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2019-2020
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS AMENDMENT (INFRASTRUCTURE IN NEW
DEVELOPMENTS) BILL 2020
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Communications, Cyber Safety and the Arts,
the Honourable Paul Fletcher MP)
TELECOMMUNICATIONS AMENDMENT (INFRASTRUCTURE IN NEW
DEVELOPMENTS) BILL 2020
OUTLINE
Overview
The Telecommunications Amendment (Infrastructure in New Developments) Bill 2020 (the
Bill) amends Part 20A of the Telecommunications Act 1997 (the Act) to:
improve the installation of fibre-ready facilities (such as pit and pipe infrastructure for
telecommunications cabling) by extending the existing prohibition on developers who
are constitutional corporations from selling or leasing a building lot or building unit in
a new development unless fibre-ready facilities are installed in proximity to the lot or
unit, to all types of developers, including unincorporated developers; and
insert a new definition of 'functional fibre-ready facility' in Part 20A of the Act to
make it clear that a fibre-ready facility must be technically capable of being used in
connection with an optical fibre line.
2
Telecommunications Amendment (Infrastructure in New Developments) Bill 2020
Background
The Telecommunications Amendment (Infrastructure in New Developments) Bill 2020 (the
Bill) will improve the installation of fibre-ready facilities (such as pit and pipe infrastructure
for telecommunications cabling). It does this by extending the existing prohibition on
corporations selling or leasing a building lot or building unit in a new development unless a
fibre-ready facility is installed in proximity to the lot or unit, to other types of developers,
such as unincorporated developers. It does this through amendments to Part 20A of the
Telecommunications Act 1997 (the Act).
Fibre-ready facilities are key enabling facilities for the installation of fixed-line
telecommunications networks. Such networks are increasingly important in allowing people
in Australia to engage in the modern economy, with their importance underlined by the need
for many people to stay, work and study at home because of the impact of COVID-19. People
taking possession of new homes or businesses expect ready access to modern
telecommunications services, but if fibre-ready facilities have not been installed there may be
delays before such services are available, and significant retrofitting costs.
Currently, under Part 20A of the Act developers who are constitutional corporations are
prohibited from selling or leasing a building lot or a building unit if fibre-ready facilities have
not been installed in proximity to the building lot or unit. At the time Part 20A was
introduced in 2011, the then Government decided only to apply the requirements to
constitutional corporations.
In addition to the law, the Commonwealth has engaged in a range of activities, including
raising awareness with developers and liaising with state, territory and local governments, to
boost installation of fibre-ready facilities by all developers. A Commonwealth policy, the
Telecommunications in New Developments policy, has also been in place since 2011 and
provides that all developers, whether incorporated or unincorporated, should install fibre-
ready facilities before selling or leasing building lots or units.
Since 2011, the majority of developers have installed fibre-ready facilities in proximity to
building lots or units before selling or leasing them. However, there has been a small but
persistent failure by some unincorporated developers to install fibre-ready facilities. This
pattern also appears be higher in states or territories which do not have requirements in their
local planning frameworks for developers to install such facilities.
Given this problem, and the importance of ready access to telecommunications, the
Government is extending the current arrangements in Part 20A of the Act to all developers.
Once in place, state or territory governments that do not already have arrangements in their
planning frameworks for unincorporated developers to install fibre-ready facilities may
choose to reflect the new laws in their planning frameworks.
Summary of the Bill
The amendments to Part 20A are contained in Schedule 1 to the Bill. Part 1 of Schedule 1
sets out general amendments. These include introduction of a new definition of 'functional
fibre-ready facility'. This change will ensure that developers must install fibre-ready facilities
that are fit for purpose. Other amendments in Part 1 of Schedule 1 extend the current
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prohibition in sections 372G and 372H of the Act to all types of developers, whether
incorporated or unincorporated. Finally, a new section 372J sets out that Subdivision B of
Division 3 of Part 20A does not apply to the extent that the operation of the Subdivision
would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the
Constitution) from a person otherwise than on just terms.
