Quigley prefers contact via gatekeepers

While outlining key parameters for the National Broadband Network (NBN), NBN Co chief Mike Quigley yesterday said he had received so many meeting requests that he has asked for those interested to go through industry representative bodies rather than contact him directly.

While outlining key parameters for the National Broadband Network (NBN), NBN Co chief Mike Quigley yesterday said he had received so many meeting requests that he has asked for those interested to go through industry representative bodies rather than contact him directly.

Mike Quigley

Mike Quigley
(Credit: Alcatel-Lucent)

At an industry briefing, which was closed to media and held in the Sydney offices of law firm Baker & McKenzie, Quigley told a packed room he had been inundated with requests by would-be customers to meet.

According to sources who attended the briefing, Quigley said he would rather them contact him via select industry groups, such as the Internet Industry Association, the Communications Alliance, and born-again breakaway telco advocate group, Terria Access Seekers Association (TASA).

The briefing was attended by the NBN Co's cast of lead executives, including newly-appointed chief financial officer, Jean-Pascal Beaufret, a former Alcatel-Lucent colleague of Quigley. Also in attendance was Tim Smeallie, NBN Co's head of commercial strategy, and "sharply-dressed" head of industry engagement, Christy Boyce, a former McKinsey principal consultant.

Quigley said he had also been inundated with resumes, and jokingly said that over half were from regulatory lawyers.

While Quigley covered much of the detail aired at his first media briefing last week, yesterday he clarified a few of the NBN's boundaries. For example, he didn't expect to build the NBN in central business districts because these were already well-equipped with fibre networks.

He also hinted that the NBN Co would build the NBN's entire backhaul requirements except for inter-capital links, according to the source. Non-inter-city links were not about basic access, but, for example, connecting network components and aggregating nodes for broadband traffic in suburban areas.

Ovum analyst David Kennedy told ZDNet.com.au, if this is the NBN Co's plan, the news would be welcomed by existing network operators that already have extensive backhaul networks. "[Backhaul network operators] want to know whether they will be competing with the government-funded NBN," he said.

Nextgen Networks, which operates around 8500 kilometres of backhaul in both regions, said it was not surprised by the direction the NBN Co was taking in this respect.

"We were expecting this direction, so I'm not surprised by it, but it does give more certainty," NextGen chief, Phil Sykes told ZDNet.com.au. "NextGen's thinking has been that NBN Co would act rationally: it will stimulate competition wherever possible and preserve its investment to areas where there is no competition."

The move would also make sense in terms of addressing Telstra's monopoly over non-inter-capital backhaul where there is limited or no competition. "Telstra has a monopoly on backhaul, so there is a logic in the monopoly part of the market being taken into the NBN Co," said Ovum's Kennedy. "Clearly, a line has to be drawn somewhere [for the NBN Co] and inter-capital backhaul is competitive already."

Quigley on NBN pricing

Quigley outlined that pricing for wholesale access to the NBN would be a matter determined by the Australian Competition and Consumer Commission (ACCC), which, in the Bill announced by Minister for Communications Stephen Conroy, before Parliament now, was to be given increased powers to determine pricing. Previously the ACCC did not have price-setting powers.

While some have questioned why the NBN, as a non-vertically integrated telco would need such powers, TASA spokesperson, and chief of ISP Primus, Ravi Bhatia said he would be happy with this outcome.

"We wanted NBN to have oversight by ACCC. That's one of the Terria principals. My immediate response would be that is consistent, but pricing should be cost-based, and not discriminatory against ISPs. The ACCC should have oversight of prices, and non-price terms and conditions," Bhatia told ZDNet.com.au.

He also saw it as an efficient method of dealing with the 600-odd ISPs in Australia. "How would you expect NBN to negotiate with all 600 of them? And more may spring up," he said. "If it's transparent and open, who can object to this; it's a darn sight better than the system today."

One disadvantage the ACCC will have in determining pricing under the NBN, according to Ovum's Kennedy, will be that it won't have historical commercial negotiations to rely on, meaning that it will be left up to the ACCC's ability to model the NBN's cost structure, which he believed had improved.

Satellite or wireless spectrum?

There appears to be some uncertainty as to what the NBN Co's plans are in terms of spectrum allocation. Last week Quigley had said he would, over the next six months, be negotiating with the government for satellite and wireless spectrum for the 10 per cent of population not covered by fibre.

Yesterday, according to the source, he hinted that may already be in discussions with a company, which he did not name, over satellite slots that had been acquired by an operator under previous NBN proposals. It was speculated that the now defunct Acacia, formerly headed up by Tasmanian NBN Co chief, Doug Campbell, may be the company NBN Co is in discussions with.

Tasmania's leg of the NBN, being jointly built by Tasmania NBN Co and state-owned Aurora Energy, was referred to as a "trial" as opposed to a pilot, suggesting it will be looked to for lessons, but would not necessarily be a model for the NBN on the mainland.