UPDATE | According to weekend news coverage, the cost of Telstra's sealant bungle may reach $1billion by the time the telco giant fixes it. A Telstra linesman told AustralianIT the sealant, supplied by 3M, had turned out to be an electrical conductor and has degraded severely over time. "The connectors are just sitting there exposed, the rain comes in and the cables start to short-circuit. All Cairns would need is six to 10 inches of rain overnight and you would lose half of Cairns. As soon as the pits start to fill up full of water, there's going to be problems . . . things will go really belly-up." Read the full story here

The union accused Telstra of cutting back capital spending on its network so severely that even cabling in metropolitan areas was degraded to the point where if heavy rains were experienced, widespread outages would occur.

According to an iTnews article:

Steve Mason of the CEPU charged that Telstra's policy over the last four years to "seal the CAN" - undertaken as part of its DMO (digital mode of operation) strategy - had led to network problems. An epoxy sealant used on network cabling had degraded so quickly that the CAN was increasingly exposed to major breakdowns when it rained.

"The dry period we are now experiencing is limiting the full extent of the problems," the CEPU said in a statement timed to coincide with its submission to the Estens inquiry into regional telecommunications.

"It is a time bomb ready to go off," he said.

This is bad news for ADSL customers, who rely on the copper network for reliable service.