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ssooooooo...who wan't to make a s#it load of $$$$ New broadband technology bypasses phone line PRINT FRIENDLY EMAIL STORY

The World Today - Wednesday, 14 September , 2005 12:26:00

Reporter: Tim Jeanes

ELEANOR HALL: Whether it's privatised or not, Telstra could be facing some tough new competition in years to come.

This comes in the form of a technological advance, which the manufacturers claim will revolutionise the way we connect to the internet.

The new technology allows consumers to plug into a power point, not a phone line, to get a high-speed broadband connection, and it's now being trialled in Tasmania, as Tim Jeanes reports.

TIM JEANES: The power lines that run along our roadsides could soon be taking on a new role, if Tasmanian power company Aurora Energy has its way. Aurora and Mitsubishi Electric are launching the first Southern Hemisphere Trial of Broadband using power lines, not phone lines. The nine-month trial will involve 500 customers in Hobart.

Aurora Chief Executive, Peter Davis, explains.

PETER DAVIS: It's a little high frequency signal that sits over the top of the electricity and effectively it arrives at your home, it is distributed around in the electrical wires inside your house, and can be delivered out of the power point.

To collect it from the power point we use a special modem, just like you'd use with a normal computer, but this particular modem plugs into the power point, you plug your computer into it, you plug your voice over internet phone into it, and you're up and away.

TIM JEANES: How does it compare on issues such as speed, such as cost?

PETER DAVIS: In terms of speed, we think this is quite a revolution in communications in Australia, because everybody has an electricity network connecting their home, and by using that network, we can provide speeds that are substantially faster than the current ADSL-type offers.

In the initial launch we're going up to 12 megabits per second. To put that in perspective to get high quality movies, videos downloaded, we understand you need about four megabits per second. So it means you can take streaming video off the internet, through your power point straight onto a large screen.

TIM JEANES: Now, would this have special applications in, say, rural areas?

PETER DAVIS: Yes, the big benefit of this is that the electricity network provides connection into the last mile. It's very expensive to roll optical fibre out to every home, particularly in the more rural areas, but the power lines are already there, and often these are quite thick copper or aluminium cables that are already there and therefore provide broadband, new age technology and cheap voice calls into the bush.

TIM JEANES: Now, you say voice calls, so you won't need a phone? You can ditch your Telstra account?

PETER DAVIS: That's right, you will no longer need a fixed line phone. The nice thing about the broadband over the power line is that it's always on, there's a phone comes with it, and we can provide a voice over internet type call solution, and these are the sort of calls that are, you know, six cents a minute anywhere in the world.

TIM JEANES: Should Telstra be worried about this?

PETER DAVIS: Yeah, I think if customers start to migrate towards a better product in terms of high speed internet and not require their existing Telstra offering, yeah, it may well have an impact there.

TIM JEANES: There've been predictions that impact could be as much as 10 per cent of Australia's $70 billion broadband market, with Telstra also coming under increasing pressure from cheap phone calls.

But those such as Mark McDonnell, senior analyst with corporate advisory service BBY, say a wait-and-see approach is needed.

MARK MCDONNELL: It's really too early to tell, it's essentially an experimental technology, there has been quite a lot done on it in Europe, particularly in Germany, but it's really only still at a trial stage.

Obviously using power lines does create certain hazards and safety issues, and that can introduce some costs associated with the deployment of telecom services over power lines.

There are also some technical issues relating to interference protection given the high voltages employed on those lines currently.

TIM JEANES: So don't sell your Telstra shares on the basis of this?

MARK MCDONNELL: (Laughs) No. There are many issues affecting the value of Telstra and this is a relatively small one, in my view.