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Thursday, 08 October 2009 13:20

NBN: Pipe presses Feds for better facilities access

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Even as Pipe Networks partied in Sydney Thursday night to celebrate the launch of its PPC-1 trans-Pacific cable, the company was pressing Government for changes to proposed legislation to give it better access to interconnect facilities.

The company says proposed amendments to part XIC of the Trade Practices Act were flawed in allowing access seekers existing contractual arrangements with Telstra to trump future terms of access set by the competition regulator (ACCC).

The proposed changes also left in place a financial incentive for Telstra to delay access disputes to the detriment of the consumer.

In its submission to the Senate inquiry into the proposed legislative changes, Pipe has joined the combative service provider iiNet to call for additional strong safeguards to protect companies seeking access to facilities from being pressured by Telstra to accept unfavourable terms.

Pipe also wants a regime put in place where access disputes enable the regulator to "back-date determinations" regarding both facilities and service access – to "remove the monetary incentive for Telstra to delay the regulatory process."

The Pipe Network PPC-1 fibre optic cable was officially launched in Sydney today. The cable providers whole internet connections for services providers like Internode and others between Australia and the US via Guam.

Like many service providers, Pipe's Senate submission points to the "negotiate-arbitrate" model for access as time-consuming, litigious, complex and delay-prone. But the company complains that Government’s proposed legislation proposes replacing the model only for declared services.

"PIPE agrees with much of the criticism levelled at the 'negotiate-arbitrate' model by the government and industry – the ‘negotiate-arbitrate’ model is clearly broken," Pipe said in its submission.

"For no apparent reason, the Bill proposes that this model be replaced only as it relates to the declared services regime in Part XIC – Schedule 1 will be left with the broken 'negotiate-arbitrate' model."

"This omission is all the more puzzling given its timing. Of the nine services currently declared under Part XIC, six of those services relate to services supplied using legacy copper cables which may be rendered obsolete by the currently preferred Fibre-To-The-Premises (FTTP) model for the National Broadband Network (NBN)."

"In contrast, access to duct will be a vital component of the NBN. Access to telecommunications towers (for the deployment of fourth generation wireless services to provide coverage of 'gaps' in FTTP infrastructure) is also likely to be a significant part of the NBN," the submission said.

Pipe argued that the important difference access disputes between Part XIC and Schedule 1 was that Part XIC disputes allowed the ACCC may backdate a determination and order the repayment of excessive payments – where Schedule 1 disputes did not receive this benefit.

"To a degree this removes the incumbent's incentive to delay negotiations and frustrate arbitrations. Schedule 1 does not provide the ACCC with this specific power and thus Telstra has a clear financial incentive to stonewall negotiations and delay the arbitration process," the company said.

"If the regime which replaces the ‘negotiate-arbitrate’ model expressly allowed for the back-dating of determinations in regards to both facilities and service access, it would remove the monetary incentive for Telstra to delay the regulatory process."

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