Optus out to stop NBN scope creep

Summary:The National Broadband Network Company's attempt to backhaul all traffic to interconnect in seven state capitals was a huge example of scope creep. It took the firm well beyond the realm of offering last-mile access. Do we need to look out for more?

The National Broadband Network Company's attempt to backhaul all traffic to interconnect in seven state capitals was a huge example of scope creep. It took the firm well beyond the realm of offering last-mile access. Do we need to look out for more?

Maha Krishnapillai, Optus' director of government and corporate affairs, has used the point of interconnect argument to warn of the potential for future scope creep by NBN Co. We're already seeing NBN Co's product set offering varying classes of service — the sort of smarts that most wholesale customers would want to add to the network themselves. Is the new telco moving beyond its remit of offering a pure Layer 2 service?

Krishnapillai was talking this week at the Communication's Alliance Broadband and Beyond 2011 conference in Sydney. NBN Co CEO Mike Quigley also spoke at the conference, outlining the progress of the NBN Co, including the roll-out of first release sites and the reasons for delays in the next round of sites. In effect, the company is building a network of which the design is fundamentally dependent on the detail of the company's agreement with Telstra.

That Telstra agreement is also certainly central to Optus' fears of scope creep, with Optus undoubtedly concerned about the potential for a backroom deal between Telstra and the government. What will be agreed in the interests of getting the paperwork signed in a timely fashion? That's why Krishnapillai mentions the need for an independent adjudicator to be party to all deals and material decisions made by the NBN Co.

There are already concerns about the role politics is playing in some NBN decisions. For example, to what extent was a $24 wholesale AVC (access virtual circuit) price arrived at to give a low-cost headline rate to satisfy the great unwashed? In today's Twisted Wire I question the decision by NBN Co to restrict speeds at all — isn't it a case of retail pricing principles being applied to a wholesale offering?

Building a brand new network with a new regulatory framework is complicated and clearly questions remain unanswered. Questions will continue to emerge as the network is being built. How do we ensure decisions made are in the best interests of the industry and the consumer, rather than just being a convenient short-term solution that suits NBN Co? And does a strict line need to be drawn around the activities of the NBN Co?

Krishnapillai is probably right. There does need to be some sort of body to oversee the roll-out and ensure transparency. Otherwise scope creep is a real issue.

Running time: 27 minutes, 31 seconds

Topics: NBN, Broadband, Optus, Telcos

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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