THE FEDERAL MINISTER FOR COMMUNICATIONS RECENTLY RELEASED A POLICY PAPER ON THE PROVISION OF TELECOMMUNICATIONS INFRASTRUCTURE IN NEW HOUSING DEVELOPMENTS. IN SIMPLE TERMS IT LOOKS AT HOW NEW DEVELOPMENTS WILL RECEIVE BROADBAND (INTERNET) SERVICES AND INFRASTRUCTURE. THE DRAFT POLICY PAPER IS PART OF THE GOVERNMENT’S RESPONSE TO THE RECENT VERTIGAN REVIEW’ “NATIONAL BROADBAND NETWORK MARKET AND REGULATORY REPORT”, WHICH WAS RELEASED IN OCTOBER THIS YEAR. THE REPORT RECOMMENDED THAT DEVELOPERS AND CONSUMERS IN NEW DEVELOPMENTS BEAR THE COST OF TELECOMMUNICATIONS INFRASTRUCTURE.
To understand why the development industry will strongly resist this outcome, we need to step back a few years to when Telstra was the “provider of last resort.” At this time the responsibility of developers was to provide the “pit” where all of the services like water and power are laid and make it accessible to Telstra which would lay the pipe infrastructure and pull through the copper cable.
New home buyers paid for this infrastructure over time via their telephone bill. This had the advantage of not front loading costs onto new housing, which then gathers both stamp duty and mortgage interest; for example a $1,000 extra cost collects a further $1,861 in stamp duty and mortgage interest (based on a $200,000 lot at 5.2%pa over 30yrs).
When NBN Co became the government’s provider of broadband services, upfront costs were introduced for the design and installation of the pipe through which the fibre optic cable is later pulled. Under the proposed arrangements, NBN Co will also charge a:
- one-time connection fee of $300.
- deployment charge of $600 for single-dwelling on developers for infrastructure.
- co-contribution of up to 50 percent of the first $1000 per lot of capital costs it incurs with developers then liable for 100 percent of backhaul (broadband infrastructure) costs in excess of $1000 per lot.
These costs will all get passed on to new home buyers.
The Federal Government states that the objective is to provide a balanced package that ensures people in new developments have ready access to quality telecommunications services; promotes a level playing field for the competitive supply of telecommunications infrastructure; and, minimises costs. The question we ask is who the beneficiary of the cost minimisation as it is certainly not new home buyers.
The proposed commencement date for the policy is 1 March 2015 with submissions closing on 15 January. Details on the Federal Department of Communications website.