Part 2 of Schedule 1 contains application and transitional provisions. These exempt projects
that are underway from the new laws. Specifically, developers who are not constitutional
corporations do not need to install fibre-ready facilities where, before the Bill commences,
contracts have been signed or work has commenced on the installation of fixed-line facilities,
or where civil works generally have been contracted or commenced.
Finally, Part 3 of Schedule 1 makes a technical correction to paragraph 372G(1)(d) of the
Act.
4
FINANCIAL IMPACT STATEMENT
There is no financial impact from the proposals in the Bill.
5
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
TELECOMMUNICATIONS AMENDMENT (INFRASTRUCTURE IN NEW
DEVELOPMENTS) BILL 2020
The Telecommunications Amendment (Infrastructure in New Developments) Bill 2020 (the
Bill) amends Part 20A of the Telecommunications Act 1997 (the Act) to:
improve the installation of fibre-ready facilities (such as pit and pipe infrastructure for
telecommunications cabling) by extending the existing prohibition on developers who
are constitutional corporations from selling or leasing a building lot or building unit in
a new development unless fibre-ready facilities are installed in proximity to the lot or
unit, to all types of developers, including unincorporated developers; and
insert a new definition of 'functional fibre-ready facility' in Part 20A of the Act to
make it clear that a fibre-ready facility must be technically capable of being used in
connection with an optical fibre line.
Fibre-ready facilities are key enabling facilities for the installation of fixed-line
telecommunications networks. Such networks are increasingly important in allowing people
in Australia to engage in the modern economy, with their importance underpinned by the
need for many people to stay, work and study at home because of the impact of COVID-19.
People taking possession of new homes or businesses expect ready access to modern
telecommunications services, but if fibre-ready facilities have not been installed there may be
delays before such services are available, and retrofitting costs.
Currently, under Part 20A of the Act developers who are constitutional corporations are
prohibited from selling or leasing a building lot or a building unit if fibre-ready facilities have
not been installed in proximity to the building lot or unit. At the time Part 20A was
introduced in 2011, the then Government decided only to apply the prohibitions to
constitutional corporations. Since 2011, the majority of developers have installed fibre-ready
facilities in proximity to building lots or units before selling or leasing them. However, there
has been a small but persistent failure by some unincorporated developers to install fibre-
ready facilities. This pattern also appears be higher in states or territories which do not have
requirements in their local planning frameworks for developers to install such facilities.
Given this problem, and the importance of ready access to telecommunications, the
Government is extending the current arrangements in Part 20A of the Act to all developers.
Once in place, state or territory governments that do not already have arrangements in their
planning frameworks for unincorporated developers to install fibre-ready facilities may
choose to reflect the new laws in their planning frameworks.
Human rights implications
No human rights issues were raised during consultation. This Bill does not engage any of the
applicable rights or freedoms.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
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REGULATION IMPACT STATEMENT
Proposed amendments to Part 20A of the Telecommunications Act 1997 to reduce delays
and costs to consumers
This Regulation Impact Statement (RIS) looks at options for reducing delays and costs for
consumers when developers (largely unincorporated developers) do not install appropriate
facilities in new developments.
1. The Problem
The fundamental problem is a small number of premises are built in Australia, in areas
serviced by fixed-line telecommunications networks, without telecommunications pit and
pipe, leading to inconvenience and additional costs for occupants of these premises when
they want to use fixed-line telecommunications like high-speed broadband.
Telecommunications is a key infrastructure integral to most aspects of everyday life. This has
been underlined during the COVID-19 pandemic, with network usage on the National
Broadband Network at 9 October 2020 increasing by 80 per cent on pre-COVID-19 levels.1
To help provide access to telecommunications in new developments, under Part 20A of the
Telecommunications Act 1997 (the Act), incorporated developers are prohibited from selling
or leasing a building lot or a building unit if 'fibre-ready facilities' (basically, pit and pipe
infrastructure) have not been installed in proximity to the lot or unit. Requiring the
installation of pit and pipe infrastructure ensures it is relatively easy for a carrier to install
telecommunications infrastructure. People moving into new properties expect ready access to
modern telecommunications services, and can be disadvantaged if this is not the case. Access
to telecommunications is easier and quicker if appropriate pipe and pit infrastructure is
installed during construction for subsequent use by telecommunications carriers.
