Exchange students learn the taste of defeat

Exchange students learn the taste of defeat

Summary: We've all experienced that irritating feeling upon walking into a nearly empty restaurant, only to see little 'reserved' signs on the empty tables, and to be told by the maître d' that no tables are available even as other people enter and are escorted to their tables.


We've all experienced that irritating feeling upon walking into a nearly empty restaurant, only to see little 'reserved' signs on the empty tables, and to be told by the maître d' that no tables are available even as other people enter and are escorted to their tables.

Hasn't happened to you? Perhaps I'm just scruffier than you are. But just stay with me here.

Now, imagine that restaurant is the only one in town. If you want to eat, you either build your own restaurant, or you just order takeaway and sidle down the street to eat your food while sitting on the kerb — Styrofoam container on your lap, bottle of drink wedged between your feet so it doesn't spill. All the time, you stare resentfully at the restaurant filled with empty tables, and wonder how they get away with it.

This is pretty much what's been happening for years to Australia's telecommunications carriers-other-than-Telstra, who have tried with varying degrees of success to access telecommunications exchanges so they can install equipment to offer ADSL2+ and other services.

By all accounts, the process is about as enjoyable as repeatedly slamming your head against a brick wall. Requests for access are variously met with claims that a particular exchange has no more connections available, that there is a queue for access, that technicians can only get into the exchange to service their own equipment for 10 minutes every third Thursday.

Without access to exchanges, there is no ADSL. Companies that complain about the situation are told they should invest in their own equipment — but an exchange is hardly a piece of equipment. Exchanges were built by the government and enjoy a long-running leasehold on prime real estate, inextricably rooted into the neighbouring community with fibre-optic and copper lines running to every property within a radius of around 5km.

To suggest that competitors build their own exchanges is like telling drivers that they should build their own freeways if they don't like the speed limit. This sort of attitude is unproductive and pointless, particularly in an industry like telecommunications where the whole industry is struggling to find a common direction forward.

In the meantime, competitors often find themselves eating their takeaway on the footpath. At the Hawthorn exchange in inner-east Melbourne, iiNet's Michael Malone told me recently, the company was forced to build its own mini-exchange right outside Telstra's facility. "It's just a large green box surrounded by a couple of pillars," he said. "You have to come up with a solution somehow."

In some cases, competitors are given access to disused parts of exchanges that are unsuitable for hosting core telecommunications services. Space offered in one Perth exchange, Malone said, was drenched with rainwater because of leaks and "the access seeker has to fix it. The guys at the exchange are very protective of the local loop, and regard it as their job to protect it. Things that should take months, take years, and it's frustrating for companies that have come in late and they're sitting at the back of the queues."

If ever there were an argument to support Telstra being separated, the exchange issue is it. If the exchanges were run by a wholesale infrastructure operator that was not incestuously linked to a major data services retailer, the infrastructure operator would be investing heavily in its exchange infrastructure to service the entire industry — because, in a market of growing demand for access, its revenues would be linked to available exchange space.

Last year, I toured the Adelaide data centre of Internode, which was in the process of planning expansion of its server facilities into an adjacent room because its existing ones were filling up quickly.

This is how things normally work — but Telstra simply doesn't have to do this, and it hasn't been. Competitors are allowed into the exchanges when Telstra feels like it; instead of expanding those exchanges with more space when they're full — whether they are really full, or just reserved for Telstra's retail customers — Telstra simply leaves them to lie fallow.

If forced to realise how onerous the process is for accessing the exchanges, an independent Telstra retail operation would join the cacophony of its complaining competitors.

Customers are feeling it, too: one reader who dropped me a line last week noted the ridiculous situation in which a new housing estate with more than 100 blocks is being built out in an area near an exchange that is marked as being full. Nice new houses — but good luck getting broadband there. "I've applied to iPrimus, Exetel, iiNet, Netspace, TPG and Bigpond (twice so far) and, of course, no one can assist," he says. "There's no one to speak to to find out if there's any upgrade plans."

