**** Update : Thursday 6th December. As expected, the Federal Communications Minister has today ordered an investigation by ACMA into the sale of adult content ****

Australia's #1 Telcommunications carrier, Telstra is this morning embroiled in a scandal involving it's YouTube styled user generated content site WotNext, which was found to have a number of soft-porn clips.

WotNext is unique in that it has a revenue sharing model whereby contributors earn money each time a user of Telstra's NextG mobile service downloads a clip. Each clip is charged at $1 and Telstra takes 50%, with the other 50% being credited to the user.

The key issue is that no age verfication takes place either on the site, or the mobile handset, therefore minors can access adult content.

News.com.au and the Sydney Morning Herald are both reporting the story, with News.com.au having captured and censored one of the clips for publication.

It will be interesting to see whether Telstra will undertake an audit of its userbase to ascertain whether any minors have indeed accessed adult content and whether Telstra is prepared to refund any money it earned through minors having access. No doubt the incoming Communications Minister, Senator Stephen Conroy, will be asking Telstra to 'Please Explain'.

Furthermore, Telstra may have potentially committed a criminal act by selling porn to minors. The Australian Media and Communication Authority's (ACMA) "Internet Content Guidelines" and "Adult Verification Scheme" has specific guidelines relating to the access of adult content online.

Earlier this year, the site was lauded for its effort by the Australian Direct Marketing Association (ADMA) when it won Best of Show at the 2007 Mobile Marketing Awards. The agencies credited include, George Patterson Y&R and Tiger Spike.

Unlike YouTube, Telstra claim the site is moderated. However this Google cache snapshot, clearly shows at least one of the controversial videos was posted back in July 2007, casting doubt over Telstra's assertion that the site is moderated.

Beware the pitfalls of user generated content!