10 May 2010
The National Broadband Network Implementation Study, released last week, seriously undermines government plans to require new urban development projects to help cover the costs of the broadband network.
The report was prepared by McKinsey & Company and KPMG and has been described by the government as a “landmark study”.
The report makes it clear that NBN Co should act as a network provider of “last resort” in development areas and should bear all costs of the roll-out, other than trenches, ducts, pits and pipes on a developer’s site.
This is exactly what we’ve been saying since the Federal Government announced the NBN network 12 months ago. There’s been a year-long debate about whether or not development projects should be forced to carry the cost of fibre and network infrastructure.
Under the government’s original proposal existing residents and existing businesses will benefit from a taxpayer funded rollout of a national broadband network while occupants of new business premises and new home buyers had to pay twice. They paid once through their general taxes and again through embedded costs in the price of their newly developed properties.
The NBN Implementation Study offers absolutely no support to the government’s proposal for developers to cover the costs of ‘backhaul’. The study proposes that developers should only be liable for trenches, ducts, pits and pipes when NBN Co has deployed its network in an area. The study recommends that, in this situation, the NBN Co should cover the costs of installing all other FTTP network infrastructure up to the premises.
In areas where the NBN network has not been deployed, the Implementation Study suggests that a development proposal may require fibre-ready ducts, pits and pipes to facilitate a later re-fit.
The study echoes concerns consistently advanced by the Urban Taskforce when it says that: “Greenfield estates which are not adjacent to an existing network can be expensive to serve. A new fibre exchange may be required, and connecting the exchange to a competitively provided backhaul network may require a long and expensive link to reach existing backhaul links”.
The study is only a proposal at this time and does not yet reflect government policy. It has been released for public comment, which can be made until 27 May 2010. Please contact us if there are any matters you think we should raise arising from this submission. Our initial submission highlights how strongly the government’s arguments have been weakened by the study.
The study is available here. The main recommendations relevant to urban development are recommendations 12-18. The discussion of these issues is mainly in Chapter 2, pages 89-98 (starting from PDF page 100).