The only option Telstra gave him: a wireless Next G connection, which shifts the burden of connectivity away from Telstra's local exchanges onto a wireless network to which competitors have no access.

Telstra says competitors should build their own infrastructure — but with building their own exchanges impossible and access to existing exchanges difficult, how is this realistic? Certainly, one can't expect a company like Exetel to become a 3G mobile carrier just because Telstra doesn't feel like letting it access its exchanges?

The ACCC's efforts to open up Telstra's exchange management to closer scrutiny are a long-overdue step in the right direction, if only so that all of Telstra's competitors can have a more realistic expectation of what they can and can't realistically access. It's hard, after all, to build a viable business model around revenue from customers that can't be connected because you can't get into the exchange (for further reading, drop by adsl2exchanges' list of capped exchanges to see if yours is included).

Interestingly, the Telstra spokesperson in the above story blamed the lack of connections on high demand for space in the exchanges due to ACCC-mandated unbundled local loop pricing that Telstra feels is too low. In other words, Telstra is saying, the exchanges wouldn't be so congested if its competitors weren't so eager to put gear into them. This, from a company that continually slams the industry for under-investing in infrastructure.

So, here we are: the only restaurant in town doesn't have to serve people if it doesn't want to, has no interest in expanding so it can accommodate more diners, and won't tell patrons how long they have to wait for a seat. Takeaway is available for those who really want it — but exchanges aren't going to get less full, only more so. When this process reaches its logical conclusion, there will simply be no more ADSL2+ services available — and Telstra will be using Next G as its overflow mechanism, leaving everyone else holding the bag.

Have you had problems getting broadband because your exchange is full? What was your solution?

Topics: Telcos, Networking, Telstra


Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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  • Some exchanges are full up.

    From checking the link provided in the article, the one or 2 exchanges I've specifically seen are indeed completely "out" of MDF or floor space. In the case of one of them, any ISP can try putting their gear in - there simply isn't rack space available unless someone physically takes a rack out! As for the MDF - it already covers a whole wall with tighly packed blocks both horizontally and vertically mounted! In the other exchange I've seen - you could probably fit a rack, but there's definitely no blocks left anywhere on the MDF. Still that wouldn't stop an access seeker paying to upgrade a few blocks of the MDF to newer technology or even redesigning things to include an add on MDF - but that would cost them money. IINet had a good idea - install your own external housing next door. As for buildings that leak - yes most Telstra buildings are getting old and why on earth should Telstra pay to update or repair something that isn't causing them any problems? It's certainly a difficult issue to know what to do with in these cases.
  • Tunnel

    That's what your vision is like David. Trying to reply to any of your garbage will only get a sarcastic reply or the "this is a Blog and a personal opinion, not a news story" response.

    You have no respect from readers and you simply degrade the already poor reputation of this web site.
  • why pay for someone else to make a profit

    the way I see it, (and yes I am a telstra shareholder )is that you are asking me to pay for some other telco with a ceo sitting behind their big polished desk to make more money.
    Telstra has an obligation to me and the other shareholder to maximise our return. Doing freebe maintenance to allow a competitor to use infrastructure that was built out of our money (not government) is a bit unfair
  • @why pay for someone else to make a profit

    Your argument is specious - it is nothing more than saying that because Telstra has shareholders it has the right (nay the duty) to break the law (laws against anti-competitive and monopolistic behavior - these laws are their to protect the Australian public - the consumer).
    The infrastructure was paid for out of our taxes, and now that Telstra has inherited it, they need to look after and maintain this infrastructure (an exchange with a leaky roof is Telstra's problem - its called maintenance).
    This is the problem with Telstra - because it controls the infrastructure and it retails the services it has a fundamental conflict of interest. It has too much motivation to block, hinder and otherwise make things difficult for the other telcos and ISPs and this is why it should undergo full structural separation. Not because its the right thing for shareholders, but because it is the right thing for the Australian market.
    I will allow one concession - where exchanges are genuinely full, I don't support forcing Telstra to fully cover the cost of expansion. There is no reason why the other companies shouldn't be responsible for at least half of the cost. In fact if there are enough companies interested in expanding an exchange, there is no reason why these companies couldn't JV it and share the expansion costs.
    Disclaimer - I don't work in the Telco industry and I don't have shares in any Telco / ISP. I do have many years experience in IT (networks and network security)
  • Swiss cheese

    That's how many holes your argument has.

