A big fish in a Big Pond, Telstra rolls out cable modem service in Sydney and Melbourne

As U.S. cable operators stick their toes into the cable modem market, rolling out service in fits and starts in scattered markets, Australian carrier Telstra has cannonballed into the water with its nationwide Big Pond high-speed Internet access service.

Telstra - Australia's largest telephone company - announced last month that its Big Pond service is now available to nearly one million homes in Sydney and Melbourne, the first step in the carrier's grand scheme to roll out service to 4 million households by 1999.

Construction on the hybrid fiber/coax network, which is an overbuild of Telstra's existing twisted pair network, is about halfway done, said Philip Sykes, general manager of broadband product development for Telstra. Hewlett-Packard is providing server technology and NEC Australia is supplying network design services for the cable modems and headend routers.

Motorola is supplying its CyberSURFR cable modems, as it has done for many U.S. deployments; the key difference is that in the Telstra rollout, customers are required to buy their modems.

"We are approaching our privatization in Australia, so our balance sheets have to look pretty spic and span at the moment," Sykes said, adding that customers do not seem fazed by the modem's $595 Australian price tag.

Pricing of the service itself is also different than in the U.S. A monthly charge of A$65 covers 100 Mbytes of data transfer, after which customers will pay 35› per Mbyte.

While fear of network congestion as a result of too many subscribers has led U.S. operators to keep the reins on their cable modem rollouts, Telstra has that problem under control, Sykes said.

For one thing, because Telstra had originally planned to use the hybrid fiber/coax system for voice as well as video and data, it built a network that is highly resistant to noise, Sykes said. The carrier opted to hold off on its telephony-over-cable plans for the time being, but because its twisted pair network was built to higher requirements, it is more robust than one built to less stringent specifications.

Sykes also credits the engineering of Telstra's network. Each node serves only 600 to 700 homes and was designed to be easily subdivided by a factor of four. Using Motorola's asymmetrical modems also adds to the network's reliability, since symmetrical modems tend to have a poor tolerance to noise on the reverse path, he added.

Telstra is in discussions with a range of major content providers but is discouraged by the fact that most of them are U.S.-oriented, Sykes said. To that end, Telstra has incorporated content management services, coordinated by HP, into the Big Pond service, providing the necessary tools for the creation of unique Australian content.

Sykes calls the Big Pond service a "telco approach" to cable modem technology. "This is the first time that a telco has taken the cable infrastructure by the scruff of its neck and incorporated telcos' principals of quality of service delivery and engineering," he said.

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