Data available to the Government indicates that most developers do install pit and pipe
infrastructure. However, complaints received from the occupants of some new developments,
and advice provided to the Government by industry, indicate that some developers do not
install pit and pipe. These are typically small and frequently unincorporated developers (i.e.,
natural persons or businesses that do not operate as companies). Some developers may also
install pit and pipe that is defective and needs to be remediated, again leading to
inconvenience and costs for consumers and carriers.
We estimate that up to 6,000 premises per annum may be affected to varying degrees (see
below in section 6). While the incidence of the problem is relatively limited, the impact can
be significant on those affected, both in terms of inconvenience and costs (e.g. lack of
service, delays in service, organising retrofitting, cost of retrofitting, cost of interim services).
For example, in 2017 residents of three houses in a subdivision in Balga, Western Australia,
were quoted a price of $10,000 to install pit and pipe infrastructure after the developer failed
to install it. This case was debated in the Western Australian Parliament. Similarly, the length
of delays can be extensive and involve periods of several months to over one year.
1
See https://www.nbnco.com.au/corporate-information/about-nbn-co/updates/dashboard-august-2020 (accessed
15 October 2020).
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The current legislation and policy
As noted above, incorporated developers are prohibited from selling or leasing a building lot
or a building unit if fibre-ready facilities have not been installed in proximity to the lot or
unit. This prohibition does not apply to unincorporated developers, as this was the approach
taken at the time.
Under the Act, or subordinate legislation, there are also exemptions from the requirements to
install fibre-ready facilities in certain specific circumstances. For example, developments in
rural or remote areas that are not scheduled to be serviced by fixed-line by NBN Co, and that
meet certain criteria, do not need to be provided with pit and pipe infrastructure. These
exemptions continue to be appropriate.
The statutory requirement is backed up by the Commonwealth Telecommunications in New
Developments (TIND) policy, which states that all developers (whether incorporated or
unincorporated) should provide pit and pipe infrastructure to developments, and also arrange
with a telecommunications carrier to connect a development to a network. This policy has
been in place since 2011, with the current version taking effect on 1 September 2020.2 Most
developers follow the policy, as otherwise they would have difficulty selling or leasing their
properties and consumers would be inconvenienced.
Some states and territories have adopted planning requirements that reflect those in Part 20A,
and sometimes those in the TIND policy, in which case unincorporated developers in those
jurisdictions are also required to install pit and pipe infrastructure. The requirements are in
place (to varying degrees) in the Australian Capital Territory, New South Wales, Queensland
and Victoria. Western Australia is considering requiring developers to install pit and pipe
infrastructure. South Australia and Tasmania currently do not have requirements of this sort.
2. Government's objectives
The Government's objective is to increase the provision of pit and pipe infrastructure by
small unincorporated developers to reduce the disadvantage to consumers, and to provide a
more effective model that states and territories can reflect in their planning laws if they wish.
3. Structure of the RIS
The RIS:
sets out seven options (below) to address the Government's objective, and assesses
the strengths and weaknesses of those options;
assesses the impacts of those options on stakeholders; and
assesses the costs of the options.
The criteria used to evaluate the options are effectiveness in addressing the problems, and the
regulatory costs of compliance.
4. Overview of options
We have identified seven different options.
2
Available at https://www.communications.gov.au/policy/policy-listing/telecommunications-new-
developments.
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1. Status quo. No change to current arrangements, meaning a small number of
consumers each year would face additional costs and delays in obtaining
telecommunications in their homes or places of business.
