Microsoft messaging software will be given a direct interface with Telstra's Public Switched Telephone Network on a trial basis, for the next four months.

The trial, conducted jointly by Microsoft and Telstra, will give 3,000 broadband users the opportunity to make outbound calls from their PCs using MSN Messenger or Windows Messenger.

A limited test of voice of over IP, it will allow participating broadband Internet users to make phone calls via Telstra's conventional telephone exchange. Telstra said it would be a long time before the Public Switched Telephone Network (PSTN) network is replaced by end-to-end IP telephony, but the trial may provide early indications of how the service will be delivered.

"I'd make the point that underneath our core PSTN network we have already been deploying IP technology -- you don't even know it's there; you can't see it, feel it or taste it," said Stuart Lee, Telstra executive director of voice and commercial. "The issue here is what's going to change the interface between the customer and the network"

The Internet telephony service is not a cost-effective alternative for local calls. Blind to a user's proximity to exchanges at a national level, local and STD calls are charged at the same rate: 25 cents connection and three cents per minute for the first 5 minutes (12 cents per minute thereafter).

Calls to mobiles cost 26 cents per minute while international calls to the USA, Canada, UK and New Zealand are aligned with Telstra's cheapest international rates.

According to Lee, broadband is essential to achieving an Internet-based PSTN access method of sufficient quality to match conventional copper access.

That, for now, may be the biggest obstacle to the widespread adoption of Internet telephony Australia using the Telstra-Microsoft model.

"Every customer in Australia can get broadband, what we don't have so far is enormous penetration," said Lee. "And certainly for high volume take-up [of broadband] in the millions we'd certainly need to have much more substantive roll-out".

The role of Microsoft in the trial may create some controversy. Its .Net Passport service, which has created unease amongst privacy and security-conscious segments of the Internet community, plays a critical role in authenticating users against the Passport Database for billing purposes.

"It's important to understand that Passport is identifying the customers -- it's the key if you will," said Microsoft network services group manager, Kevin Rodrigo. "But the billing relationship is one where we're leveraging -- and where Telstra is leveraging -- a billing infrastructure that's been in place for many years".

Lee said that Telstra places as much confidence in Passport's security environment as it would any surrounding offline finance facilities.

Nevertheless, it is clear that Telstra is not taking chances when it comes to the trial. It doesn't want users to suffer financial harm, "through their own silly actions" or anyone else's -- users will have to pre-purchase call credit.

"What we've done is not allow a billing arrangement that's post-paid where ...there could could be events and episodes that lead to nastiness for end users. We've, in effect, capped that risk," said Lee.

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