Simon Hackett, the founder of Internode, has been saying for some time that very few companies will be able to afford the cost of providing national coverage with the NBN. It gets down to the Australian Competition and Consumer Commission's decision to overturn NBN Co's plans for just 14 points of interconnect. Instead, to protect the backhaul industry, the regulator insisted on 121 points on the new network, escalating the cost of providing true national coverage.
So, was this ruling behind Internode's decision to be acquired by iiNet? Michael Malone, CEO of iiNet, says Internode was just below scale to operate nationally in a post-NBN world.
But NBN Co's chief executive, Mike Quigley, says the NBN is still a cheaper alternative than building a national network in today's environment. He says we'll have to wait and see how many national customers the new network will attract, but Malone and Hackett reckon it will be in single figures.
That seems a long way from the original vision of the NBN, where a level playing field would be providing opportunities for a wide range of retail providers.
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