The threat of a class action against Telstra from Sydney-based lawyer Michael King on behalf of more than 200 dissatisfied ADSL customers has far-reaching implications for other ISPs as businesses grow more reliant on broadband.
The class action, which may set a dangerous precedent in the ISP market, relates to complaints by customers over the amount of outages Telstra customers have experienced in recent months.
Michael King of Kings Lawyers told Computerworld the claim will go ahead. He said 25 per cent of claimants are commercial customers.
"They are seeking compensation for a promised service that wasn't provided," he said.
"The days are long gone where a large corporation can take money for a service it doesn't deliver."
Telstra spokesperson Michael Herskope said the carrier is yet to receive formal notification of the class action, adding: "Sure, outages are not convenient for businesses, but we don't guarantee a fault-free service. It's an infant technology. The teething problems it's had are not unique to Australia."
In the six months to the end of June, Herskope said ADSL has been available 98.1 per cent of the time.
But Simon Hackett, managing director of ISP Internode, said 98.1 per cent is not very good.
"It sounds good to someone that hasn't multiplied it out over the month. What 98 per cent means is the service is down 2 per cent of the time, which translates to about 14 hours a month, which is not good. And it tends to be the hours it is most needed."
Hackett said that a class action would not set a good precedent for the industry and recommended dissatisfied Telstra customers look at alternatives in the marketplace, rather than start a series of class actions, particularly as it is still early days for broadband in Australia.
George Hazim, corporate affairs and communication manager for Primus Telecom, said Herskope's statistic for Telstra's ADSL availability was "far, far imaginary".
"IPrimus has been paying for a service very much below par and it's not good enough on Telstra's part," Hazim said.
"It's affecting our ability to deliver a high-class quality service to our Internet customers," Hazim said.
Hazim said the impact on the ISP sector of such a case "would set an interesting precedent".
Lorenzo Modesto, director of business development for ISP Pacific Internet, said ADSL outages are similar to those seen when the digital line was adopted in 1997.
Recognising Telstra has had teething problems, Modesto said the main problem is lack of information being passed on to those affected.
He said businesses relying on constant connectivity should have a back-up link and it should ideally be a different type of technology.
"If they are using ADSL, businesses should have an ISDN link or even an analogue modem to ensure seamless connectivity," he added.