Angry telcos welcome NBN change of heart

NBN Co ‘open’ to buying spare capacity from telcos to serve business and government clients.

NBN Co has invited telcos to respond to the consultation paper, with submissions due by February 24.

NBN Co is looking to stop rolling out its own fibre into commercial buildings already covered by existing networks, in a win for telcos angry with the company’s intrusion into the enterprise market.

In an industry consultation paper released on Tuesday, NBN Co said it was open to buying spare capacity from telcos to serve business and government clients.

“To date, while we have usually installed new fibre connections to large customer locations when requested, we have made some limited use of existing fibre when we have done so,” NBN Co chief strategy and transformation officer Will Irving said.

“However, because other network operators may have spare capacity on infrastructure serving some of these locations it may be unnecessary for NBN Co to duplicate the fibre infrastructure serving those premises.”

NBN Co’s approach to rolling out its own fibre into buildings has come under fire from telcos, who are worried about the company using taxpayer funds to outcompete operators.

Vocus Group, a vocal critic of NBN Co’s approach to the enterprise market, has welcomed NBN Co’s announcement, with chief executive Kevin Russell saying it was an important concession. However, he warned that NBN Co’s presence in the enterprise market remains a source of concern for the industry.

“While this is a positive step, it does not address the core issue that NBN is operating outside its wholesale-only mandate by engaging directly with end-users,” Mr Russell said.

“It is critical for the long-term health of the telecoms industry that we have the right environment to support private infrastructure investment.

“It is encouraging to see that NBN is listening to industry’s concerns, and Vocus looks forward to engaging in this consultation process,” he added.

NBN Co has outlined two approaches to picking up the extra fibre from the telcos in the consultation paper.

The first option would see NBN Co expand the existing process of requesting a telco to supply dark fibre connectivity services at specific locations. The second would involve NBN Co running reverse auctions, allowing existing fibre network providers to bid, on a confidential basis, to supply it with fibre connectivity on specific, predetermined standard terms and conditions.

Reverse auctions are typically conducted online. Using specialised software, suppliers submit successively lower bids during a scheduled time period. The supplier with the lowest price wins the reverse auction.

According to NBN Co, the proposed measures allow it to save time and money by making use of existing fibre on the ground instead of rolling out new infrastructure.

However, the company hasn’t ruled out the prospect of driving its own fibre into buildings where it’s more economically viable than buying capacity from telcos.

Mr Irving, who headed Telstra’s infrastructure business prior to joining NBN Co, said the company was paying heed to the feedback from telcos.

“We hear the industry, and this consultation paper explores ways NBN Co might efficiently obtain the use of that existing fibre to serve the needs of business and government customers who wish to be connected using the NBN.”

NBN Co has invited telcos to respond to the consultation paper, with submissions due by February 24.