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TitleReview of the Rollout of the National Broadband Network
LanguageEnglish
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Total Pages159
Table of Contents
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Chapter2
Chapter3
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Dissent
AppendixA
AppendixB
                        
Document Text Contents
Page 1

The Parliament of the Commonwealth of Australia



Review of the Rollout of the National
Broadband Network

Second Report

Joint Committee on the National Broadband Network

November 2011
Canberra

Page 2

© Commonwealth of Australia 2011

ISBN 978-0-642-79575-5 (Printed version)

ISBN 978-0-642-79576-2 (HTML version)


This work is licensed under the Creative Commons Attribution-NonCommercial-
NoDerivs 3.0 Australia License.



The details of this licence are available on the Creative Commons website:
http://creativecommons.org/licenses/by-nc-nd/3.0/au/.



































Cover image courtesy of Thinkstock

Page 79

COMPETITION AND REGULATORY ISSUES 57



access agreements, clearly they have no recourse to the

commission.

The clear intent always was that there would be a framework set

by an access undertaking that would be considered and, if

suitable, accepted by the commission. That access undertaking

would be the framework under which access agreements were

then entered into.107

3.99 The ACCC raised its concern with the NBN Co which responded by

extending its trial agreements until the end of November 2011. The ACCC

preference is that only ‗substantive agreements‘ be entered into, but that

where this is not possible, where access seekers encounter difficulties

under interim agreements, they have recourse to a ‗regulatory backstop‘

with the ACCC.108

3.100 In addition, in response to industry concern about regulatory uncertainty

in the absence of the SAU, the NBN Co recently announced that it had:

...reduced the initial term of its WBA to 12 months and established

a bilateral and multilateral Contract Development Process to

further enhance the long term WBA whilst the SAU is being

considered by the ACCC.109

Competition and Pricing

Background

3.101 In the committee‘s First Report, issues were raised in relation to how the

implementation of the NBN would affect competition at various levels in

the telecommunications industry and more broadly the Australian

economy.

3.102 The main competition issues mentioned in the First Report were the

impact on competition of: the structural separation of Telstra, the

wholesale, open access structure of the NBN, pricing of access to the NBN,

how the use of different broadband technologies may affect the cost and

price of the NBN, and the ACCC‘s decision to increase the number of POIs

from 14 to 121.



107 Mr Cosgrave, ACCC, Transcript of Evidence, Sydney, 25 October 2011, p. 1.

108 Mr Cosgrave, ACCC, Transcript of Evidence, Sydney, 25 October 2011, p. 12.

109 NBN Co, Wholesale Broadband Agreement (WBA), Media Release, 21 November 2011.

Page 80

58 REVIEW OF THE ROLLOUT OF THE NATIONAL BROADBAND NETWORK: SECOND REPORT



3.103 The focus in the First Report was how NBN access pricing and how the

cost of physical capital was impacting on competition among RSPs,

especially small RSPs.

3.104 The RSPs have again expressed concern about the impact on competition

of access pricing under the NBN, the absence of competition in backhaul

in some areas and the impact of the ACCC‘s decision to increase the POIs

from 14 to 121.

Points of Interconnect

3.105 The ACCC stated that its decision that the POIs be increased from 14 to

121 was intended to create greater competition for RSPs. Part of the

ACCC‘s decision-making process for determining POI numbers involved

taking into consideration: existing infrastructure use, existing competition

and the long-term interest of end-users.110

3.106 The ACCC‘s initial determination on POI numbers was based on

maintaining ‗competition between the backhaul providers‘ so that ‗there

was not an over build by NBN Co or existing infrastructure providers.‘

This would need to be balanced by ‗competition between transmission

providers‘ to each POI.111

3.107 The ACCC implemented its approach by:

...recommending that competition principles be adopted and then

worked with NBN Co. to come up with a mechanism, proposed by

NBN Co., which would do two things—firstly, select points of

interconnect where there was already competition between at least

two backhaul providers and, secondly, ensure that there was a

reasonable prospect that those providers would still engage in

competition once the POI was built and that there was an element

of overlay which allowed for an actual network architecture to be

constructed.112

3.108 Through this process, the ACCC proposed that there should be

approximately 120 POIs. The ACCC then asked for industry comment on

its POI proposal and based on comments received, the ACCC increased

the number of POIs to 121. Since then, following negotiation with Telstra,

there have been ‗a few minor variations‘ to the location of POIs. Location



110 Dr Robert Nicholls, General Manager, Convergence and Mobility Branch, ACCC, Transcript of
Evidence, Sydney, 25 October 2011, p. 2.

111 Dr Nicholls, ACCC, Transcript of Evidence, Sydney, 25 October 2011, p. 2.

112 Dr Nicholls, ACCC, Transcript of Evidence, Sydney, 25 October 2011, p. 2.

Page 158

136



Department of Broadband, Communications and the Digital Economy

Mr Daryl Quinlivan, Deputy Secretary, Infrastructure Group
Mr Daniel McCarthy, Assistant Secretary, National Broadband Network
Implementation Division
Ms Pip Spence, First Assistant Secretary, National Broadband Network
Implementation Division

Department of Finance and Deregulation
Ms Stacie Hall, First Assistant Secretary

Ms Jan Mason, Deputy Secretary

Mr Philip Smith, Assistant Secretary, National Broadband Network Policy and
Shareholder Branch



Monday, 24 October 2011 – Sydney

NBN Co Limited

Mr Mike Quigley, Chief Executive Officer

Department of Broadband, Communications and the Digital Economy

Mr Peter Harris, Secretary
Mr Daryl Quinlivan, Deputy Secretary, Infrastructure Group
Mr Rohan Buettel, First Assistant Secretary, Networks Policy and Regulation
Division
Ms Joanna Grainger, Assistant Secretary, National Broadband Implementation
Division
Mr Brian Kelleher, Assistant Secretary, Networks Policy and Regulation Division
Mr Philip Mason, Assistant Secretary, National Broadband Implementation
Division
Ms Pip Spence, First Assistant Secretary, National Broadband Network
Implementation Division

Productivity Commission

Mr Michael Woods, Deputy Chairman

Asia Pacific Consulting Group

Mr Baldeep Gill, Director

Page 159

APPENDIX B – HEARINGS AND WITNESSES 137



Singtel Optus Pty Ltd

Mr Maha Krishnapillai, Director of Government and Corporate Affairs
Mr Andrew Sheridan, General Manger, Interconnect and Regulations

Internode

Mr John Lindsay, General Manager, Regulatory and Corporate Affairs

Vodafone Hutchison Australia

Mr Matthew Lobb, General Manger, Industry Strategy and Public Policy
Mr Klass Raaijmakers, Head of Broadband Strategy


Tuesday, 25 October 2011 – Sydney

Australian Competition and Consumer Commission

Mr Michael Cosgrave, General Manager, Communications Group
Mr Richard Home, General Manager, National Broadband Engagement and
Group Coordination
Dr Robert Nicholls, General Manger, Convergence and Mobility Branch
Mr Mark Pearson, Deputy Chief Executive Officer, Regulation

Australian Communications Consumer Action Network

Ms Teresa Corbin, Chief Executive Officer
Mr Jonathan Gadir, Senior Policy Adviser

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