NBN Co PoI plan could spark network provider compensation demands: Turnbull

Opposition communications minister Malcolm Turnbull says NBN Co's Points of Interconnect plan could strand exisiting network providers

Opposition communications minister Malcolm Turnbull has continued his sustained attack on the National Broadband Network, claiming that NBN Co’s plan to limit the number of points of interconnect (PoI) on its network will “strand” hundreds of millions of dollars of existing private investment in fibre links.

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According to Turnbull, The NBN Co’s proposal to limit the number of PoI — which allow the NBN Co to hand over traffic from its network to the networks of wholesale and retail service providers — will bypass infrastructure that has already been built by private companies.

“These links will be excluded from carrying fixed line traffic if the NBN's plans go ahead,” Turnbull said in a statement. “Not surprisingly the owners of these networks have demanded that the NBN offer compensation.

“In the meantime, further private investment in communications infrastructure in Australia will be reduced because of increased uncertainty and sovereign risk.”

The NBN Co has declined to comment on Turnbull’s claims, the number of PoI it intended to offer and the potential for legal action and compensation, instead referring Computerworld Australia to the ACCC’s discussion paper on NBN CO’s PoI.

Under the NBN CO’s proposed approach for PoI, retail service provider would pay the same wholesale price to serve an end-user customer regardless of the end-user’s location, or whether they are using a fibre, wireless or satellite service.

According to the NBN CO, an ACCC decision on the industry feedback to its PoI discussion paper would help address issues around short and long-term competition impacts of PoI alternatives on the backhaul and retail markets.

It would also help address current and prospective state of competition in the backhaul market, including pricing and the location and value of any assets that may be stranded by the PoI alternatives, and options for addressing any adverse implications (if any) for existing backhaul asset owners.

According to the discussion paper, copper-based exchange service areas (ESAs), which currently operate in some instances as PoI for access seekers who utilise unconditioned local loop service (ULLS) and line sharing service (LSS) facilities, will be replaced by fibre serving areas (FSAs).

“There will be significantly fewer FSAs (700-1000) than ESAs (5000),” the paper reads. “This is driven both by technology differences (greater reach of GPON [Gigabit passive optical network] network), and the fact that NBN Co’s fibre network will cover 93 per cent of premises, which overlays approximately 1900 of today’s ESAs.”

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Tags Malcolm TurnbullNational Broadband Network (NBN)Australian Competition and Consumer Commission (ACCC)point of interconnect (PoI)unconditional local loop service (ULLS)line sharing service (LSS)

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