Conroy: Cherry-picking laws won't hurt small business

By Brett Winterford on Mar 31, 2011 3:11 PM
Filed under Networking

Claims no service providers are offering SMB's services over 24Mbps.

Communications Minister Stephen Conroy has attacked claims that NBN laws passed last week will delay the adoption of high speed broadband among Australian small businesses.

The Minister responded to concerns voiced by NextDC chief Bevan Slattery yesterday concerning the "anti-cherry-picking" clauses inserted into the NBN laws passed earlier this week.

The clauses prohibited a service provider from deploying "superfast" fibre infrastructure - capable of internet speeds above 24 Mbps - to businesses with under 15 staff, unless wholesale access to the fibre was made available openly and on non-discriminatory terms.

Slattery told the CommsDay summit that such a clause would mean that small businesses could not expect to achieve speeds of over 24 Mbps for several years as they waited for NBN Co to connect their local area.

But Senator Conroy told iTnews today at the Cisco Live! conference that the Government "makes no apologies" for protecting NBN Co from having the most profitable areas of Australia networked with fibre before the national broadband network arrives.

Asked how long small businesses would be required to wait for high speed broadband in the meantime, the Minister said the point was "a nice theoretical" argument that was irrelevant in practice.

"Nobody (amongst telcos) is knocking on the door of that small business market right now," he said - referring to high speed services above the 24 Mbps threshold offered by ADSL2+.

Slattery had slammed the clauses which he said prevented NextDC - which had 14 employees - from running fibre links interconnecting the company's data centres and head office.

He said that Australia's small businesses without an existing fibre connection were now "legislatively isolated" to run on ADSL.

"When are you going to give me fibre under the NBN? Can you guarantee that I'm going to get fibre next year? Within five years? Before 2020?" Slattery had quizzed a government official in the summit audience without eliciting a response.

"Most small businesses won't have a chance in hell of getting a [fibre] service until at least 2016. That is unacceptable. That is stranding the biggest growth engine in our nation."

Conroy blames "shock jocks"

Senator Conroy also expressed disappointment that Internode chief Simon Hackett had criticised the points-of-interconnect plan agreed upon by the Government and competition regulator the ACCC, asking why Hackett or Internode had not earlier submitted a submission to the competition watchdog's inquiry into the matter.

The Minister said he expected dissatisfaction with the NBN plan to wind down once more Australians saw applications in action.

He said Sydney was a particularly challenging area to sell the NBN vision, predominantly due to the attacks of "shock jock" radio kings Alan Jones, Ray Hadley, Chris Smith and Michael Smith. He said his office has counted 158 occasions in which one of the four have attacked the NBN plan over a 40 working day period.

Conroy: Cherry-picking laws won't hurt small business

11 comments in this discussion

"@RDEFCON1, if the Libs get back in power in 2013, that's exactly what may happen. However, I think there is a lot to be said for a consistent and uniform nation-wide network. It has worked very ..."