2. Raise awareness within the developer and buyer community. The Department of
Infrastructure, Transport, Regional Development and Communications (the
Department) would increase efforts to raise awareness amongst small and
unincorporated developers and property buyers about the problems not installing pit
and pipe infrastructure can cause.
3. Liaison with state, territory and local governments. The Department would continue
efforts to encourage state, territory and local governments without requirements for
developers to install fibre-ready facilities to amend their planning requirements. It
would be a matter for those governments what, if anything, they choose to do.
4. Legislation to require unincorporated developers to provide pit and pipe. Part 20A of
the Act would be amended so that unincorporated developers must also make
arrangements for pit and pipe infrastructure to be installed before selling or leasing a
building lot or building unit.
5. Legislation to require disclosure. Part 20A of the Act would be amended so that all
developers, incorporated or unincorporated, must disclose to prospective buyers or
tenants whether they have installed pit and pipe infrastructure (or whether an
exemption applies, for example because the development is in a region served by
fixed wireless). This option could be adopted in place of option 4 or in addition to it.
6. Legislation to provide a compensation mechanism. Part 20A of the Act would be
amended to provide a right for consumers to seek compensation from a court (e.g. the
Federal Circuit Court of Australia or a State or Territory court that has jurisdiction) if
fibre-ready facilities were not installed or were defective. This option could be
adopted on its own or in addition to option 4 or option 5.
7. Legislation to require the installation of networks. New legislation would be prepared
to require all developers to contract with a carrier to have network infrastructure
installed. Carriers typically require developers to have pit and pipe infrastructure
installed as a condition of their contract to service the development, and to follow the
carrier's specification and certification requirements, reducing the incidence of
defects. This approach would increase the installation of enabling pit and pipe and
networks. It would also have the benefit if ensuring network infrastructure is installed
as well as pit and pipe infrastructure. The legislation would recognise there is a
competitive market to supply networks and developers could contract with the
network provider of their choice.
5. Analysis of the options
Option 1 (status quo) would have no regulatory impacts, but also would not address the
problem (i.e., a small number of unincorporated developers each year would continue to sell
or lease premises without fibre-ready facilities, or with facilities that are defective).
Purchasers of some homes would continue to be disadvantaged, as they would have a
9
reasonable expectation the home has ready access to broadband services, as with other
utilities such as water, gas and electricity. As noted, COVID-19 has reinforced the essential
nature of broadband services for most households.
Option 2 (awareness raising) is one of the options the Department has been pursuing since
the National Broadband Network was announced in 2009. The awareness raising costs would
be incurred on a continuing basis. The cost would fall largely on the Department and be
relatively modest. The high level of compliance in the developer sector with pit and pipe
infrastructure requirements suggests a high level of success (albeit backed up by legal
requirements for incorporated developers) but the ongoing low-level non-compliance
suggests a persistent awareness-raising problem in this area. Even if efforts achieved 100%
awareness, in the absence of binding requirements some developers could still choose not to
install pit and pipe infrastructure.
Option 3 (liaise with states etc) is also one of the options the Department has been pursuing
since 2009. In that time most states and territories have adopted requirements in their
planning laws, but a number have not. Option 3 would not have any regulatory impacts as it
would be a matter for those jurisdictions which do not currently have requirements whether
they would change their laws or not. However, it carries a risk that no changes are made, and
therefore may not address the problem.
Option 4 (legislate for pit and pipe) would address the problem but would have regulatory
costs for unincorporated developers, although this is a cost most developers already accept
and is an inevitable consequence of dealing with the substantive problem of non-compliance
with reasonable community expectations. Conversely, the cost to developers could be
recovered through property prices and would be lower than retrofitting and other cost impacts
on affected consumers. Pit and pipe infrastructure should enhance the value of properties and
therefore option 4 should ultimately benefit developers in aggregate. Where states and
territories already have planning requirements for pit and pipe infrastructure, they do so by
reference to the requirements in the Act. Given this, while there may be some need for states
and territories to adjust their documents, overall any changes required should be minor.
