Australian government updates policy; allows NBN Co to charge connection fee for services

11 Dec 2014

Australia’s government has published a policy update entitled ‘Telecommunications infrastructure in new developments’ in which it sets out the proposed approach for the provision of telecommunications infrastructure in new residential developments; this replaces the previous ‘Fibre in New Developments’ policy update, issued in June 2011.

Among the more notable elements of the updated policy is the revelation that NBN Co, the company overseeing the National Broadband Network (NBN) rollout, will be allowed to levy a one-time connection charge of AUD300 (USD249), which the state has said it expects retail service providers (RSPs) to pass on to end users. Further, NBN Co will also now levy a deployment charge on developers for its fibre-based infrastructure, with that having been set at AUD600 for single-dwelling units and AUD400 for multi-dwelling units. Meanwhile, for fixed wireless and satellite technologies the government has revealed that developers will need to pay a ‘co-contribution’ of AUD1,100 per multi-dwelling unit and AUD1,300 per single-dwelling unit to secure such connectivity.

Another key element of the policy is confirmation that NBN Co will remain as the infrastructure provider of last resort (IPOLR) in developments with 100 lots or more within its fixed line footprint, while fixed line incumbent Telstra remains the IPOLR in both those developments with fewer than 100 lots and those outside the NBN fixed line footprint. Additionally, the state has said that the telecoms industry, through the Communications Alliance, will be asked to establish an adjudicator to resolve disputes over IPOLR responsibilities. Should it not do so the government itself will establish an adjudicator at ‘industry’s expense’.

As per the reforms, it has also been revealed that NBN Co will trial a system where developers, contractors or alternative network providers can enter into a contract with it under which they would build and transfer infrastructure at a pre-agreed price. Trials of such contracts are to take place in at least three states and cover at least 3,000 lots or premises in total, preferably in a mix of development types, with these expected to get underway before 1 July 2015.

ZDNet Australia meanwhile notes that a new carrier licence condition will come into effect on 1 January 2015 which requires providers of superfast broadband networks providing services to residential customers to be functionally separated, and to offer a 25/5Mbps wholesale bitstream service at no more than AUD27 per month. Looking further ahead, the government plans to introduce a new telecommunications sector regulatory framework on 1 January 2017 in which the Australian Competition and Consumer Commission (ACCC) will be given the power to authorise functional separation of high-speed fixed-line broadband networks, and impose conditions as part of that authorisation.

In announcing the latest policy update, a joint statement by communications minister Malcolm Turnbull and finance minister Mathias Cormann stated: ‘NBN Co charging for infrastructure in new developments would be consistent with charging for the provision of other infrastructure in new developments. It will foster competition, which will benefit developers and consumers by increasing choice and putting downward pressure on costs … Overall, the approach set out in the policy paper provides increased certainty for an industry that has been undergoing regulatory change since the original NBN was announced in 2007.’ Shadow communications minister Jason Clare has criticised the plans though, and in arguing that the charges amount to a ‘tax’, he said: ‘Home prices are already very high. This tax will hit those who can afford it the least — young families just starting out. The last thing new home buyers need is a new NBN tax … This tax is also unfair. It means that if you buy an existing home, you don’t have to pay anything extra for the NBN. Your taxes pay for it. But if you buy a new home, you have to pay for it twice.’