The National Broadband Network Company (NBN Co) and the Australian Competition and Consumer Commission have jointly released a discussion paper calling for comments on its proposed points of interconnect (POI) for the National Broadband Network (NBN).
In the discussion paper (PDF) released last night, the company called for feedback on its proposals on where exactly to allow retail service providers or wholesale providers to connect to the NBN.
The POI is where two networks meet and exchange information. For NBN Co it would mean where it passes on data carried over its networks to the internet service providers' networks. Where that is located determines how much backhaul a provider would have to supply themselves in order to connect customers to the NBN. How much backhaul the supplier has to provide has a significant impact on the price of the service it can offer consumers.
There are a number of options discussed in the paper, including one model with POIs in extended fibre areas. This would require all retail service providers to provide their own network backhaul to carry traffic from the fibre serving area to their network. NBN Co indicated this model would ultimately lead to a divergence in costs between regional and metropolitan areas because the retail service providers would have to incur the costs of the backhaul themselves.
On the other end of the spectrum, having POIs only in capital cities would limit competition and the level of access to the network that wholesalers and retail service providers could get.
Potential locations for POI (Credit: NBN Co)
Of the different models for POI, NBN Co has indicated in the discussion paper that it favours a plan of having a composite model comprised of 14 aggregate points of interconnect in each major city of Australia. This would consist of four in Sydney, four in Melbourne, two in Brisbane, two in Adelaide and two in Perth.
From there, NBN Co indicated there was the opportunity for the network to have up to 195 additional POI at "connectivity serving areas" around Australia where required for either location or technical reasons where deeper connectivity to the network is required. The paper listed 195 potential points of interconnect.
NBN Co said in the paper that it favoured this model because it was the "most effective option as it provides uniform national wholesale pricing, facilitates the highest level of market uptake, and enables [retail service providers] to connect closer to the edges of the network than capital cities".
The model, it said, would encourage a wider take-up of NBN services and would make it easier for new players to enter the service provider industry while at the same time ensuring level pricing for service in regional and metropolitan Australia.
"In carrying out its analysis of options for the location of POIs, NBN Co has sought to identify the best solution for implementing the government's objective of uniform national wholesale pricing," NBN Co CEO Mike Quigley said in a statement. "NBN Co recognises, however, that there are many factors that need to be considered in making a decision on POI location, so we are very pleased to be supporting the ACCC's consultation process on this important industry issue."
Submissions for the paper are due by 8 November.