NBN Co's POI good for the little guys

Following strong opposition to the National Broadband Network Company's (NBN Co's) proposed points of interconnect (POI) for the network from the country's biggest telcos, a number of small ISPs have welcomed the model.

A POI is where two networks meet and exchange information. For the NBN, this is where NBN Co passes on data carried over the national network to the internet service providers' networks. Where the points of interconnect are located determines how much backhaul a provider would have to supply 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.

Following the joint release of a discussion paper by NBN Co and the Australian Competition and Consumer Commission (ACCC) last month, Telstra, Optus and AAPT were all critical of NBN Co's proposed model for 14 POI in major cities, and an additional 195 as required around the country.

Smaller ISPs, however, have warmed to the proposal. Internode in its submission said having a POI in every capital city such as the one outlined in NBN Co's proposed model would be ideal for competition.

"Internode's preference would be for each state to have a single capital city POI with a second redundant site for reliability. In addition, access to all downstream sites from deeper POI would be highly desirable, but only on the basis that access seekers could 'cherry pick' such sites," the submission stated. "An all-or-nothing approach would be catastrophic because it would never be economic for any carrier to build a new backhaul network to every additional POI."

Today, wholesale broadband provider ispONE has also come out in favour of NBN Co's POI approach.

"The NBN Co's proposed 14 POI has a flow on effect that supports the smaller end of the [retail service provider] market, and lowers barriers to entry for providers that would have been locked out by heavy infrastructure costs," ispONE managing director Zac Swindells said in a statement. "This includes the cost of rolling out backhaul, hardware and collocation facilities to almost 950 [fibre serving areas] under the NBN Co's first option, or up to 195 Connectivity Serving Areas under option number 4."

Swindells said a reduced number of POI would allow retailer carriers to offer services direct to users rather than having to aggregate through major carriers.

"This proposal will result in a uniform wholesale pricing model allowing greater access to end users for regional and rural providers, and smaller niche players. In essence, the proposal will further enhance competition in delivery of services to the end user, and level the playing field for all RSPs nationwide," he said.

The man responsible for NBN Co's proposal, the company's general manager of design and planning, Peter Ferris, noted the limited praise for the design.

"One of them I note was saying that the solution proposed was an elegant engineering solution. I take that as a compliment because I invented it," Ferris said today at the IQPC second nation Smart Grids forum in Sydney today.

Ferris said he understood why the bigger companies had been so vocal in opposition and called for the smaller providers to make their opinions known.

"The guys with transmission, they have obviously said they don't want it because for them it changes their business model and takes away a chance for them to make more money," he said. "It's unfortunate we haven't had the 600 registered internet service providers speak up and say this gives us an opportunity to deliver ubiquitous price across Australia."

Ferris said the existing state of backhaul showed the need for NBN Co to fill the gap.

"If the backhaul network in place was good, you wouldn't have to pay NextGen to put it in," he said. "You can't make money on backhaul."