Turnbull NBN greenfields idea wins support

TransACT has come out in support of Shadow Communications Minister Malcolm Turnbull's potential amendment to the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011, which would enable developers to get fibre installed and then be compensated by the National Broadband Network Company (NBN Co).

(Optic fibre image by Hisa Fujimoto, CC BY-SA 2.0)

Last week, Communications Minister Stephen Conroy announced slight changes to how fibre is rolled out to new housing developments from 1 January this year. Under the arrangements, NBN Co is the fibre provider of last resort for developments with more than 100 lots, while Telstra is provider of last resort for developments of less than 100 lots, or for those that were approved before 1 January 2011.

Developers are responsible for providing NBN Co approved pit and pipe infrastructure for these lots, but the fibre is provided at no cost. Telstra will generally provide copper; however, if the NBN is to be rolled out to the location of the development soon, Telstra can provide an interim wireless connection. Before the fibre is installed, the ownership of the pit and pipe infrastructure must be transferred to NBN Co.

At the second hearing of the joint parliamentary committee on the NBN in Canberra on Friday, Turnbull questioned fibre network companies TransACT and OptiComm on his proposed amendment to the legislation underpinning the greenfields roll-out. Under Turnbull's proposal, developers can pay for a fibre company to install the pit and pipe infrastructure, as well as the fibre, and then be compensated later by NBN Co.

"The developer could hire [TransACT] or someone else to do pit and pipe and fibre at the same time, and then choose either to operate that with [TransACT] or OptiComm as an independent network or, alternatively, under the amendment I'm proposing, putting that back to the NBN," Turnbull said.

TransACT CEO Ivan Slavich was open to this proposal.

"We would support that type of amendment to the legislation," he said. "We think it's much more efficient to actually do both at the same time rather than put pit and pipe and then put fibre through."

It would help when a home owner wanted fibre, but NBN Co isn't ready to lay yet, Slavich said.

The greenfields issue has become contentious with housing developers and fibre providers. At the hearing on Friday, the Housing Industry Association raised its concerns that developers had to pay the cost of the laying of NBN fibre to new homes, while pre-existing houses get the fibre installed for free. CEO of fibre provider Openetworks Michael Sparksman has also previously said that NBN Co may put fibre companies out of business by offering the fibre itself for free to developers.

Cost-benefit analysis

At the hearing, Turnbull also canvassed the potential for the Productivity Commission to do a cost-benefit analysis pitting the NBN's fibre-to-the-home approach against the fibre-to-the-node approach. Commission chair Mike Woods said that without direction from the government, the Commission could conduct a limited cost-benefit analysis based on information provided, as long as it didn't require more resources.

"The productivity commission would be able to create a document for the committee which drew on information it had to hand," he said. "If government invited us ... to undertake an inquiry into that matter. We're not a sort of short-term research entity; we undertake thorough investigation into matters ... but at this point, we could only respond based on information we have to hand."

Turnbull suggested to Woods that the advance of universal and affordable broadband is achievable if the cost of the network is as low as possible.

"Different technologies produce different benefits, and that's what a cost-benefit examination would illustrate," Woods said.