NBN backhaul impost dropped

21 June 2010

The Federal Government has announced that Telstra and the Federal Government’s company, NBN Co, have entered into a Financial Heads of Agreement relating to the roll-out of the National Broadband Network.

As part of this announcement the Federal Government has released a new policy statement on a range of National Broadband Network topics, including the arrangements to apply in new development areas.

According to the new policy, from 1 January 2011, NBN Co will act as wholesale provider of last resort in new developments constructed within, or adjacent to, NBN Co’s long term fibre footprint. Developers and – on their own property – property owners will be required to cover the costs of trenching and ducting. NBN Co will cover the other costs of installing fibre infrastructure in the development, including backhaul.

This is a reversal of the Federal Government’s earlier position which envisaged a substantial contribution by property developers to backhaul and other costs. The Urban Taskforce was a member of a federal working party appointed by the Minister for Communications. We’re pleased the Federal Government has responded to our concerns on this point.

During the period that the NBN is being deployed NBN Co may sub-contract the roll-out and operation of fibre networks in new developments, but the networks will be built to meet the technical specifications of the NBN and will be operated on an open access basis. Ownership of these networks would transfer to NBN Co and form part of NBN Co’s open access wholesale only network.

Telstra will not be required to provide infrastructure in new developments, however to ensure that retail services are offered in new estates, Telstra will be required to provide standard telephone services to end users in new developments in which retail services are not offered by another service provider (retail provider of last resort).

These arrangements will not prevent developers from using other companies to roll-out fibre networks in new developments if they wish, but such networks will need to comply with the technical specifications of the NBN and be operated on an open access basis, and would be offered on an equivalent basis to NBN wholesales services.

Telstra will be able to extend its “HFC network” to provide pay-TV services only to homes in new developments adjacent to its existing HFC network, so long as a fibre network has been rolled out in the development.

NBN Co’s role will apply regardless of whether the Fibre Deployment Bill currently before the Parliament is passed. The Government says it will continue to seek the passage of this legislation, amended as necessary to deliver in full the arrangements described above, to ensure all stakeholders have certainty as to their obligations to have fibre installed in new developments.

The full policy statement is here.

The government’s media statement is here.