Internode had its chance to complain, says Conroy


Note: Conroy has since admitted his accusation that Internode did not make a PoI submission was an error.

Communications Minister Stephen Conroy has pushed back against strident criticism of NBN Co’s proposed pricing model by Internode managing director Simon Hackett, arguing the ISP had its chance to complain to the national competition regulator during its inquiry on the number of points of interconnect last year.

Hackett last week described the model as “insane” for small internet service providers, warning that none will survive their walk through the “valley of death” transition from the current copper network to the fibre future envisioned by the Federal Government and that they could be forced to buy aggregated services from existing large players like Telstra and Optus.

Speaking on the ABC’s Inside Business program yesterday (full transcript available), Conroy said Internode’s complaint was essentially about the number of points of interconnect which the NBN will offer ISPs.

“… it would’ve been really fantastic for Internode to have made that argument to the ACCC … They didn’t actually put in a submission to the ACCC’s inquiry on this very matter, but as you would be aware there were many companies who argued the exact opposite to what Internode are arguing,” said Conroy.

Presenter Alan Kohler pointed out that Hackett’s complaint was also based on the cost of what NBN Co calls its virtual circuit pricing, but Conroy echoed NBN Co’s comments last week that Hackett’s critique was based on the idea that ISPs would be national.

According to Hackett, there were several fundamental problems with NBN Co’s pricing model. For example, he said last week, the decision by the ACCC to set the number of points of interconnect around Australia where ISPs could connect to the network at 120 nationally disadvantaged smaller ISPs – who would be forced to provide what NBN Co calls a Connectivity Virtual Circuit (CVC) connection to all of these locations in order to provide a national service.

Hackett has previously advocated a model where NBN Co would provide as little as 14 points of interconnect – which he said would serve smaller ISPs much better. A model with more points of interconnect would serve larger ISPs like Telstra and Optus, he said, which already had infrastructure around Australia.

Secondly, he said the cost of that CVC circuit was too high – it should come down dramatically. Instead, NBN Co should charge more per month for each individual customer connection. If NBN Co’s pricing model didn’t change, Hackett argued, the only way which smaller ISPs would be able to afford to connect to the network would be through larger wholesale players like Optus and Telstra.

On the contentious matter of whether Telstra and Optus will become dominant wholesalers, re-establishing control over the local market: “It’s not for me to decide where companies should wholesale from,” said Conroy yesterday. “As I said, I anticipate that there’ll be new players in the market. I anticipate that there will be wholesale aggregators who come in, who may not necessarily be Telstra or Optus.”

The issue comes as the NBN has recently come under increasing attack from the telecommunications industry itself over the past week, as well as the Opposition. At the Communications Day Summit, AAPT chief executive Paul Broad last week called on fellow telcos to stand up and “make noises” to protect competition in the new world order of the NBN, slamming the network as a return to a telecommunications monopoly.

And Shadow Communications Minister Malcolm Turnbull delivered an impassioned speech arguing much of the reality around the nature of broadband has been lost in the national NBN debate, and that Australia’s fibre to the home rollout was unusual even by the standards of international broadband centres like Korea.

Image credit: Kim Davies, Creative Commons


  1. As much as it pains me, Conroy is…actually…right…Internode did have the chance to make a submission. Whether the ACCC made the right choice on the number POIs, Internode had the chance to voice their concerns.

  2. Hackett’s behaviour does seem a little erratic on this one. Why is making such a public fuss about it now? It’s clear he must have known about this situation in the past.

    Internode have been one of the biggest public supporters of the NBN and it’s a bad look having them on the attach path about CVC and Telstra’s monopolization now.

      • same here. Conroy is either an outright liar and doesnt care who knows it or he is an incompetent and unable to find the ACCC documents right under his own nose.

        Hes certainly swinging this particular ‘fact’ about for political pointscoring and it irks me he trumpets it when he is so completely and utterly wrong about it.

        i think even if the ACCC has made its determination and the policy is all but set in stone Conroy could do the least and give Simon an apology. and yes it hurts Conroys credibility when he continually lies, the NBN is a good policy in my view but its hardly surprising people are so skeptical and hostile to it with a proven liar spruiking it.

        ANYTHING the man says should be factchecked immediately, and only taken on as truth if it passes the test.

        Reidy, it is hardly erratic. hes made the ACCC posts along with blog posts from dec last year and now at an industry group meeting as a presentation. id say hes more been consistent against but not been in a position to change the mind of Conry nor ACCC (who ultimately made the POI decision). hes at least tried to say that “look theres some problems with this here” – but not just bashed, but offered a solution modifying CVC terms in a manner that NBNco makes the same money but makes things a little easier for the small guys to play in the NBN world. it will be ignored along with the ACCC submissions, evidently, but you cant say he hasnt tried.

  3. Thanks Andy,

    They were a good read and sure enough even mention what Simon Hackett recently said that got under Conroy’s skin.

    I had made the mistake of accepting what Conroy claimed, something I really should stop doing.

  4. It’s not about the CVC charge the real issue is bureaucrats making what should have been a technical decision by NBN co. Now we have a signal point of failure in each of the 120 regions instead of a pair of redundant sites it each state.

  5. I seem to recall something a few months ago on his blog about the concerns with the number of POIs being too high… so Conroy, he has been complaining, and you just didn’t listen.

    Although I support the NBN in principle, I think that Conroy should not be in-charge of it.

  6. Conroy is a typical pollie bend the truth til it breaks it.
    I can’t take anything what Conroy says seriously at all.

  7. The statements by Senator Conroy about Internode were made entirely in error. Repeatedly, as it happens.

    I have had confirmation this morning from the office of the Senator that they apologise for the error and are contacting media outlets to explain that they were wrong about this.

    Here are the *two* submissions on this topic from 2010 that are on the public record, on the ACCC web site:

    Here is some further followup, also from November 2010, on the Internode public site:

    And here is a proposal to fix (some) of whats wrong – the point being that we want to fix it, not just complain about it:

    Its been quite surprising that such a fundamental error was made by the Minister on this occasion.

    The truth? Yes, we had our chance to complain, and we *did* make our complaints/proposals/suggestions within the public process concerned. That the commercial interests of Telstra and Optus appear to have won out over improved customer outcomes really does concern me -and its concerned me for a long time.

    Far from being an instance of ‘had he complained earlier, it might have helped’, he *did* complain earlier – and that appears to have ignored both then and until very recently to boot.

    We hope the Senator will read our submissions now that they’ve been pointed out to him.

    Simon Hackett

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