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NBN retreats from directly signing enterprise customers

Government-owned broadband wholesaler to behave more like a wholesaler again.
Written by Chris Duckett, Contributor

The company responsible for deploying the National Broadband Network (NBN) across Australia announced on Thursday that it would step back from directly signing up enterprise customers.

NBN has come under intense criticism from retailers for entering into contracts with end-users, which culminated with Vocus advocating for NBN to be structurally separated if its direct sales team was not binned.

"NBN Co will evolve its enterprise contracting model so that RSPs will in all cases have the direct contractual relationship with enterprise customers," the government-owned broadband wholesaler said.

"Previously, NBN Co has at times contracted directly with enterprise customers to build connectivity ahead of those customers engaging one or more RSPs to provide operational broadband services."

The company added that it would publish a consultation paper by February 7 on how it would hand off any sales leads with industry, and would continue to "engage" with enterprises to understand requirements and "educate and stimulate demand" for NBN services.

In an October hearing, NBN defended its practice of directly dealing with customers, saying it was different to offering carriage services.

Macquarie Telecom welcomed the move of NBN to continue talking to enterprises.

"While a number of tier one telcos have been calling for NBN to exit the enterprise market altogether, we believe these calls are based on self-preservation and a desire to push their own fibre rather than the interest of Australian businesses, and we applaud NBN Co for taking appropriate action rather than bowing to these demands," Macquarie Telecom group executive Luke Clifton said.

"The issue of price gouging is still alive and well for businesses across Australia. NBN's enablement of new providers in an underserviced and overpriced market is vital to change that and help organisations develop the infrastructure network and digital services they need."

NBN was formally warned in October for providing special terms to Macquarie Telecom. The same month, NBN said the Australian Competition and Consumer Commission found there was no commercial harm because the pricing information concerned was released to the wider market "well in advance" of the product being made available.

Earlier this week, NBN opened consultation on the possibility of using dark fibre for customers served by existing networks.

"As has been noted by a number of network operators and industry commentators, in certain circumstances the goal of encouraging economically efficient use of, and economically efficient investment in, telecommunications infrastructure may be better served by NBN leveraging existing fibre network infrastructure where the current owner is willing to sell access to that fibre, and it meets NBN's operational and commercial requirements," said the discussion paper released on Tuesday.

"Accordingly, NBN is interested in establishing an industry-wide process for procuring from third party fibre network operators dark fibre connectivity services that meet NBN's requirements in order to facilitate the efficient supply of NBN's suite of wholesale [and] layer 2 services to business customers (including but not limited to the NBN Ethernet TC2 service and NBN Enterprise Ethernet service)."

NBN currently makes use of managed backhaul services, as well as dark fibre from third parties to serve around 700 multi-dwelling units (MDU) around the country. When NBN identifies an MDU, it currently asks a panel of providers for a quote, but this process would be unable to scale, NBN said.

The broadband wholesaler said it currently upgrades a connection by installing new fibre, regardless of whether it is already served by another network.

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