For a long time there have been calls for local Australian servers for Blizzard titles such as World of Warcraft and Starcraft II. Recently there has been light shed on the issue - with the World of Warcraft production director, J Allen Brack, directly naming Telstra as the major obstacle.
"There are a couple of issues," claimed Brack, responding directly to a question posed by Stephen Farrelly at Ausgamers. "I feel bad for Australian players, but the biggest problem right now is the number one ISP in Australia; any traffic that gets routed outside of Australia goes to San Diego. So it doesn't matter where in the world you're going, you're going to San Diego. And then you're going to San Diego to somewhere else."
There are issues with Telstra - pinging data to and from San Diego to Blizzard's servers in Singapore is obviously far from ideal - but it's part of what is essentially an obscured issue. Blizzard obviously sees their Oceanic server set up in Singapore as 'local' for Australian gamers when it's not - it's over 6000 kilometres away. There are ISPs out there directing data straight to Singapore, but they still have some issues in terms of connectivity. If Blizzard were to set up truly 'local' servers, wouldn't the Telstra issue would be null and void?
UPDATE: We've just received an email from Telstra stating that Brack was actually referring to Optus, after mistakenly thinking they were the largest ISP in Australia. Which means, to an extent, that the problems Brack was referring to are actually less important than he stated. Take from that what you will!