Optus looks to fill the Coalition's NBN gap

As the Coalition begins to scope changing the National Broadband Network (NBN) from a majority fibre-to-the-premises (FttP) design to majority fibre the node (FttN), Optus has said that it is open to alternatives to using Telstra's existing copper line to connect their customers from the node to the premises.

Coalition communications spokesperson Malcolm Turnbull this week reaffirmed the Coalition's plans to conduct an audit of NBN Co and complete a cost-benefit analysis to determine the best way forward, which will likely lead to following the Coalition's policy for an FttN NBN for 71 percent of Australian premises.

Before that work can be started, the Coalition will need to renegotiate with Telstra to access the last section of copper from the node to each premises to connect to the NBN. But Telstra's biggest rival, Optus, which has criticised the level of payments that Telstra is receiving as part of the NBN project, is looking at potential alternatives.

The Australian reported last week that Optus would look to pay for the fibre from the node to the premises for customers signing on to two-year contracts. While Optus' vice president of regulatory affairs David Epstein would not confirm the story, he indicated that the space for telcos to pick up NBN services from the node would not be limited to just fibre, and could potentially incorporate other technologies, including mobile services such as long-term evolution 4G.

"There is folly in being purely technology channel driven when you're debating telecommunications. The real debate should be what is the actual outcome of the system. What is the outcome for the customer regardless of the technology," he said.

"I think there will be room for all sorts of opportunities under how the Coalition has sketched out its vision for the NBN. In some areas, it will make sense to continue to have [FttN] or there may be room for resellers of the NBN or private providers to fill the gap between nodes and premises by varying ways."

The NBN should now be seen as a "network of networks", Epstein said, removing the focus solely from being a single network to one that is made up of different technologies that best suit the location or premises.

"To date, the debate has focused on the high end fibre element of the NBN. The NBN has always been a multi platform network in that there is fibre, there's satellite, there's fixed wireless. The additional element is that it may well incorporate other architectures and other sub networks," he said.

"I suppose what we've all got to see is what is the shape of that. That determines our product offering, and that will determine to some degree our future regulatory agenda."

Epstein said that the change of government had long been expected, and that Optus' relationship with Turnbull had been very good during the years he was in opposition.

"We don't anticipate any radical changes of direction or surprises. We've enjoyed a very good relationship with Malcolm Turnbull and his office to date. They've been very consultative in opposition, and the initial trends are that they are continuing that in the transition to government," he said.

He said that the new Coalition government could now move to focus on the regulatory environment, which had been sidelined by the debate between Labor and the Coalition over the NBN.

"We do think there needs to be a more sophisticated debate around the impacts on industry cashflows of NBN infrastructure spending and on the industry cost base," he said. "And we do think there needs to be a renewed vigour in the debate around wider industry competition and access issues."

Optus, along with other industry competitors such as iiNet, have lobbied the Australian Competition and Consumer Commission (ACCC) in the last month to look at enforcing better regulation of access to Telstra's duct infrastructure, for which the telcos have argued Telstra charges much more to access than it costs to maintain the ducts.

Access to the ducts will not only be required for existing networks, but will often be needed under the NBN, with NBN Co leasing access to Telstra's ducts as part of its deal. Telstra has argued that regulation should remain as is, and that issues over access to ducts were resolved several years ago.