Digital Home Advisor

One ISP who has an investment in both fixed line and IP telephony, is gotalk. Despite having one foot in either camp, gotalk CEO Steve Picton believes naked DSL is the way to go, with over a third of gotalk's new customers subscribing to it. He said that gotalk's VoIP adoption figures are "almost off the scale", and agrees with Malone's calls for simplification.

"We've got both (fixed line and IP telephony services), and I can still sit here and tell you that fundamentally, from a gotalk perspective, that [IP telephony and naked DSL] is the way the market is going. If a customer asks us our opinion that is where we always point them."

"It's not a matter of will it take off, but how can you stop it. That's why Telstra and even Optus to a lesser extent are paranoid about it, because it really is going to substitute significant amounts of their existing revenue," Picton said.

For the likes of Telstra and Optus, naked DSL is winning customers away from their fixed line revenues, and at least in Internode's case the telco giants have been less than helpful in assisting customers get rid of their local loop services. "We didn't expect them to be," Hackett said.

"Obstruction to the smooth migration from line shared ADSL2+ to naked DSL services; gaps in the provisioning path for new service installations; and having to mount a joint defence to the recent Telstra High Court case that tried to have the deployment of these services declared unconstitutional! All that said, we anticipated those things and have mitigated most of them, and demand for these services is already high," he said.

iiNet's Malone believes that while Telstra or Optus would never admit it publicly, he doesn't think anybody at Telstra "over a beer" would claim that in 2 years time they wont start offering VoIP linked with their high speed broadband.

"It's just illogical, but I don't think they will say it publicly," Malone said.

Telstra did not return repeated requests for comment on this issue.