Nextgen first with NBN wholesale

Fibre backhaul provider Nextgen networks has trumped the likes of Optus and Telstra in becoming first to announce sub-wholesale products under the National Broadband Network.

The Leighton subsidiary's "NBN Connect" service was launched today with access to the four interim points of interconnect used by NBN Co for first release mainland sites and greenfield developments.

The product would eventually provide access to all 121 points of interconnect flagged by NBN Co for the national network. Retail service providers would connect to Nextgen at one of 90 points of presence it holds at private and large data centres nationally for a "patch and go" connection to the network.

The company said it would provide four tiers of service for a mix of aggregated access to NBN Co's connectivity virtual circuit and Nextgen's own Layer 2 fibre backhaul, which includes the 6000 kilometres of fibre rolled out under the Federal Government's $250 million Regional Broadband Blackspot Program.

The provider has established trials involving the five initial mainland sites, signing up Townsville-based regional provider Internet Solutions as its first customer.

Internet Solutions director Roger King told iTnews the company wanted to put their "foot in the door" on NBN services, with a longer view of pinpointing the points of interconnect to best serve regional users. The company would potentially move to purchasing NBN virtual circuit access directly in future.

The wholesale divisions of Telstra and Optus have both flagged discussions with NBN Co to provide similar aggregation services based on their existing backhaul networks. Both are yet to provide timeframes around when they will begin offering services.

A Telstra Wholesale spokesperson said discussions were continuing with both NBN Co and customers.

An Optus spokesperson did not respond to requests at time of writing.

The integration of a second wholesale layer on top of NBN Co (the sub-wholesale model) is expected to allay fears smaller service providers would be unable to afford or compete under the NBN.

In March, Internode managing director Simon Hackett warned NBN Co's cost model could kill off service providers smaller than 250,000 customers, with further fees from sub-wholesalers such as Nextgen further driving a cost gap between large and small providers.

"Optus and Telstra Wholesale are the only paths through which smaller national players will exist in the NBN world," he said at the Commsday Summit.

"The middlemen will be more deeply entrenched than ever because there will be nowhere else [for small-to-medium ISPs] to go."

Nextgen networks managing director Phil Sykes said the wholesale market would continue to change as NBN Co moved toward the business-as-usual and eventual live state of the network.

"The wholesale definition is evolving; we are in discussions to understand the various aspects of NBN Co's wholesale offering, we're also putting on the table ideas on how that can be improved or enhanced, operational aspects, some pricing aspects," he said.

"Our belief is that making it easy to connect to the entire NBN footprint will give regional service providers the opportunity to expand their business. They might focus in their state but once those barriers are taken away, the opportunity for a regional service provider whether it be business or residential to expand their region to new markets is really what we're focusing on."