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Australia - National Broadband Network - Wholesale and Competition


Attention: There is an updated edition available for this report.

The NBN, and in particular the structural separation between infrastructure and services, is going to change the telecoms industry beyond recognition. Gone will be the days of regulatory gaming. A completely new industry structure will require collaboration and cooperation, rather than the destructive adversarial environment of the past.

However, before that open market is established, Telstra will still dominate the current market structure, and with its NBN bounty has deep pockets to invest in new opportunities. Another question is whether the design of the NBN will lead to true wholesale competition; or will it restrict this to a handful of players who can afford to build their presence in the 121 points of interconnect? This could well prove to be a critical strategic mistake.

The ACCC who approved this has already indicated that this will be one of the main areas it will be monitoring. The unique construction that offers backhaul competition could indeed be the facilitator in obtaining the competitive outcome needed to ensure that a dynamic system is developed which will lead to innovation.

Industry collaboration will also be needed to limit the necessity for more regulation. In a dynamic environment time is money and there is no longer room for year-long regulatory processes. Trust needs to be built up to facilitate much speedier dispute resolution, preferably preventing these disputes from arising in the first place. Some early indications are that NBN Co is willing to sit down and make changes where it makes sense to create a better wholesale and retail environment for all involved.

Key developments:

PoI (point of interconnect), CVC (Connectivity Virtual Circuit), wholesale, RSPs (retail service providers), pricing.

Companies mentioned in this report include:

Internode, M2, NBN Co, Nextgen, OPEL, Optus, Telstra.


1. Synopsis
2. Competition analysis
2.1 More of the same competition in 2013
2.2 NBN and the competition issues
3. National Broadband Network – Policies and Regulations (see separate report)
4. Wholesale Product Overview
4.1 NBN for business
4.2 1Gbps wholesale service
5. The NBN wholesale and PoI debate
5.1 Wholesale dominance
5.2 Backhaul competition
5.3 The business opportunities of the POIs
5.4 CVC issue resolved – sort of
5.5 Access seekers gateways
6. NBN Co’s multicast service
6.1 Overview of the service
6.2 Wholesale Pricing
6.3 iiNet
6.4 4K TV
7. Pricing Strategies
7.1 Wholesale Broadband Agreement
7.2 NBN Co special access undertaking (SAU)
7.3 Wholesale prices
8. NBN Utility Management service – The Retail Clause
9. Do we need infrastructure-based competition?
10. Other reports
Table 1 – NBN pricing schedule for access virtual circuits
Table 2 – NBN pricing schedule for PoI connections
Exhibit 1 - Ultra-HDTV 4K ‘standard’ for satellite TV

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