By Ace

Tags

cherry picking, cherry, conroy, nbn, nbn co, slattery, small business, smb

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Comments: 11

simonhackett Mar 31, 2011 5:55 PM	In response to the statement attributed to Senator Conroy, about me: The claim made about me by Senator Conroy is completely incorrect. Internode did indeed make a public submission to the ACCC enquiry in October 2010, in which they argued for the points of interconnect being delivered in metro areas as originally envisaged by NBNCo. The same submission argued for the merits of an NBN charging model that does not penalise increased downloads - and yet this is exactly the model subsequently released by NBNCo to the market. The Internode submission to the ACCC enquiry is public, and it may be downloaded from the ACCC web site, here: http://www.accc.gov.au/content/index.phtml/itemId/961575 In addition, I provided a public statement about the same issues on the Internode web site, on December 19th 2010, here: http://blog.internode.on.net/2010/12/19/nbn-points-of-interconnect-and-the-future-of-competition/ I then presented further thoughts on the issues at the CommsDay event this past week in Sydney, that may be downloaded here: http://blog.internode.on.net/2011/03/30/nbn-wholesale-pricing-problems/ I am, in return, disappointed that Senator Conroy didn't do a little homework before incorrectly claiming that neither I nor Internode had provided input to the ACCC prior to this point. Internode regularly provides such input, including the response to this specific matter that is on the public record as noted above. We support the NBN in general. But it is appropriate and important that serious structural flaws in the underlying pricing model are identified and corrected to ensure that participation in the network is as wide and as competitive as possible. This is in the interests of all of us to achieve. It is with that in mind that I have been analysing the impacts of the current NBNCo pricing model and the impacts of the ACCC POI decisions. Should I have made any errors in my calculations, I should be very happy to go over those calculations directly with Senator Conroy so that he can tell me where I've got them wrong. However, to date, his criticism of my conduct is not actually a claim that my calculations are wrong - rather, it seems that I am merely being shot for being the messenger. Regards, Simon Hackett MD, Internode
tallguy Mar 31, 2011 10:46 PM	Careful, sounds like you're trying to mix facts and politics ;-)
martin.burns Mar 31, 2011 11:18 PM	"Nobody (amongst telcos) is knocking on the door of that small business market right now," he said - referring to high speed services above the 24 Mbps threshold offered by ADSL2+. You know TPG corporate are offering 100/100Mbps fiber internet for under $300 p/m to any business in a PIPE lit building.... And SOUL are offering 50Mb fiber access for under $850 p/m for voice, internet or data to any business in a PIPE ETHERNET area.... You know TPG/Soul is independently rated by Gartner as the second largest MPLS provider nationally. And Paul Buddle says it's the largest voice and data network under Telstra. Odd that Conroy isn't aware of what the second largest fixed lined network in Australia is doing?? And concerning that he doesn't seem to care.
DJ Apr 1, 2011 7:26 AM	Sounds like Senator Conroy is legislating based on his "understanding" or beliefs, relevant to small business in this case. Clearly his views don't reflect reality, again. It won't be long before this guy is gone, along with the Government which will be written as one of the worst in political history. Solar Panels Pink Batts BER Asylum Seekers ...NBN Let's just hope the incoming government can un-do enough of this mess to recover at least some the wasted billions of our hard earned taxpayers revenue, whilst re-evaluating the NBN and bringing things back to something that is both practical and affordable for our nation. Those independants must be feeling pretty average right about now. Imagine trying to hold your head up high and proud for this track record in a small country town where everybody knows you.
Rossyduck Apr 1, 2011 9:32 AM	DJ - Independents are greedy donkeys, Conroy tickled them behind the ears, spoke soothingly, and with their eyes fixed on the carrot they plunged us all over the cliff edge. But they needn't feel alone - lots of other companies fell for the same trick. As far as speeds are concerned I cannot believe this government is so out of touch with reality ?! and anyway if we are not offering >24 why now stop us ...?. Saw report that Paul Budde suggested the Govmt had lost its social objective and was now focussing on ROI at the expense of everything else. Frustrated civil servants wanting to prove thmeselves in the business world with our tax $$ ?. I doubt even N Korea would take it that far.
Tom Brown Apr 1, 2011 12:50 PM	I suggest Mr Conroy offers an apology and to make up to Simon. The Sydney shock jocks should be ashamed of themselves, they spruik such crap, how come most Sydney'ers don't know any better, I know some just laugh them off?. And Slattery, what a load of tripe. You know better but your own self interest and desire to grandstand affects a manipulative aspect to your character. The leglislation does not stop development it just specifies it must be open. The biggest chance small business has to get high speed broadband is the NBN, the other interests are only choosing the most lucrative deals eg Pipe.
Maxxi2 Apr 1, 2011 1:19 PM	Just like the Brisbane sewer pipe fibre specialists, many (but not all) players want to rush into prime and easy to install, high profit areas and make a quick and easy buck as quickly as possible and with minimal risl, preferably with guaranteed revenues and profits. But, they want all the benefits without the responsibility of the national infrastructure requirement to provide USO across all regions. You want to fibre up prime metro areas, then also fibre up rural and country areas at the same cost structure as the NBNco. That is pricing and access equity both in getting and providing. Letting a few players seek the quick and easy buck to the detriment of the overall market is NOT free market development. These guys have no interest in free market development and the flip side of the coin: Fibre up just as much rural and country, high cost and low return areas as you do high profit metro areas. Sign up for and deliver USO to as many rural centres as you are scrambling to service metro areas. As a sign of their seriousnes and readiness to provide USO, the Brisbane-bound sewer fibre specialists have already abandoned their early committments, discovered that there is not risk free pot of unlimited cash-cows across metro Brisbane and have already been ditched. A level playing field cuts both ways: The get and the give. If we want to demand national acces equity, the we need to demnand national acces equity provisioning from every company that wants to play in this space. If we are scrambling to make these mysriad demnds, most of then very justified, on the NBNco, then make the same demands on other fibre network providers that want a slice of the pie... We should not forget what the modern concept of a cherry picker actually represents, and it is NOT a concept that delivers equitable returns to all market participants. They want the cherries OK, but not the work, the responsibility or to go the hard yard...
Rossyduck Apr 1, 2011 2:44 PM	Maxxi2 - don't want to burst your bubble but fibre is not going beyond the urban fringe or to small towns of less that (I think) 500 residents and it is likely copper is going to be recovered. I have minimal objection to my tax $$ being used to fix services in the areas unattractive to the market husbanding its scarce capital (that is what a functioning market is about) and that is what governments are for - to look at those social issues and spend our tax $$ either through incentives, fixing legislation or directly. I do object to my tax $$ being wasted to disrupt existing areas where there is a market (and my tax $$ is not required) and to boot putting legitimate businesses out of business.
anonymous Apr 1, 2011 6:31 PM	It seems Maxxi is right, if we rightly look at the issue from a national perspective. While it is true that some posts here and elsewhere have said 'screw the bush, I'm all right, Jack, in my urban comfort', the fact remains that most people seem to recognise that a major benefit of the national broadband network is just that - it's national. This may not suit some existing cherrypickers who have mostly done very well out of selective coverage, but while we no doubt feel their loudly expressed pain, there may be other things that are more important. Fibre may indeed not be going to all premises in Australia, but NBN will be available to everybody in one of it's three iterations. This would have been unthinkable under the cherrypicking-rules market that has existed up to now.
RDEFCON1 Apr 4, 2011 7:05 PM	Better still, use government funds to build, or subsidise the build, of fibre infrastructure in unserved regional/rural areas - and let the free market deal with building competitive infrastructure where it's viable to do so. Government intervention does not need to be polarised to an 'all or nothing' debate about delivery of services on a national bases. Governments should only intervene where the market is unable to provide a viable solution. In this case, that means beginning with rural areas and working back in.
Ace Apr 5, 2011 2:43 AM	@RDEFCON1, if the Libs get back in power in 2013, that's exactly what may happen. However, I think there is a lot to be said for a consistent and uniform nation-wide network. It has worked very well for Australia's telephone system in the past. The downside is of course the internets patchwork of networks and owners is what gives it it's strength. The NBN and other countries national networks may be defeating that independence.