Telecommunications
NBN Co consults on network design
(1 February 2010) NBN Co has begun a national consultation with the telecommunications industry about the design of its proposed network.
In late December the company issued a Consultation Paper outlining the key features of the network. According to the blueprint, NBN Co will operate only at a very basic level (Layer 2) of the Next Generation Network “stack”. It will provide physical access and connectivity for broadband services but all other functions- at both wholesale and retail levels - will have to be provided by the other companies which use the network.
Concerns are being raised in the industry as to how many companies in Australia will have the resources to build national networks on top of this minimal base and consequently the extent to which this model will actually stimulate competition in the wireline space.
The other major design issue canvassed by NBN Co is the number of points at which its telco customers will be able to access the network. No number has been fixed yet, but statements by NBN Co Mike Quigley suggest it might be between 100 and 200.
This implies a sweeping rationalisation of the current national wireline network. Its extent can be gauged by the fact that there are currently over 5,000 Telstra Exchange Service Areas (ESAs), 602 of which are located in the denser urban and suburban areas.
The industry is still digesting the full implications of this model. One thing is clear, however: with only some 200 points at which other carriers can interconnect, NBN Co will have to offer not only “last mile” access services but considerable backhaul as well, particularly in rural and regional areas.
This in turn raises the prospect of NBN Co acquiring, in some form, Telstra backhaul assets i.e. a significant portion of the existing Interexchange Network (IEN).
The extent that NBN Co will have to acquire such capacity from Telstra is just one of many NBN issues which remain outstanding, including the overarching question of pricing. Indeed with the fundamentals of network design yet to be finalised, it will clearly be some time before the mainland roll-out gets fully underway.
For more information, contact the CEPU via feedback@cepu.asn.au