Is the NBN building a regional divide?

Summary:Was the deal between Telstra and the National Broadband Network Company (NBN Co) just another nail in the coffin for a broadband strategy that is going to miss out on its main objective?

Was the deal between Telstra and the National Broadband Network Company (NBN Co) just another nail in the coffin for a broadband strategy that is going to miss out on its main objective?

The government has always indicated that one of the key aims of the NBN is to ensure that users in regional Australia have the same level of access to those living in the capital cities. Simon Hackett, CEO of Internode, has argued a lot lately that having too many points of interconnect (PoIs) will mean that smaller providers will not be able to afford to hook up the NBN in regional locations, because there won't be enough customers to warrant the expense. That will leave residents with the choice of just one or two big players.

There's also the issue of backhaul. Whilst the Australian Competition and Consumer Commission (ACCC) recommended that PoIs should be located where there is a contestable backhaul market, is the existence of two providers enough to ensure the best wholesale price? Particularly if the assumption is now that the decommissioning of its copper network removes the need for the full separation of Telstra.

And what commercial terms have been agreed in the deal with Telstra? We know the NBN will provide last-mile access at the same price to everyone, but what are they buying from Telstra in the way of backhaul and other network services — and at what price?

Simon Hackett says that the full commercial terms of the agreement should be available for everyone to see. After all, it's taxpayer money being spent here.

So, the question is: does the ACCC need to reconsider its decision on the location of points of interconnect? Or is it too late? Has it all been ratified by the signing of the agreement with Telstra?

Also this week, my thoughts on Virgin Mobile's new "Fair Go" campaign. Why do mobile phone companies have such difficulty in making life simpler?

Topics: NBN, Broadband, Telcos, Telstra

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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