To the extent that developers do not comply with the law (noting that some incorporated
developers currently appear not to), option 4 on its own would not completely address the
problem. Compliance should be aided by ongoing awareness raising and complementary state
and territory measures. Ultimately compliance may need to be reinforced by enforcement
action, however, in the absence of a statutory requirement there is no basis for enforcement.
Option 5 (legislate for disclosure) would not directly require unincorporated developers to
install fibre-ready facilities, but would rely on informed disclosure. That is, if a potential
buyer or lessee of a property is advised that no fibre-ready facilities have been installed (and
no exemption applies) then it is assumed that most rational consumers would refuse to buy or
let the property, or would pay less, reflecting the cost of retrofitting the property. In this way,
over time, developers would amend their behaviour because it would be difficult for them to
sell or lease properties without fibre-ready facilities. That said, consumers may value other
factors in making their decision, be in a hurry, or not read documents they are given, or not
understand them, so this option does carry a risk that some developers continue not to install
facilities and therefore some consumers continue to face additional costs and delays.
To the extent this option's intent is to have the developers concerned actually provide pit and
pipe infrastructure, it is little different in effect from option 4, but it would be less direct and
less certain.
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Option 6 (legislate for compensation) could be adopted on its own (in which case it would
only provide a compensation mechanism where incorporated developers have not complied
with the Act) or in conjunction with option 4, where it would provide additional incentive for
developers (incorporated or unincorporated) to comply with the Act. If option 6 were adopted
on its own, it would not address the problem of unincorporated developers not installing
fibre-ready facilities. It might be adopted with option 5 but it would need to be tailored to
provide for compensation where there has been no disclosure or inadequate disclosure (which
would likely be rare). Fundamentally, however, it does not directly address the problem of
developers not installing facilities in the first place and the additional cost of retrofitting, and
adds an extra enforcement cost without addressing the issue more directly.
Option 7 (legislate for network installation) would rectify the problem and go beyond it to
ensure network infrastructure would also be installed, providing developers complied with
the new law. There would be the substantive cost for developers of contracting a carrier to
install network infrastructure and installing pit and pipe infrastructure if they require that.
However, most developers already do this as a matter of course as access to
telecommunications is generally seen as a necessary feature for selling properties. Therefore
the additional substantive regulatory cost would largely fall on the developers who are not
doing what the community would expect of them. In addition to the substantive cost, there
would be some administrative costs for government in terms of raising awareness of the new
requirements and developers in terms of confirming compliance, if a proactive compliance
regime was adopted.
6. Analysis of the Costs
Options 4, 5, 6 and 7 would directly impose regulatory costs on developers. If option 3
proceeded it would have a similar impact to option 4, because state/territory and local
governments would amend planning laws to require the installation of pit and pipe. Option 4
imposes costs in relation to installing pit and pipe. Option 5 imposes costs in relation to
creating and administering disclosure notices. Option 6 may involve costs comparable to
those under option 5 but this would be at the discretion of a developer. Option 7 would
impose costs in relation to installing pit and pipe and network installation.
Option 4 costs: The cost of installing pit and pipe infrastructure to a building has been
estimated at $600-$800. This is significantly lower than the potential cost to consumers of
retrofitting the facilities. The average cost of retrofitting pit and pipe has been estimated at
$2,100, depending on the amount of civil works required. Developers can recover the cost of
installing pit and pipe infrastructure through sale or lease prices. Generally property buyers
and/or tenants would need to meet these retrofitting costs. As noted above, they could also
face significant delays in being able to access fixed-line telecommunications services, and
could therefore also face additional costs in sourcing interim services.
