09 Sep 2011

The NBN – ready for business?

The NBN’s nine-and-a-half-year rollout is underway. NBN Co. has signed an $11 billion infrastructure access deal with Telstra and the first ISP has released its consumer pricing.

The NBN is a complex beast, and we can expect a fair degree of misunderstanding about its design and features in the business world, at least initially.

At the moment, the two most important things that your business needs to know about the NBN are:

1. The NBN is initially consumer focused

The NBN’s current priority is to deliver consumer services. The network’s goal is to deliver “high speed” broadband to as many premises as possible, at a minimum speed of 12M. But in the locations that the rollout has reached, the levels of speed that businesses typically require are not yet available.

Also unavailable are many of the features that business connectivity requires. Indeed, “high speed business services” (such as seamless inter-office connectivity and support for video conferencing) aren’t scheduled for implementation until what NBN Co. calls Release Three, with “enterprise services” scheduled for Release Four, and “enhanced reliability” for mission critical services not due until Release Five.

By contrast, “emerging entertainment capability” will be delivered in Release Two.

Unfortunately, there is no timetable governing when these business services will come online.

2. Not all connections will be equal

When business-grade connectivity does arrive, however, it will be important for businesses to realise that while all NBN connections will access the same underlying physical network, the services on offer from each provider will be different.

The old mantra that you get what you pay for will apply. That’s because, where the fibre “tails” that will reach your premises are identical in every case, the networks of the providers they connect to won’t be.

In practice, the way the NBN will work is by having large “aggregators” (Telstra, Optus, etc) who will essentially act as wholesalers.

Other companies, including IT vendors, will step in as retailers, and it’s here that most product differentiation will occur. It’s the retailers’ networks that will determine things like guaranteed service levels and contention ratios, and it will be up to retailers to offer features that businesses will need, such as traffic prioritisation, SIP trunking, fail over and levels of capacity and redundancy.

For this reason, businesses that choose NBN connectivity will need to sign-on with providers who they believe will deliver reliable and well-supported services.

So when business grade services finally do arrive, remember that examining only connection speed and cost won’t be to comparing apples with apples. The benefits the NBN will deliver will be a boon for business, but only if you choose your provider wisely.

(This blog post was first submitted on the SmartCompany website on September 8 2011).