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Exchange students learn the taste of defeat

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.
Written by David Braue, Contributor

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?

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