    1. The writer did not encourage or condone illegal activities. The writer stated "Telstra has an obligation to me and the other shareholder to maximise our return." which is quite clear and does apply to every company. Just look around at the banks, airlines, mining companies, petrol, retail etc, they are out there to produce a profit for shareholders and not to be a benevolent society.

    2. Some (and I stress SOME) of the infrastructure was built as a government owned entity. Two major things happened here, firstly it was sold to the public and taxpayers were reimbursed and secondly some of the so called experts on this site have quoted that the average lifespan of copper is 10 - 20 years meaning much of the copper has now been replaced or upgraded since Telstra became a private company.

    3. It may control the infrastructure but there are strict rules (some of the strictest in the world) on the pricing and supply of these services and we are all well aware that the ACA & ACCC would be all over Telstra if there is even a hint of any breaches of rules let alone for these to be proven.

    4. As to your concession, I see no reason why all parties shouldn't be forced to upgrade their equipment to power and space efficient devices. If it comes down to a major capital cost on the actual buildings then it should be based on a base access fee and then a fee based on actual usage (power, sq meters, cable used). This would probably harm Telstra but it will ensure that companies do mot simply wait until Telstra upgrades and then moves in after all the upgrades are completed (which has happened in the past).
  • Forget Exchanges

    I got tired of waiting and connected to an extremely reliable and fast wireless broadband service. ADSL is not the be all to end all.
  • What is so bad about separation?

    What is all the fuss about separation? I would have thought it could be done quite cleanly if any realistic upfront costs where met by the government. Then the infrastructure part of Telstra (iTelstra) would charge rental for any equipment located in their exchanges which would cover maintenance and expansion. Profits would still be the focus for the shareholders and then the service element of Telstra would be a customer to iTelstra and still look after the profits for its shareholders. Total of the two Telstra's would then make the same or even more profit for their shareholders as well as repairing a poor public image. The poor public image is the biggest threat to Telstra at the moment created by some chest beating and the old saying if "I can't play, I am taking my bat & ball and going home"!
  • That's not right

    I think if they completely separated the company then you would be a shareholder of one or the other separate organisations, rather than an umbrella group.
  • Speak for yourself

    Good work keyboard warrior. David is perfectly well respected, and his opinion here is well reasoned - even if it is not completely correct.

    Just because someone comes from a different perspective to you does not make it garbage - I would say it is you that has tunnel vision.
  • Wireless broadband

    Fast wireless broadband? The only "fast" wireless broadband is 3G (HSDPA), but the plans are prohibitive expensive for pretty much all but business. As soon as they are comparable to current ADSL plan pricing (for equivalent download quota) I will be dumping my fixed line altogether and I can see a large proportion of the Australian public doing the same. Then watch Telstra stock price plunge and they won't be getting any sympathy from me.
  • The Govenment sold the infrastructure to us

    When successive govenments sold off Telstra they sold the infrastructure components as well. So using the Authors analogy, if you bought the highway from the govenrment so that you could set the speed limit how irritated would you be if you were then told to not only maintain the road but let competitors huge truck use it, at a price you have no control over, and you were not allowed to go any faster than they could.
  • Davids OK

    I always enjoy reading David's work and have every respect for him as a journalist. Don't understand where you are comming from Mr.Brainless, I for one prefer journalism to marketing. Perhaps you should stick to marketing sites such as NWAT and not trouble yourself with reality.
  • Shareholders own network!!!!

