Opticomm's Phil Smith at CommsDay Summit 2014

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Breaking the NBN Co Wholesale Access Monopoly

Breaking the NBN Co Wholesale Access Monopoly

CREATING A NEW LEGISLATIVE AND BUSINESS ENVIRONMENT TO CATER FOR MULTIPLE WHOLESALE ACCESS CARRIERS

CREATING A NEW LEGISLATIVE AND BUSINESS ENVIRONMENT TO CATER FOR MULTIPLE WHOLESALE ACCESS CARRIERS

PHIL SMITHPHIL SMITHChief Regulatory Officer

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Telecommunications Legislation

The Government is looking at creating a level playing field so that the private sector has greater opportunities to build and operate telecommunications networks in new developments, either in their own right or on behalf of NBN Co.

Malcolm Turnbull March 2014Malcolm Turnbull March 2014

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Legislative Environment

Since the inception of NBN changes to the rollout

methodology have impacted developers:

• Developers required to design, build and

warrant pit and pipe (“fibre-ready”)

• Choice of FTTP Provider

• NBN Co – carrier of last resort

• NBN Co’s Timeframes in Developer

Agreement is “best endeavours”

• NBN is still only delivering residential

wholesale Internet and telephony services

• Still confusion over <100 and >100 lot

developments

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Strategic Review – released December 2013

“… greenfields deployment is 7 percent

behind Corporate Plan ... “

“… greenfields has been negatively impacted

by the delays in the brownfields … ”

“… greenfields policy … distracts design and

construction resources, delays the broader

NBN Co rollout schedule …”

Strategic Review – released December 2013

“… greenfields deployment is 7 percent

behind Corporate Plan ... “

“… greenfields has been negatively impacted

by the delays in the brownfields … ”

“… greenfields policy … distracts design and

construction resources, delays the broader

NBN Co rollout schedule …”

Current NBN Review ProcessCurrent NBN Review Process

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Strategic Review – continued

NBN Co could advise the developer of NBN Co's

scheduled rollout date

fixed line services within set time frames,

voice services could be provided in the interim under

Telstra's Universal Service Obligation (USO)

NBN Co could then provide broadband in these areas

as part of the general rollout”

“NBN Co could pay the developer a fixed subsidy

build the network to NBN Co's specification then

transfer the network back to NBN Co to operate

Strategic Review – continued

NBN Co could advise the developer of NBN Co's

scheduled rollout date

fixed line services within set time frames,

voice services could be provided in the interim under

Telstra's Universal Service Obligation (USO)

NBN Co could then provide broadband in these areas

as part of the general rollout”

“NBN Co could pay the developer a fixed subsidy

build the network to NBN Co's specification then

transfer the network back to NBN Co to operate


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Bill Morrow(new NBN Co CEO):

will make NBN smaller

pushing parts of its business into the private sector

Key NBN Co network assets will be sold and leased back

the development of housing estates and other so-called

''greenfields'' fibre networks will be handed back to the

private sector

the Telstra and Optus hybrid fibre cable (HFC) networks

… will be acquired and operated to accelerate revenue

growth

Bill Morrow(new NBN Co CEO):

will make NBN smaller

pushing parts of its business into the private sector

Key NBN Co network assets will be sold and leased back

the development of housing estates and other so-called

''greenfields'' fibre networks will be handed back to the

private sector

the Telstra and Optus hybrid fibre cable (HFC) networks

… will be acquired and operated to accelerate revenue

growth

NBN Co opinionNBN Co opinion

Financial Review Report March 2014

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Veritigan Committee

ACCC Submission:

“… there should be no restrictions on the ability of NBN Co or

another network operator to deploy networks in new

developments, including in competition with each other ...”

“… non-NBN Co network provider, structural separation and

constraint on the exercise of market power by this provider is

necessary …”

“… the policies and legislation for deciding which provider

should deploy infrastructure in a new development should be

clear and unambiguous …”

If there is uncertainty … this could lead to rollout delays or

inefficient duplication.”

Veritigan Committee

ACCC Submission:

“… there should be no restrictions on the ability of NBN Co or

another network operator to deploy networks in new

developments, including in competition with each other ...”

“… non-NBN Co network provider, structural separation and

constraint on the exercise of market power by this provider is

necessary …”

“… the policies and legislation for deciding which provider

should deploy infrastructure in a new development should be

clear and unambiguous …”

If there is uncertainty … this could lead to rollout delays or

inefficient duplication.”


