NBN CEO wants to boost RSP choice for end users

NBN CEO Bill Morrow today said the company wants to look at ways of making it easier for retail service providers to sell services on the National Broadband Network.

During a National Press Club address Morrow said that he wanted to provide lower-cost ways for RSPs to connect to the network's 121 points of interconnect (POIs).

Forty RSPs are currently offering services in regional areas, the CEO said in remarks prepared for the NPC address.

"It’s this level of choice that people outside of cities have never seen before, and hopefully something we will see more and more of as the network gets built to more and more places," Morrow said.

"We are also always exploring ways to increase competition, talking to retail companies, regulators, and, importantly, communities in regional Australia."

"The backbone of our network is divided into 121 geographies – each served by a 'hub'," the CEO said.

"These hubs are connected by an all-fibre network – the NBN's high speed data freeway if you like."

"Retail service providers then link to these hubs to provide services to that area. They can do this by either building their own fibre connections, or buy a connection from a few of the existing providers. This is commonly called backhaul," Morrow said

"Now, by virtue of Australia’s size, about 40 of these hubs are more expensive for retailers to connect to – due to the distance for the backhaul."

That may present a barrier to entry for some RSPs, potentially limiting competition in some areas, he said.

"If this turns out to be the case, there are a number of options we could explore to boost competition however before we do anything NBN — our preference would be to see the market respond.

"We are working with others who see a market opportunity by solving for this remote regional point of entry. At the end of the day, it’s about levelling the playing field and ensuring there is a low barrier to entry and we would hope the markets will do just this."

The cost of connecting to a large number of NBN POIs has previously been a source of criticism, particularly among smaller RSPs.

NBN could potentially establish its own wholesale service to reduce the barrier to entry.

Morrow's comments today drew quick praise from Macquarie Telecom. A competitive backhaul market is essential to realising the benefits of the NBN, the company said.

"There is a bit of a chicken and egg problem – smaller retailers cannot bring competition to locations without competitive wholesale backhaul connections, but competitive wholesalers are reluctant to invest ahead of retail service providers," said Macquarie's national executive, industry and policy, Matt Healy.

"NBN chief executive Bill Morrow has accepted the NBN could have to play a role in forcing the hand of the market, or stepping up if it turns out no one else is willing to go to some locations.

"Taking such as approach should enhance rather than damage competition in the medium term, which is what will lead to the best outcome for consumers and businesses."

Digital economy

Morrow said the NBN rollout could help "create a seismic digital eruption; an innovation-led economic impetus that not only helps Australia maintain its high standard of living but enables us to lift it even higher."

"At the end of the day, the NBN will be the backbone of the digital economy.

"It's the policy settings, its industry, and its individuals that will drive the innovation that is critical to our economic prosperity."

Morrow again spruiked the potential for more than half of Australians to end up with services capable of gigabit speeds.

Homes with fibre-to-the-premises (FTTP) connections and, following an upgrade to DOCSIS 3.1, those with hybrid fibre-coaxial (HFC) connections will potentially have access to gigabit connections.

Morrow also recently revealed plans for G.fast trials, which could increase the speed of fibre-to-the-node (FTTN) connections.

Copyright © 2015 IDG Communications, Inc.

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