NQ Telecom: Give small ISPs direct access to NBN

NBNCo should allow small ISPs to band together for direct access of the NBN, according to small regional ISP

NBNCo should allow small ISPs to band together for direct access of the National Broadband Network (NBN), according to North Queensland Telecom managing director, Jeremy Moffat.

He was speaking at a parliamentary inquiry on the potential uses for the NBN in Townsville, one of the first release sites for the broadband network.

NQ Telecom is a small-scaled ISP focusing on the North Queensland region. The company doesn’t own broadband infrastructure and relies on buying wholesale capacity.

When the original plan to use 14 points of interconnects (PoI) was bumped up to 120, it made it more difficult for smaller ISPs to gain direct access to NBN wholesale services.

ISPs are required to install their own equipment and pay a connection fee to NBNCo at each PoI to use NBN services directly. According to some industry pundits, this will not be financially viable for ISPs unless they have a large customer base.

The decision was made by the ACCC.

This gripe has been raised by Internode chief, Simon Hackett, at this year’s CommsDay Summit claiming NBN Co’s pricing model would kill off small ISPs especially those in regional areas.

Smaller players have an option to connect via a third-party such as Telstra and Optus, with the later already making plans to offer wholesale NBN aggregator services.

NQ Telecom saw this arrangement as undermining the NBN’s primary objective of levelling the playing field in the ISP market.

“The competitiveness of what we are going to offer is under question if we are going to have to buy through a third-party that may not necessarily play the game and offer predatory prices,” Moffat said to the parliamentary hearing. “… Even some of those bigger guys like iiNet and Internode are at risk of going through a third party such as Telstra to continue business.”

The Government should consider opening up a separate channel on the NBN to allow small ISPs to join forces to make up customer numbers and access the network directly.

“We are not looking for a handout,” Moffat said. “We would expect to pay for the access and appropriate setup fees on a pro-rata basis.

“I think if somebody was to canvas other small ISPs around the country, they would agree.”

According to an iiNet report, the number of ISPs in Australia has shrunk from 450 to 250 in the past year.

Moffat claimed small ISPs have been overlooked by the Government and NBNCo has not put in any effort to communicate with the smaller players like NQ Telecom.

“Moving forward on a Government-owned product, ISPs such as ourselves should be allowed to buy direct access so we can compete on the same level playing field as the bigger guys,” he said.