Greenfields sites will soon become a battlefield for NBN Co, as a cadre of veteran FTTH operators mobilises to compete directly against the taxpayer funded national network builder. And after being ousted from a tender to work with NBN Co on greenfields fibre deployments, the challengers – members of the Greenfield Fibre Operators in Australia lobby group – say they’re already being approached by a number of interested developers.
But the fibre providers are up in arms about elements of fibre deployment legislation currently before the lower house, fearing that it will allow communications minister Stephen Conroy to force NBN Co technical standards across the industry. Instead, the existing commercial operators are calling for independent standards to be formed by the Communications Alliance and ratified by the Australian Communications and Media Authority.
As revealed by CommsDay, the GFOA initially came together late last year with members – initially OptiComm, TransACT, OPENetworks, Broadcast Engineering Services, Comverge, Pivit; and Service Elements – concerned about the threat of competition and potential overbuild from a taxpayer-funded juggernaut.
Opticomm, which had already been engaged by NBN Co to build the FTTP network in Tasmania, was obliged to part ways with the group, and the GFOA’s fears were subsequently mollified by communications minister Stephen Conroy’s announcements that NBN Co would only be the “provider of last resort” that would be able to draw on “a panel of appropriately qualified and experienced providers who can bid to install fibre on its behalf.” The group were invited to participate in a process calling for proposals to join that panel and advise on how to build various FTTP networks for NBN Co.
Now, though, a number of GFOA members including OPENetworks, Comverge, Service Elements and Pivit have been dropped from negotiations over that panel, and are preparing to tackle NBN Co head-to-head. “We intend to compete against NBN Co, given that the legislation does not preclude us [from] doing that,” Comverge MD Peter Saglietti told CommsDay.
“The majority of the GFOA members have now been excluded… the minister mislead us when he said that NBN Co would only be a “provider of last resort” and that the GFOA companies could both compete with NBN Co and still participate with NBN Co in building their network in greenfields,” added OPENetworks MD Michael Sparksman. “By those representations the minister delayed us for five months so that he could pass legislation to make effective competition against NBN Co far more difficult and extract our intellectual property for NBN Co.”
OPENetworks is apparently already seeing developer customers desert NBN Co and look for commercial solutions. “Cost is one aspect of it,” said Michael Sparksman. “There are three [other] reasons why developers are concerned about NBN Co. One is that it’s dependent on a political master for survival; secondly, [developers] have to wait for NBN Co to build in their own time, rather than when the developer wants it; and more importantly, they don’t think it’s going to provide the services that they need.”
“[NBN Co] is delivering asymmetrical services just like a DSL service – and the [charge for NBN’s entry-level 12Mbps/1Mbps service] is A$5 more than a standard DSL port!” put in OPENetworks CTO Chris McKechie. “We were already selling a 25/25Mbps wholesale service at the same cost as an ADSL service.”
STING IN THE STANDARDS: However, the pugnacious fibre providers are wary of a serious obstacle posed within legislation currently before the House of Representatives. The explanatory memorandum to the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011 states that:
“Possible conditions for fixed-line facilities that could be specified in a legislative instrument by the Minister under proposed paragraph 372E(2)(b) include the design of the passive network….the characteristics of components… and installation and operational requirements… it is envisaged, and considered preferable, for these matters to be addressed in industry codes and/or technical specifications determined by the industry. However, in the absence of codes or standards determined by an industry body, the Minister could use this power to specify relevant requirements, including potentially by reference to the specifications of a particular carrier (e.g. an NBN corporation).”
The prospect of enforced conformity to NBN Co’s design standards has the fibre providers up in arms. “It’s essential that existing greenfields operators should be governed by a standard that is not controlled by NBN Co. We need an independent standard ratified by the ACMA,” said Saglietti.
“[NBN Co’s] standards are only suited to their network, not those that are required by commercial developers. Whilst NBN Co can afford to waste public money, private operators such as OPENetworks have to meet sensible commercial budgets and design for a much wider range of services on our networks, such as free to air TV, Pay TV, community and government utility services,” added McKechie. “We are going to talk to CommsAlliance about developing industry standards for greenfield fibre deployments. And we will do that as an association of fibre operators… [so that everyone can] compete on a level playing field, but to a relevant industry standard that is not designed to only meet one operator’s network design.”
“We see [CommsAlliance] as being independent and would welcome their assistance with this important industry wide standard.”