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Vertigan Committee Communications Alliance Submission:

ensure a level playing field

enable the deployment of infrastructure that is fit-for-

purpose, cost-effective and responsive to end-user needs

All FTTP providers, including NBN Co, should be responsible

for the design and construction of pit and pipe

The engagement of proven private FTTP providers has the

potential to deliver a more cost-effective solution within

the timeframes that developers demand

Vertigan Committee Communications Alliance Submission:

ensure a level playing field

enable the deployment of infrastructure that is fit-for-

purpose, cost-effective and responsive to end-user needs

All FTTP providers, including NBN Co, should be responsible

for the design and construction of pit and pipe

The engagement of proven private FTTP providers has the

potential to deliver a more cost-effective solution within

the timeframes that developers demand


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Vertigan Committee

Telstra Submission:

It is a policy decision … whether to move away from the current

approach where responsibility is shared between Telstra and NBN Co in

new developments

… facilities-based competition for new developments will not be

economically feasible for third parties unless either developers are

required to fund the full costs of the infrastructure (not just pit and

pipe, as currently is the case) or subsidy is available (which should be

available to any qualified third party operator) …

… a framework for co-operation between NBN Co and third party

builders to reduce confusion about who (or whether anyone) is

proposing to build infrastructure in a new estate: for example, a

nationwide clearinghouse to process developer requests …

Vertigan Committee

Telstra Submission:

It is a policy decision … whether to move away from the current

approach where responsibility is shared between Telstra and NBN Co in

new developments

… facilities-based competition for new developments will not be

economically feasible for third parties unless either developers are

required to fund the full costs of the infrastructure (not just pit and

pipe, as currently is the case) or subsidy is available (which should be

available to any qualified third party operator) …

… a framework for co-operation between NBN Co and third party

builders to reduce confusion about who (or whether anyone) is

proposing to build infrastructure in a new estate: for example, a

nationwide clearinghouse to process developer requests …


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There needs to be change, especially for Greenfield

Developments

Industry and Government support of non-NBN Co

providers

Government and industry support of cost recovery

New models of facilitating non-NBN Co providers to

work with Retail Service Providers are required

There needs to be change, especially for Greenfield

Developments

Industry and Government support of non-NBN Co

providers

Government and industry support of cost recovery

New models of facilitating non-NBN Co providers to

work with Retail Service Providers are required

ConclusionsConclusions

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Creation of a national, carrier-agnostic Operational entity (Op

Co) that will:

Manage the B2B between Wholesalers and

RSPs/CSPs/ASPs

Property database

RSP/CSP/ASP On-Boarding

MSA/SLA Management

CSG Management

Backhaul Management

POI Interconnect Management

Creation of a national, carrier-agnostic Operational entity (Op

Co) that will:

Manage the B2B between Wholesalers and

RSPs/CSPs/ASPs

Property database

RSP/CSP/ASP On-Boarding

MSA/SLA Management

CSG Management

Backhaul Management

POI Interconnect Management

What is Required?What is Required?

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Op CoOp Co

Op Co

L2 WANP

RSP

N x FTTP Co

N xWireless Co

N x Satellite Co

N xHFC Co

N x Greenfield Co

Telstra Optus iiNet GroupM2 GroupTPG Group Smaller RSPs

Wholesale Network Operator Interface

Retail Network Operator Interface

B2B

N xVDSL Co

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All Greenfield FTTP provider including NBN Co

should:

Be open access, wholesale ONLY

Design and construct own pit and pipe to G645:2011

guidelines

Charge a new-connection fee to end-users

Connect to Op Co via industry standard B2B

All Greenfield FTTP provider including NBN Co

should:

Be open access, wholesale ONLY


guidelines

Charge a new-connection fee to end-users



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Government should mandate Greenfield FTTP

Providers to:

Be open access, wholesale only;


guidelines;

Charge a new-connection fee to end-users; and


Government should mandate Greenfield FTTP

Providers to:

Be open access, wholesale only;


guidelines;

Charge a new-connection fee to end-users; and



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Communications Alliance to set and maintain guidelines,

codes and specifications for:

B2B between Wholesalers and RSPs/CSPs/ASPs

Property database

Network topology

Physical wholesaler/retailer/end user interfaces

Communications Alliance to set and maintain guidelines,

codes and specifications for:

B2B between Wholesalers and RSPs/CSPs/ASPs

Property database

Network topology

Physical wholesaler/retailer/end user interfaces


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Technology

Opticomm's Phil Smith at CommsDay Summit 2014