Internode rebuffs Conroy on POI concerns

Internode has firmly corrected Conroy, noting its concerns around the NBN's POI were voiced loud and clear in two submissions made to the ACCC

Internode has firmly rebuffed claims made by Communications Minister, Senator Stephen Conroy, that the ISP’s concerns around the National Broadband Network (NBN)’s proposed Points of Interconnect (POI) should have been voiced earlier.

At an Inquiry into the role and potential of the NBN, Internode general manager of regulatory and corporate affairs, John Lindsay, said claims made by Conroy on ABC television at the weekend regarding Internode’s lack of submission on the issues of the NBN POIs were unfounded.

“What essentially Internode are complaining about is that the ACCC decision to move from 14 POIs - the NBN's preferred position - to 121 POIs, they believe was not the best decision,” Conroy said. “They didn't actually put in a submission to the ACCC's inquiry on this very matter, but as you would be aware there were many companies who argued the exact opposite to what Internode are arguing.”

According to Internode's Lindsay, the ISP did however make a submission in which it noted the anti-competitive impact of the NBN requiring companies to interconnect with the NBN at a large number of locations nationally.

Lindsay pointed the hearing toward the “extensive” submission made to the Australian Competition and Consumer Commission (ACCC) on behalf of the ISP in November last year, in addition to a second submission made on the 1 February this year, following the release of the 121 POI decision.

“This model becomes worse if each access seeker or service provider must provide their own connection to the distant town,” the November submission reads. “There is no economy of scale to be enjoyed and small service providers must either abandon the attempt to service subscribers or acquire a wholesale managed service from a POI more conveniently located.

“The biggest risk to the industry is to entrench a duopoly of retail price competitive service providers and a long tail of uncompetitive providers who slowly, or in fact quickly, implode. The inevitable result would be a rapid increase in retail prices to whatever the market will bear at the lowest access speed the network can provide which would entirely negate the purpose of the NBN.”

Hackett responds to Conroy

During the ABC television interview Conroy further commented on claims made by Internode managing director, Simon Hackett, at the recent CommsDay forum that the NBN Co’s pricing model was “insane” for small ISPs was based only on assumptions.

“Firstly, the critique that Simon Hackett of Internode is using is that a company, a newly establishing company, will want to access all 121 points of interconnect. Now that's an assumption,” Conroy said.

“There's many who would argue that a small start-up company may not want to seek access to all of the 121 sites at the beginning. They would want to grow as a strategy to become a national company.

“So Simon's analysis is based on a number of assumptions. There's nothing wrong with his assumptions, but there are many who would dispute and say that a start-up company wouldn't necessarily try and be a national company on day one.”

Responding to Conroy, Hackett in a statement issued following the NBN hearing said the ISP had “been ringing this bell early and often”.

“Our submissions to the ACCC are on the public record on the ACCC website, so it is rather curious that the Senator is perpetuating this erroneous claim about our conduct in this context,” he said in the statement.

“We seek to correct the record and point out that Internode has been providing public submissions on this and related topics at every step along the process concerned, and it remains of deep concern to us that those warnings are being ignored - not only by the ACCC, but by the Minister being so convinced that this is a new issue that he has not actually bothered to look for evidence of our participation before making his erroneous claims.”

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