The competition watchdog expects to confirm an agreement on the number of points of interconnect with the wholesaler of the National Broadband Network (NBN) in coming weeks, but there are indications the final number of points could grow in future.
Michael Cosgrave, general manager of the communications group at the Australian Competition and Consumer Commission (ACCC), told Computerworld Australia he had hoped for the confirmation process - an internal review of the submission - to be completed by this week, but “very minor issues” had held up its finalisation.
A public consultation process, held by the commission in October last year, sparked discussion on the viability of three possible plans for the establishment of points of interconnect, entailing creation of anywhere between seven duplicated points and up to 800.
Despite NBN Co’s publicly voiced support for the former plan, the ACCC ultimately decided to allow for 120 points, from which fibre will be created to up to 30 fibre access nodes each and from there to 97 per cent of Australian premises.
Though the exact locations of these points remains unclear, it is possible they will be implemented in existing Telstra exchange buildings, an aspect likely to fall under continuing negotiations between the incumbent telco and NBN Co.
However, Cosgrave conceded at an industry conference this week that, despite confirmation of the plan, the exact of points of interconnect is likely to increase in the future at NBN Co’s discretion.
“As you would expect some people have suggested that 120 wasn’t the most efficient deployment,” he said. “Ultimately it’s a question for NBN but I would expect the number to increase at the margins.”
NBN Co chief executive, Mike Quigley, has interchangeably used the phrase “more than 120” and specifically mentioned 122 points of interconnect in Senate estimates in the past week. Some estimates, including those by Optus’ director of government and corporate Affairs, Maha Krishnapillai, indicate the number of points should or could be as high as 137 across the country in order to provide closer interconnection with premises.
Cosgrave explained the changing nature of the number of points as a consequence of the NBN’s legislative structure.
“As you’d expect within certain environments we all face the way in which the NBN will develop, the regulator would not see these [points] as not necessarily being set in stone,” he told attendees of the Communications Alliance’s Broadband and Beyond 2011 conference this week.
“The ACCC would consider that as the NBN rolls out it’s possible and even likely there’ll be demand from either industry as a whole or individual NBN customers for interconnection much closer to the customer.”
Though NBN Co has ultimate discretion over the final number of points, Cosgrave warned that the network wholesaler would be required to set out the criteria on how that is decided in its special access undertaking with the commission, to be submitted once key legislation is passed through Parliament early this year.
The initial locations for the 120 points of interconnection had been decided, according to Cosgrave, based on areas where NBN Co would be in competition with at least two other fibre providers. The potential impact of proposed legislation before Parliament preventing ‘cherry-pickers’ from selecting only lucrative areas to provide wholesale or retail services was not considered in the initial process, he said, but could become a factor in limiting further competition to those points in future.
“[The submission] gives the maximum potential for [competition] to happen,” he told Computerworld Australia. “Whether or not it occurs should be a factor of market outcomes and ultimately whether it’s efficient for people to enter the market.
“I’d never guarantee there would be further entry into transmission markets but what we’ve attempted to do by the decision is give the maximum potential for it to happen.”
PoI debate precedes those to come
In presenting Optus’ view of the debate surrounding points of interconnection, Krishnapillai warned that it would be the first of several debates around key aspects of the NBN and called upon industry “forensically scrutinise” project policy in order to attain the best outcome.
“The points of interconnect issue... really comes down to those philosophical debates around full command, control economy ala Libya-style government intervention to Wild West, do whatever you like type organisations or governments,” he said. “I guess really the key in government policy is trying to work out where to draw that line.
“Today NBN is operating in a governance vacuum - there actually is no real legislative framework in a meaningful way to regulate how the NBN operates.”
Krishnapillai voiced Optus’ support for current legislation before Parliament as a means of resolving the governance vacuum. In agreeance, Cosgrave said continue oversight of the NBN was vitally important.
“We consider that the risks associated with under-regulation are more significant than those which are associated with over-regulation.”
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