Telstra warns exchanges not ready for NBN PoIs

Industry agrees Telstra exchanges best choice for NBN, but the wholesaler may have to replace many buildings

NBN Co could be required to replace or refit more than 60 Telstra exchanges in its bid to roll out the National Broadband Network (NBN), Telstra has warned.

It is believed NBN Co and Telstra are in continuing negotiations around the use of the telco’s existing exchange buildings to be used as points of interconnect as part of the $9 billion financial heads of agreement between the two parties, to be put to shareholder vote and the competition watchdog by 1 July this year.

The Australian Competition and Consumer Commission (ACCC) this week confirmed that 121 points of interconnect would be used to connect fibre backhaul to fibre area nodes under the NBN, slightly altering the 120-point semi-distributed model agreed to by NBN Co in its negotiations with the competition watchdog.

However, in a submission around the confirmation process, Telstra warned that “over half” of the exchanges flagged for use in the rollout of the network were not yet suitable for use and would require additional investment and extensive work to refit or expand the telco’s infrastructure for use in the network.

As an example, Telstra pointed to exchanges flagged as potential points by NBN Co in New South Wales and Queensland, both of which had insufficient space and would require expansion.

“In order to avoid any unintended and undesirable outcomes in the location of POIs... the ACCC should look to adopt a more flexible approach for identifying POIs, which incorporates greater technical and commercial considerations into its criteria,” the submission (PDF) reads.

“The selection of the POI location could be done on the basis of the commercial requirements of NBN Co and its future access seekers’ requirements within a geographic location, which supports the targeted competitive outcome on backhaul from that POI position.”

Rival service provider Optus also agreed with the use of existing Telstra exchanges as points of interconnect in its submission to the ACCC but recommended NBN Co revise its choice of exchanges based on the number of services already provided out of each location, as it would provide a better estimation of its suitability.

According to the ACCC, NBN Co will likely build its own facilities in areas where Telstra exchanges are not sufficient, which it will advise to the competition watchdog.

An NBN Co spokesperson told Computerworld Australia the wholesaler was assessing the need for potential new facilities on a location-by-location basis.

The list of 121 points of interconnect confirmed by the ACCC and NBN Co come a week after initially expected by the competition watchdog, which forced the network wholesaler to move away from its preferred model of seven duplicated points of interconnect in order to encourage competition among backhaul providers.

However, the list was stressed as “initial” by the commission, with every expectation NBN Co will increase the number of points as the network is rolled out.

As recently as last week, NBN Co chief executive, Mike Quigley, said a potential 122 points of interconnect would be used.

It is expected a set of criteria will be agreed between the ACCC and NBN Co when the wholesaler lodges a special access undertaking later this year. Of the submissions handed to the ACCC by industry during the confirmation process, the majority held concerns around the lack of clarity of how the wholesaler would choose additional points.

“While [ACCC] has identified that more POIs could be established closer to the end user, it has not yet mandated any process to achieve this and at this stage has only advised on a process that ‘could’ occur over the long term to determine additional POIs,” backhaul fibre provider Nextgen networks said in its submission (PDF).

ACCC advised in confirming the list of points of interconnect that alternative points would be located in areas whether there are more than two competitive backhaul providers - likely Telstra plus one other - and would be in an original exchange serving area as indicated by Telstra’s original planning rules.

The watchdog will maintain an updated list of points, but will not seek confirmation from industry as NBN Co revises or adds to the list.

Most industry submissions were favourable of the semi-distributed model of more than 120 points of interconnect but Internode carrier relations manager, John Lindsay, blasted the approach as putting network redundancy at risk.

“In one hit the ACCC has managed to remove the last of the access network protection for voice services,” he wrote in a submission from the service provider (PDF). “By moving to a large number of POIs the opportunity to build effective protection is lost.

"In the event of significant natural or unnatural disasters hundreds of thousands of network users will be left without any fixed line service at all.

“What is more, as mobile operators shift their backhaul traffic to the NBN mobile services are likely to be disabled too.”

Follow James Hutchinson on Twitter: @j_hutch

Follow Computerworld Australia on Twitter: @ComputerworldAU

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Tags NBNTelstraNetworkingnbn cooptusNational Broadband Network (NBN)Australian Competition and Consumer Commission (ACCC)NextgentelcosPoIs

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