that the Telecommunications Industry Ombudsman is taking a close look at this issue, as well as the ACCC.

Telstra's pitiful defence in all of this is that they provide a service specification, not a bandwidth specification. This means that, provided they do not promise a connection speed, they think it does not matter if they provide you with a connection that is physically incapable of providing more than, say, 14.4 kilobytes, 24 kilobytes or 28.8 kilobytes. Given that a voice connection only needs a maximum of 8 kilobytes, as I understand it, it seems that the degradation of bandwidth because of pair gains is only noticed when the line is used for a dial-up Internet connection and you can actually see the connection speed on your computer in the bottom right hand corner.

Maybe the market would not mind so much if Telstra did not make you pay through the nose for alternative solutions like ISDN, cable modem or satellite, which is what they pitch to disgruntled customers who complain about the lack of bandwidth or, in fact, have the good fortune to discover that the cause of it is indeed a pair gain. Again, I would like to read very briefly from a response that I received through my web site. This is correspondence that a consumer has received from Telstra. Telstra offered this person three other options when it was discovered that the consumer was unable to get ADSL, which were:

(1) You may try providing a different telephone number to see if it is capable of having an ADSL connection,

(2) you might try checking the availability for Big Pond cable, or

(3)you may apply for Big Pond satellite connection, which is an alternative broadband solution.

So, as you can see, Telstra is actually using that disgruntled-ness to pitch other more expensive services to customers that they have failed to deliver ADSL to because of pair gain technology. Clearly, as more and more Australians go online, this legacy of cost cutting by Telstra will be more and more exposed. Telstra have created a rod for their own back. Interestingly, they turn yet again to the coalition to get bailed out and the recently announced $50 million Internet Assistance Program is going to help Telstra reach a paltry minimum of 19.2 kilobytes connection speed. Taxpayers will be tipping another bucket load of money down the toilet to help Telstra keep providing inferior services.

Part of this program is a `self-help' site. This little number offers any number of reasons why you may not be able to achieve optimal speeds on your modem. But, you guessed it, the words `pair gain' cannot be found. So it seems the coalition is happy to support Telstra hiding the awful truth from its customers. This is not the first time Telstra has benefited from a grant from the coalition. There have been many, either directly or indirectly, under Networking the Nation and such programs.