The news that Broadband over Powerline (BPL) technology has taken a step closer to commercial reality with successful Australian trials of VoIP phone calls must be causing more than a little concern within the hallowed halls of Telstra.

It would appear that new boss Sol Trujillo and his cohorts at the top of the big carrier have their work cut out for them over the next two years. Serious threats are emerging to their once clear cut monopoly in voice telephony from a number of areas.

In recent weeks we have seen Telstra demonstrate a remarkable degree of uncertainty for a company of its stature with respect to its VoIP strategy. Telstra’s astonishing admission that it will most likely not be in a position to deliver VoIP services within 12 months, even as its PSTN voice call revenues continue to drop, are indicative of what an insider told us recently is a culture of denial that pervades the organisation. “Everybody within Telstra has been indoctrinated with the idea that PSTN is superior to VoIP,” we were told.

Be that as it may, Telstra has embarked on developing its own VoIP business. Though it will almost certainly lose its monopoly in the provision of retail voice services, it could remain content in the knowledge that it will probably win a major share of the VoIP market. Furthermore, VoIP requires a broadband network and Telstra owns the copper wire infrastructure that enables the delivery of ADSL and its variants. Thus, wireless broadband aside, Telstra has always held what seems to be an unassailable monopoly in the provision of wholesale broadband services enabled by its ownership of the ubiquitous fixed line “last mile” copper wire network.

In recent years, proponents of wireless communications technologies, including wireless broadband, have chipped away at Telstra’s monopoly on voice and data communications. However, wireless technologies at this stage do not yet provide the potential bandwidth capabilities of Telstra’s fixed line copper network and the infrastructure is still far from ubiquitous and requires a good deal of development.

The advent of BPL, however, for the first time throws out a serious challenge to Telstra’s monopoly of the fixed line communications market. The national power grid is a truly ubiquitous network on an even greater scale than Telstra’s copper wire network. Nearly every home is connected to the grid and already wired up with at least one power outlet in nearly every room, in a way that is analogous to having a ready made local area network already installed. To access the network, all that is required is a PBL modem (Mitsubishi already markets them) which can be plugged directly into a power point. Thus, we have a ready made national fixed line communications infrastructure already in place for both wide area and local area applications without the need to roll-out a single additional line.

Of course, BPL is still at the trial stage and is not quite ready for commercial release just yet. Interestingly, some of the biggest detractors of BPL technology appear to be purveyors of wireless communications who have raised concerns of interference caused by emissions from the unsheathed power lines. These concerns have some validity, which even the proponents of BPL acknowledge.

However, Geoff Fietz, manager of telecommunications enterprise at NSW regional energy services company, Country Energy, says that any potential emissions problems of BPL are addressable. “There is no doubt when you use exposed cables for data transmission, emissions happen,” he says. “We held a 45Mbit trial of BPL where we operated the network at full power and the raw figures from the Australian Communications Authority recorded emissions that could interfere with high frequency radio.

“However, the issues are addressable. If we were to go forward, we would use a 200Mbit system, which wouldn’t need the same number of repeaters and allows greater scope. We could employ a technique called notching, where we take out different frequency ranges; we can regulate power levels; and we can employ best practice techniques in installations.”

A number of power utilities are gearing up to deliver pilot versions of BPL to selected consumers before the end of the year and they make no bones about the technology’s capability to compete with Telstra’s network for both data and voice traffic.  “BPL in our view offers the potential to compete with both the copper and wireless networks. This is a technology that can potentially be applied to the last mile,” says Fietz of Country Energy. “Every home with power potentially has access to the network and has a built in broadband LAN.”

If we are to assume that interference issues are the only thing standing in the way of BPL and that these issues can be overcome, then Telstra’s stranglehold over the last mile network to households may well be broken. If that happens, the era of true competition for the provision of voice and data services will have finally arrived. For consumers, that day won’t be a moment too soon.