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Wednesday, 21 September 2011
Page: 11150

Broadband

(Question No. 389)

Mr Fletcher asked the Minister representing the Minister for Broadband, Communications and the Digital Economy, in writing, on 26 May 2011:

Further to the Minister's answer to question in writing No. 179 (House Hansard, 10 May 2011, page 54):

(1) Is it a fact that the cost of transit capacity on the Internet is a cost which must be met in providing a service to end users over the National Broadband Network; if so, will this cost be met by NBN Co. or the retail service provider.

(2) If this cost is to be met by NBN Co., will NBN Co. know in advance the likely sum in order to recover it from retail service providers in the final price charged.

(3) If this cost is to be met by retail service providers, will NBN Co. know in advance the likely sum, so that in setting a price for retail service providers it is able to consider the likely margins to be earned by the retail service provider, taking account of all of the retail service provider's costs (including amounts paid by both the retail service provider to NBN Co. and the service provider for transit capacity).

(4) Has NBN Co. developed estimates of what the cost of transit capacity on the Internet (per megabit) will be; if so, what are they; if not, why not.

Mr Albanese: The Minister for Broadband, Communications and the Digital Economy has provided the following answer to the honourable member's question:

(1) Yes. Depending on the application, transit capacity is required to connect from the NBN Point of Interconnect (POI) to other parts of the internet. The cost of this connectivity is the responsibility of the retail service provider.

(2) The cost of this capacity is the responsibility of the retail service provider.

(3) NBN Co considered a range of inputs when developing the wholesale costs for the NBN, including the prices in the ACCC's Declared Transmission Capacity Services Interim Access Determination. Whilst NBN Co can model a number of likely cost scenarios, it cannot know precisely all retail service provider's costs as these will depend on a range of commercial choices made by the RSP.

(4) See answer to (3) above.