    You are right!!! Shareholders own the network!!!
  • BB Access

    I had a bad experience but not with a full exchange. I could not get dsl for 3 years as I was told it was not offered or not possible. I tried a variety of ISPs to be told my pairs would not support dsl, even though I had isdn on those lines. The ISPs indicated that they were dependent upon Telstra to provide pstn information on line quality. During a Telstra promotion (where you could try & buy) I applied and was connected in less than a week. I promptly churned to a better value ISP. I will not forget that Telstra blocked my access to dsl services for 3 years, nor the lies and deceipt involved.
  • Classic case for the ACCC

    File a complaint, as the defendant is Telstra I am sure they will respond to your complaint the same day. If your only form of complaint is this site you will get nowhere.
  • Thisis a blog and he is not a journalist

    He has admitted this himself!
  • In memoriam: Opel

    Great to hear you were able to do this -- there is a patchwork of WISPs providing important alternatives, but their reach is sadly still quite limited. This is exactly why Opel would have helped many people -- providing an alternative to the copper local loop and, perhaps, forcing Telstra to compete for wholesale revenue by upgrading its full exchanges with new space. That way, it would at least have gotten wholesale revenues rather than being cut out of the equation altogether.

    The way things are, Telstra seems to have opted to leave its full exchanges, full, perhaps because expansion costs outweigh the potential wholesale revenues. It is just easier for them to weather the criticism than to invest the money to expand their exchanges. This is a fundamental problem with the current model for broadband and its resolution should be a major policy objective for the current government.
  • Yes, but

    If you bought the highway, why wouldn't you maintain it? Eventually the potholes would get the worse of you and you would have to do something about it.

    And why wouldn't you encourage more people to drive it so you could collect more revenues from tolls? If you only let your close friends drive it for a discount, and told everyone else to take local roads, pay higher tolls to subsidise your friends' joyrides, or just stay home -- well, that wouldn't really make much sense, would it? Just think of the firestore

    It would only make sense if you said you wanted to set speed limits, but you had really bought the highway to run it into the ground while you perfect, patent and market the flying car.
  • Isn't expansion part of strategic planning?

    It does seem clear that many exchanges are full up -- but how did we get to that point? Surely, Telstra would have seen this coming and would normally have made plans to physically expand its exchanges? Any normal data centre operator keeps capacity well ahead of demand based on forward-looking predictions, contracts, etc -- why didn't Telstra see this coming? I know from conversations with other players that many of them have offered to cover their share of upgrading the exchanges but have been told flat out that expansion just isn't possible -- which is why some providers are taking the remora approach just so they can get on with things.

    Surely, the full exchanges are limiting Telstra's ability to service the exploding demand for broadband -- which would surely make exchange expansion a key priority for its business growth? The only thing we can read from this is that there is still plenty of space for Telstra equipment in the exchanges, just not the equipment of anybody else. The problem is that for most "anybody else"s there is no other way to provide service but Next G has given Telstra the luxury of time.
  • Exchanges are not just brick buildings

    An exchange is a physical building, I have walked through many and there is normally plenty of space but the issue is often power resources in a local area. I have heard of cases where there are empty racks that could hold plenty of hardware but the power feeding the local area and the exchange is reaching limits. Like all businesses the local power companies can cap the amount of power that is supplied to the building.

    You use the analogy of highways, it is easy to have space to build a 10 lane highway but if you are only given permission to have one on-ramp then there is no use building a 10 lane highway is it? It's not a matter of potholes, it is that the tar manufacturers are not providing you with enough to fill them.

    When the FTTN happens a lot of the processing will be moved out to the local streets and we can only hope that whoever wins it has considered the power implications of all of these little nodes everywhere, there is sure to be some areas where there will be power limitations. The good thing about this will be the reduction of equipment in some exchanges that will relieve the power drain.

    I like your blogs but you have a tendency of selectively writing about issues and completely / deliberately ignoring many of the pivotal aspects of the issue.