A service launched yesterday which will aggregate National Broadband Network capacity across Australia was “no magic bullet” which would completely resolve perceived issues with the NBN’s pricing model, according to Internode managing director Simon Hackett.
The service launched by wholesale and fibre telco Nextgen Networks will combine its own national fibre network and points of presence with a direct connection to the National Broadband Network Company’s own fast-growing networks, allowing small to medium ISPs with a presence in a single datacentre to provide services across the whole NBN.
The launch of the product is already being seen as going some way towards addressing complaints by industry players such as Internode that NBN Co’s pricing model would prove too expensive to allow smaller ISPs to compete in an NBN world.
In an emailed statement yesterday, Internode’s Hackett noted his company was a major and long-term Nextgen customer already, and was evaluating the telco’s offering (alongside offers from other potential aggregators) to cover the part of the NBN between its core and its points of interconnect (PoIs) scattered around the nation where Internode didn’t already have its own infrastructure.
However, he added, Nextgen’s solution only represented half of the NBN pricing puzzle.
“One is backhaul from 121 POI’s to where ISPs’ core infrastructure is; The other is about the NBN Co pricing model from those PoIs onward to customers,” said Hackett. “The announced NextGen aggregation service is an instance of wholesale aggregation for the first of those two pieces.”
“But its not the magic bullet in and of itself, as (a) it covers half of the issue (the piece external to the NBN Co pricing model) and (b) in the end, in both the core-to-PoI paths and the NBN Co pricing model itself, it is, of course, all about the price.”
Hackett said his point was that the cost for ISP traffic to get from core networks to the PoIs would be additional to the existing NBN Co wholesale costs — which were also additional to “existing underlying cost structures for the industry”. As such, whatever fees an NBN aggregator like Nextgen charged would need to be factored into the resulting end user retail prices to actual ISP customers.
“If one had infinite funds,” Hackett added, “Telstra would be a viable supplier here, for instance – except of course nobody does have infinite funds).”
The Internode MD noted it was “early days” for aggregation offerings such as the one Nextgen announced yesterday, and he was sure the company’s offering wouldn’t be the only such to launch in the coming months.
“Given that we’re still a year or two away from many of those POI’s actually being in existence, this is still very much early days for the story – with a lot left to unfold,” he said.
Image credit: Internode