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OpenNet: IDA's new minimum service standards unfair

Consortium tasked to build Singapore's nationwide fiber network to appeal against new quality of service framework imposed by regulator, says is hard to meet and rewrites its original contract; regulator refutes claims.
Written by Ryan Huang, Contributor

Network company (NetCo) OpenNet has appealed against the new quality of service (QoS) standards over its performance imposed by regulator Infocomm Development Authority of Singapore (IDA), claiming the minimum timeframe set is hard to meet and rewrites its original contract.

OpenNet is the consortium appointed as the NetCo responsible for building the fiber infrastructure of the country's next-generation nationwide broadband network (NBN), but has run into public criticism over delays in activating connections for residential areas and businesses.
Must fulfill 98 percent of residential orders within 3 days
The regulator's latest move to improve the rollout of the network which it revealed on Thursday, requires OpenNet to fulfill 98 percent of residential orders within three working days, and to fulfill all orders within seven days. For non-residential buildings, OpenNet is required to complete 80 percent of orders within four weeks, and fulfill all orders within eight weeks.

IDA can impose a fine of S$10,000 (US$8,022) per breach each month, with additional penalties for serious breaches, or continuing or repeated breaches.
OpenNet said that the latest regulatory move "rewrites the original NetCo contract", and to preserve the sanctity of contracts, changes to the NetCo contract should be done through contract variations mutually agreed to through negotiations.

The NetCo added that the QoS will require it to provide an amount of capacity that cannot be predetermined.

"This leaves OpenNet to either default on the QoS or to hold on standby a very large workforce which will in most times not be used. For OpenNet, neither defaulting nor holding a large amount of commercially unsustainable spare capacity is a viable option," the NetCo said in its statement.

Last month, OpenNet had submitted a request to IDA to reconsider certain parts of its directives in the NetCo's revised contract finalized earlier in July.
An OpenNet spokesperson had said: “We are supportive of IDA’s directives. To implement the directives will require extensive changes to existing IT systems, we will require more time, beyond the period that IDA has imposed, to implement the IT changes safely. We are currently in consultation with IDA to implement the IT changes within a timeframe acceptable to both parties."
IDA defends new QoS
In response to OpenNet's plans to appeal, IDA defended its latest move to set a QoS framework on its performance. A spokesperson told ZDNet Asia on Thursday that OpenNet was aware of its licence obligations and the new standards were "not intended to mirror, substitute or vary" the activation obligations for residential and non-residential users under its contract, also known as the Interconnection Offer (ICO).
"The QoS framework, which is independent of the ICO, is an aggregate performance obligation owed directly by OpenNet to IDA as an [facilities-based operator] licensee," an IDA spokesperson pointed out.
The IDA added that a consultation was held with the industry--including OpenNet--in March this year, before it issued its final decision on 20 July.

95 percent national coverage on track?
Separately in response to queries from ZDNet Asia, OpenNet said that it was "in the process of finalizing its 95 percent rollout with the IDA", referring to its rollout timetable to achieve nationwide coverage of 95 percent by July 2012.

"We look forward to making an announcement in this regard in the near future," said Daniel Ho, director of business development and communications at OpenNet.

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