I think the jury is still out on this one. The situation is as follows:

1. Telstra introduced a layer 3 Flexstream service for ISPs that handles 
session termination and authentication.

2. ISPs complain about no control and unreliability of IPSN (more Telstra 
babble IP Services Node-currently a Nortel Shasta).

3. ACCC issue a competition notice.

4. Telstra releases a "layer 2.5" service where the session is terminated 
at the IPSN but an L2TP tunnel is passed to the ISP per user session allowing 
for authentication at the ISP end.

The unreliable device in the network has been the IPSN. Now the authentication 
is handled by the ISP but as Tom pointed out the session is still terminated by 
the IPSN. Another important point is that the IPSN must now create many L2TP 
tunnels. How reliable will it be at this task? Only time will tell.

The basic Telstra ADSL network at layer 2 is reliable. Unfortunately I would 
not trust anything above that. Telstra are unwilling to provide a layer 2 
version of Flexstream and they would lose the control they love to maintain 
and erode their Bigpond Direct revenues.

The best hope for all concerned is that they replace their current Shasta 
with a reliable device.

Hope this helps

Well Wizard