NBN Co had argued that the 14 PoI model would have made it easier to offer a uniformly prices wholesale service across Australia by enabling it to cross-subsidise rural backhaul from more profitable urban services.
NBN Co says it "placed priority on achieving minimum wholesale input costs for access seekers, eliminating any single point of failure above the fibre distribution hub and providing for rapid traffic growth in all backhaul links due to increasing video applications." And it now has to backtrack on much of its network planning which had been based on its preferred 14 PoIs.
However, the ACCC was highly critical of NBN Co's 14 PoI proposal. In the advice given to the government on 30 November, released today, it said: "The ACCC is concerned that the implementation of either a composite or centralised approach [to determining the number of PoIs] would represent a significant degree of 'mission creep' in relation to NBN Co's objective to 'occupy as small a footprint as possible in the overall value chain'."
Further, the ACCC said: "The extension of NBN Co's network beyond the access network (which is generally considered to be a natural monopoly or a 'bottleneck') to also include a transmission network (which otherwise demonstrates competitive characteristics in some geographical areas) would represent a considerable departure from regulatory orthodoxy - namely that regulation should only focus upon markets where competition is not effective."
The new 120 PoI number has been arrived at by NBN Co applying the ACCC's rules for determining PoI locations, namely that PoIs should be located where: it is technically and operationally feasible for NBN Co to allow interconnection; there are at least two competitors with optical fibres within a nominated distance from that location which connect that site to an optical fibre network which is connected to a capital city and deliver wholesale transmission services which are suitable for use by service providers who wish to connect to the NBN at that location; and there is other evidence that the particular route is, or is likely to become, effectively competitive."
You can read more stories on telecommunications in our newsletter ExchangeDaily, click here to sign up for a free trial...