NBN Co has developed a rough architecture for the build-out of the National Broadband Network in an attempt to keep ISPs and carriers in the loop as to how their services will intersect with it.
Responding to questions posed by iTnews, NBN Co chief executive Mike Quigley said the company has "put a stake in the ground" as to how and where the NBN and the operations of retail service providers will interconnect.
NBN Co intends to build a GPON (gigabit passive optical network), providing Layer 1 and Layer 2 of the network, leaving layers 3 and above to service providers.
In the OSI network model, Layer 1 refers to the provision of bit stream (in this case, light) across the fibre. Layer 2 refers to the encoding and decoding of this light into bits. The five layers above refer to switching and routing, connections, security, applications and quality of service.
In other words, NBN Co wants to offer very little more than the most basic physical layer - enabling service providers access in such a way that it almost feels like they are using their own network.
"Where we see the network boundary at the moment - we see ourselves as providing a Layer 2 bit stream type service," Quigley said. "The service will have the functionality to cover voice, video and high speed Internet - only with the service provider, rather than NBN Co, providing these services."
Quigley said he would expect the NBN Co's domain to "end at an Optical Network Terminal (ONT)... on the side of the house."
This ONT, a modem built for fibre networks, is likely to feature several Ethernet ports so that it can support multiple service providers if need be, and also incorporate POTS connectivity - such that it can also be used for traditional telephony.
NBN Co intends that this outdoor terminal will connect back into the network via a splitter (which connects an optical fibre distribution frame to multiple premises), which in turn connects into the Ethernet aggregation network.
From here, NBN Co hands off to retail service provider to provide applications and content.
Quigley said that access to the network is likely to be sold to service providers via a combination of fixed cost (per user) and variable costs (connection speed and Quality of Service attributes).
Quigley emphasised that the plans to date are merely "stakes in the ground", and that his final decisions will depend on feedback from service providers.
"It's very important as we design the network that we get their input in," he said. "At the end of the day they are potential customers."
Two equipment vendors
NBN Co also intends to use just two networking equipment vendors to gain a good price on networking kit while reducing supply chain risk. Products will be chosen on the basis that they adhere to global standards - to ensure both good prices and interoperability.
"We will go through a process of expressions of interest and assess the capabilities of the technologies," Quigley said. "We'll aim for a shortlist which will come down to two primary vendors."
The two primary vendors will be asked to "resolve interoperability issue" between their products by building an integration layer, he said.
At the systems layer, Quigley expects a single vendor to be selected, working with partners. But for the build of the physical network, he expects numerous private contractors and sub-contractors to be
Read on for information on roles, prices and timetables...
Quigley also provided some clarity around the differing roles of the Federal Government, the Lead Advisor (KMPG and McKinsey) and NBN Co.
While the Government will handle telecommunications regulation, funding and strategies around Greenfield sites, the lead advisor will look at market structures, service definitions, business cases and commercial negotiations.
NBN Co, meanwhile, will engage with the industry around developing wholesale access model, selecting technologies and devising a rollout plan.
The end game
The end game, Quigley said, is around accessibility, competition and cost.
"We want broadband across the nation," he said. 'Second, we want to have competition - a level playing field across the industry. It is quite clear from the regulatory submissions process that there was some dissatisfaction with the way the industry is structured. And third, this all has to be done while minimising costs."
Quigley said NBN Co is sticking to the cost estimates and timeline set by the Government.
"There have been a number of reports written on timing and business case," he said. "All have some assumptions in them. We haven't moved away from Government commitment to have this job done within eight years.
"People are going to be frustrated that it doesn't seem to have started straight away. You don't build a bridge by putting the spans across first up. You build the foundations."
Quigley said the eight year timeframe is for the network's completion, but it is important to note that customers will be progressively coming onto the network earlier as it is built out.
Those customers, he said, will be offered prices that reflect current market values.
"I know there has been lots of discussions about prices. The reality is we have to be priced to meet the market. Why would a customer move from a service to a more expensive service unless there is real value?"
The way forward
Quigley said he and the staff at NBN Co would spend the next six months completing the build of the organisation, designing a wholesale model, selecting the technology and designing the network.
By the time the six months is up he also "expects to be well underway to reaching an understanding with ACCC for the wholesale network, be in pricing architecture discussions with customers, conducting tender processes and negotiating spectrum satellite slots for folks not covered by fibre."
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