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We recently gave our
customers the opportunity to email their questions on the National
Broadband Network to National Executive, Regulatory & Government,
Carrier and Regulatory, Matthew Healy. The following 'Q&A' is the result of your
questions on the NBN.
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 What has Macquarie Telecom’s involvement been in the NBN to date and will we be
playing any role in the building of the network?
Matthew Healy: Macquarie has played an active role in persuading the Government
to ensure that all Australians have access to high speed broadband services and
to make some fundamental changes to the regulation of the Australian
communications sector. The functional separation of Telstra, the streamlining of
processes for access to wholesale services and the strengthening of the ACCC’s
powers to tackle anti-competitive conduct have all been actively promoted by
Macquarie.
Macquarie, like other retail service providers, will be a wholesale customer of
the new NBN operator acquiring network services which in turn enable Macquarie
to provide services to our retail customers. Macquarie does not envisage playing
any role in the building of the network.
- When is it expected that Macquarie Telecom customers will be able to start
taking advantage of the new speeds? Do you think the estimates on completing the
project are realistic?
The NBN is planned to be completed over eight years. The details of how and when
construction will commence and where and when services will be available have
not yet been worked out. Realistically, it could be five years or more until
services are generally available to customers. The regulatory reforms are likely
to be effective by the end of this year following legislative changes. This is
likely to result in flow through benefits to consumer during 2010 in the form of
lower prices and improved service delivery.
- What are going to be the main advantages of this infrastructure to businesses in
terms of operations?
Australian business will be a key beneficiary of the NBN. With faster broadband
services that are more widely available, businesses will be more productive and
more efficient. For example, high definition video conferencing will become more
readily used saving businesses the direct costs of travel and enabling more
productive use of staff time.
- How do you think this is going to change the ways businesses select a service
provider for internet?
The NBN operator will not be active in retail service provision. Retail
service providers such as Macquarie will be offered wholesale services by the
NBN operator. The NBN operator will genuinely want to provide wholesale services
to retail service providers and will do so on non-discriminatory terms. This
means that retail service providers will compete against each other on the basis
of retail factors, e.g., customer service, brand, price and service packaging.
For businesses selecting a service provider it means that no retailer can claim
to have a better or bigger network. In this context, Macquarie’s personal
accountable service (‘PAS’) and management tools will provide a key competitive
edge.
- Do you see this having impacts for businesses in terms of future planning
their usage and costings?
Past experience shows that user demand for broadband capacity is growing at
an enormous rate and all the indications are that this will continue. Businesses
would be well advised to ensure that they plan for on-going growth in broadband
applications and that they integrate business activities with broadband
applications, e.g., internet sales portals, internet based customer self help.
Hosting services in particular ought to become more important as the NBN is
rolled out as businesses will want to outsource specialist functions in order to
save costs.
- What do you think motivated the decision to build the new network rather than
gap-fill the existing one (for around $30 billion less)?
Australia’s communications sector has for too long been controlled by one
company which has set the form and pace of industry development through
effective control over upstream and downstream activities. Ultimately, this has
not served Australian consumers well as Australia has fallen behind its
international peers in terms of industry development. The government has
listened to the concerns raised by industry players like Macquarie and has
decided to take action to ensure that no single market player will be able to
exercise effective control over sector activity. The cheaper alternative would
rely heavily on incumbent infrastructure and would not address the current
fundamental problems of timely, open and cost based access to wholesale
services. By taking the decision to invest in the NBN the government has sought
to ‘future proof’ the provision of broadband services in Australia.
- $43 billion appears to be a heavy financial burden for Australians to pay. It
represents $2,000 for every person in the country. How is the government
intending to fund this and how will this increased price affect the cost for the
service once rolled out?
The NBN operator will be jointly owned by the government and the private
sector with the government maintaining a majority. No single private investor
will hold more than a 20 per cent interest in the NBN operator. The government
will fund the bulk of its share of the $43 billion through “infrastructure
bonds” offered to the public. Infrastructure bonds are a financial instrument by
which the bond holder loans money to the government for a fixed term and
receives periodic interest payments. On maturity, loan money is returned to the
bond holder. The government will also seed the NBN investment with $4.7 billion
from the Building Australia Fund. While some estimates have been made of the
cost of services to be provided by the NBN, Macquarie considers these to be
purely speculative at this time.
- Now that all Australians will be connected via the one network how do you see
fixed line telecommunications being affected? Do you see technologies such as
SIP becoming the future standard and the demise of the PSTN infrastructure?
The NBN infrastructure will effectively bypass the existing copper access
network which is the key component of the PSTN. As such, the already steep
decline being experienced in PSTN services in Australia will continue. Under the
NBN model, IP based applications will flourish as retailers will have to
differentiate their service offerings to seek competitive advantage.
- How will security be maintained now we will all be a part of this massive
network?
Maintaining security over public communications networks has always been of
utmost importance and will continue to be so under the NBN. Security
arrangements and processes will be addressed when the technical design phase of
the NBN commences.
More information on the National Broadband Network
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free customised information pack including exclusive industry whitepapers,
detailed product offerings and information on the Macquarie Telecom difference.
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