nbn the provider of "last resort"

Macquarie Telecom Group senior manager for industry and policy, David Forman, has revealed that nbn is the broadband access provider of “last resort” for the company, citing “unsatisfactory” service and slow migrations.

Forman told the Parliamentary committee reviewing the rollout of the National Broadband Network (NBN) that, while he supported the “philosophy” behind the network, the real-life experience of reselling services to end customers has been somewhat trying.

“At the present juncture, the NBN is our access provider of last resort when we acquire a new customer or when a customer changes the nature of their services,” Forman said at a Parliamentary joint committee hearing on 23 June.

“And the reasons for that are that the experience of migrating a customer to the NBN can be very difficult and very slow, very cumbersome, and the service can be unsatisfactory at the end,” he said.

According to Forman, the services that Macquarie Telecom, as a reseller, are able to acquire from nbn, the company behind the rollout of the NBN, are sometimes not equivalent to the product that end customers  have previously had.

“It’s sometimes simply not available to us, or if it is available it’s too expensive,” he said. “Or, sometimes, it is a non-equivalent service that is still too expensive.”

For Forman, the underlying issues making the NBN a less than desirable option when connecting a new customer has as much to do with the broader broadband industry as it does with nbn’s model for the network.

“Part of the reason, we believe, for the disappointment in the NBN at this juncture has been that the model of the industry that everybody expected and hoped to evolve – which is one with a very robust wholesale market accessing the NBN and providing a very robust retail market – hasn’t evolved the way that we’d hoped,” Forman said.

“[This is], in part, because of the slowness of the rollout and periods of great uncertainty during the rollout about what was going to occur in terms of the current technologies, and the restructure of nbn led to a period of consolidation in the industry,” he said.

Forman pointed out that the local telco industry has seen a number of larger carriers snap up smaller providers, meaning that resellers now have fewer options to choose from when selecting services to resell to end customers.

“That has been compounded for us by the design of the NBN, having 121 points of interconnect,” Forman said.

“If there were people providing access for those and then selling wholesale only services that would be fine,” he said. “At the moment though, in order to reach a national footprint, we have to go to one of those four large aggregators, as we call them, who are all competing for their own retail customers and try and gain access to the NBN via their intermediary services.”

Forman’s response to the Federal Government’s inquiry into the rollout of the NBN echoes Macquarie Telecom’s submission to the Parliamentary committee charged with overseeing the review suggesting that the “slowness” of the and the decision to shake-up the technology mix of the network had created “serious new challenges for competition and restricted choice”.

“There continues to be lack of an effective wholesale market for NBN services,” the submission, dated 31 March, stated. “This disproportionately disadvantages smaller, niche and new entrant retail carriers because wholesale services are required to allow them to use the NBN to deliver competitive retail services.

“This is especially the case in relation to RSPs focused on corporate and business or regional customers,” it said.