Building owners extort fibre providers: Pipe

Pipe Networks has called on the Federal Government to overhaul carrier access laws for apartment buildings, stating that extortion and blackmail could hit the NBN Co roll-out.

Under law established in 1999, fibre providers are allowed to install fibre into buildings such as apartments for the purposes of serving customers within that building, provided there aren't legitimate objections from the building owners as set out under the legislation.

Pipe Networks legal counsel Dale Clapperton told an audience at the Communications Day Summit in Sydney this morning that the objection system had been abused by construction owners who used it to force fibre providers to sign licence agreements and pay rent to install fibre into the buildings.

"Once a carrier signs the licence agreement, that's it, they forfeit their right to connect other customers in that building and everything from that point forward is dependent on the permission on the owners or managers of the building," he said. "If a carrier gets the shaft by a building owner or manager there's no other recourse for them."

He said that while there needed to be oversight over the powers fibre providers have to enter buildings, there was no disincentive for building owners to object to fibre providers moving into their building and no limit to the amount of times they can complain. The costs for providers to follow these up can cost tens of thousands of dollars and take up to a year to get through, according to Clapperton.

"Owners and managers will quite blatantly use extortionate tactics to achieve their goals of licence agreements and payment of rent," he said. "The objection consultation process is broken."

With the impending roll-out of the NBN, building owners charging rent to a number of carriers who then remove their infrastructure from a building and opt to offer services through NBN's fibre would find themselves out of pocket and would likely seek compensation from NBN Co, Clapperton said.

"When you're a carrier like NBN Co, it will not only delay the initial installation of facilities, it will also have the same effect on all subsequent maintenance activities," he said. "We think the government needs to clarify if carriers need to pay rent or sign licence agreements."

NBN Co recently highlighted that difficulty in getting permission from apartment building owners was one of the reasons why the take-up rate in Brunswick in Melbourne was so low.

Whatever reform the government makes to the legislation must apply to all existing fibre providers and not just NBN Co, Clapperton said.

"In our view there are some serious deficiencies in the existing regime and giving NBN Co special powers over and above the powers enjoyed by other carriers would, in our view, be inconsistent with the government's level playing field approach to this issue," he said.

"It would put the other carriers who are still trying to compete with NBN Co to the extent allowed by the anti-cherry-picking regime at a significant competitive disadvantage."

Clapperton said that the Department of Broadband, Communications and the Digital Economy had been consulting with industry on the issue.