Competition for next-generation broadband in Australia

Articles – The Age

Buy or beware – competitors gear up to do battle with NBN

No NBN price war, despite competition

My Comments

There have been some recent articles about next-generation broadband services appearing in or being planned for particular locales in Australia that compete with the government-backed National Broadband Network.

UK and France offering competitive broadband service

Two countries, namely the UK and France, have established the idea of competitive next-generation broadband after their success with achieving competitive ADSL broadband Internet service. This is because the governments in these countries have worked ahead by establishing a mandatory competitive telecommunications regime including encouragement of local-loop and sub-loop unbundling. They have even ben cited by the European Commission as examples when it comes to broadband-Internet service being competitive and affordable for most people.  

In France, the government have encouraged competitive fibre-to-the-premises service in the form of two methods. The first method is for one or more providers to share infrastructure, especially that which goes “to the door”, while the second method permits a provider or provider coalition to have their own fibre infrastructure “to the door”. That same country also encourages unbundled local-loop ADSL provisioning or “degroupage” in order to see competitive ADSL broadband service.

In the UK, the government is encouraging Unbundled local-loop ADSL provisioning and there are companies who are setting up or planning local next-generation broadband infrastructure in certain cities, towns and villages. These setups, which are based on either fibre-to-the-cabinet with VDSL copper runs or fibre-to-the-premises technoligy, are even being done as a way of giving rural households access to real broadband even though Openreach, the UK company in charge of the wired telecommunications infrastructure, are taking their time to provide this service. As well, Openreach is slowly rolling out a next-generation broadband network that will work on either fibre-to-the-cabinet or fibre-to-the-premises technology.

The Australian next-generation broadband direction

In Australia, regular wireline broadband is provided through one of two methods. Cable-modem broadband is provided by Telstra or Optus in the major capital cities or through TransACT in Canberra or Neighborhood Cable in Geelong, Ballarat or Mildura. These companies own their own cable infrastructure “to the door”. ADSL infrastructure is provided by different retail providers who either resell Telstra ADSL service or through Optus who either may resell Telstra service or use local-loop unbundling. Recently, some other ADSL providers are selling retail ADSL broadband in a “local-loop unbundled” manner with a few offering “naked ADSL” service which doesn’t provide classic landline telephony on the same line.

The Labor Party had started action on the National Broadband Network which is to be a fibre-to-the-premises network covering most metropolitan, regional and rural areas of Australia with wireless and satellite technology to cover the rest. It was also intended to be a replacement for the copper telephone network that is managed by Telstra and there was the idea for Telstra to decommission this copper network and hand it over to the National Broadhand Network authority. This is in a similar manner to how the Openreach entity has come about when it came to provisioning wireline telephone and broadhand service in the UK. Lately, there was a key issue raised about the service being delivered on an “opt-out” arrangement with customers being charged AUD$300 if they don’t have their property connected to the NBN during the actual rollout and want to continue with their classic phone service at their property after the copper network is decommissioned.

TransACT and Neighborhood Cable are offering National Broadband Network their infrastructure at a price that suits them or they will run a competing next-generation broadband service in their operating areas. As well, i3 Group are working with the Brisbane municipal government to set up a fibre-to-the-premises next-generation broadband service in inner-north Brisbane and intend to run it as a competing service if National Broadband Network set up infrastructure there.

At the moment, the main markets to watch when it comes to next-generation broadband are the metropolitan Sydney and Melbourne areas because of them being population centres in Australia. It will be interesting to see whether companies or local governments will set up next-generation broadband infrastructure there in competition to National Broadband Network.

Questions to be answered

One main question that is to be answered is whether it will be feasible for competing infrastructure providers to set up shop alongside the NBN especially in major markets. This includes whether a building landlord or body corporate can have control over the provision of infrastructure for competing service providers.

Another question is whether IP-based broadcasting and voice / video telephony will be controlled on the NBN so as to prevent access to the network by competing IP-based telephony and TV providers. This may be a game changer when it comes to the provision of subscription TV through Australia because it could open up a pathway for retail operators and others to offer competing or complementary multi-channel TV services. It may also affect IP-based telephony providers like Skype or “virtual-network operators” who don’t own their own infrastructure locally but want to provide competing or complementary telephony services.

Conclusion

If there is a desire to see competitive next-generation broadband service in Australia, there will have to be rules and regulations set up to ensure this kind of competition and if the government is serious about this, they should look at what France and the UK are doing to achieve the competitive broadband market there.

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