Industry data indicate that, during 2019, on average about 1,500 premises each month were
experiencing delays because pit and pipe infrastructure had not been installed or could not be
certified because it was defective. Premises may be delayed for several months, and the
precise number of delayed premises per year is not known. The Department estimates that
about 6,000 unique premises in any year are affected. The data indicate that most of these
premises are developed by small developers and about half of these are unincorporated
developers. Given these estimates, the cost of complying for these unincorporated developers
in any year would be 3,000 (i.e. 6,000/2) x $800, or about $2,400,000). The costs would be
passed through to consumers, but they are lower than the likely costs to consumers of
retrofitting their premises (6,000/2 x $2,100, or about $6,300,000).
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Option 5 costs: In relation to option 5 we estimate developing a disclosure document would
require at most about five days' work (including legal and management clearances) for any
developer, which means a one-off cost per developer of $2,922 (derived from the average
labour rate, including 75 per cent on costs, of $73.05 per hour, as set out in the OBPR guide
to regulatory burden measurement). Industry information indicates that there are over 1,000
large developers and over 10,000 small developers. We also note many homes are developed
by owners (for example by knocking down an old house and building a new one at the same
site), but these homes would not be subject to a disclosure requirement as the homes are
being built for occupation rather than sale or lease.
Given these data, there would be a cost under option 5 of at least 11,000 x $2,922, or
$32,142,000. Developers would need to incur this cost once (though some ongoing costs
would also need to be met, as set out below).
Some ongoing costs are likely to be required as developers would need to confirm fibre-ready
facilities had been installed each time they prepare documents for a new development. These
costs are unlikely to be as significant as the one-off costs involved with developing new
documentation. For example, it could be a few hours' work for a person to prepare and check
the standard document. Some developers may develop several different properties each year,
whereas others may develop no more than one (for example, where a business was created
simply to develop and manage a single apartment block). If we assume that about 3000
developers may be involved in at least three different developments each year, then the
ongoing cost would be 3000 x (3 x $73.05) or $657,450.
If option 5 was adopted in addition to option 4, then both sets of costs would apply.
Option 6 costs: Option 6 may involve costs comparable to those under option 5 as developers
would be likely to put in place administrative processes to disclose whether or not pit and
pipe was installed to mitigate the risk of legal action for compensation. If legal action was
initiated, there would be the cost of defending that action and the cost of any compensation
awarded, which presumably would be reflective of retrofitting costs, which are generally
accepted to be much higher than prior installation costs (see above in section 4). Under option
6, however, it would be a matter for the developer whether to provide disclosure, so this is
not a direct regulatory cost.
Option 7 costs: Option 7 would involve similar costs to those under option 4 ($2.4 million),
plus additional costs for network installation. Noting that most developers already meet these
costs as a normal course of business, using the numbers cited in option 4 for affected
premises, we would estimate the additional cost for network installation to be between $2.4
million and $3.6 million. This is based on 6,000 affected premises and the standard NBN Co
upfront new development charges of $400 for apartments and $600 for single dwelling units.
These costs would typically be passed through to property buyers, who could also pay them
in full or part with some pass through to tenants, setting aside possible deductions for taxation
purposes.
The net benefits of options 1-7 are set out in the table below. The table sets out any estimated
new costs of the option and compares those costs to the potential saving for consumers, to
calculate the net benefits. Potential savings for consumers are determined by using the
estimated cost of $6,300,000 for retrofitting their premises, as set out under option 4 above.
Option Costs of compliance Annual Net benefit
(Saving for consumers
12
minus cost of compliance)
1 Nil (no change) Nil (no change, estimated
cost impact remains
$6,300,000)
2 Nil (voluntary change for Nil (unlikely to lead to
developers) significant change,
estimated cost impact
remains $6,300,000)
3 Nil (voluntary change for Nil (unlikely to lead to
other jurisdictions) significant change,
estimated cost impact
remains $6,300,000)
4 $2,400,000 $3,900,000 ($6,300,000
minus $2,400,000)
5 $32,799,450 (option 5 -$26,499,450 ($6,300,000
costs alone) minus $32,799,450)
6 Similar to option 5 Similar to option 5
7 $6,000,000 (for installing $300,000 ($6,300,000
pit and pipe and minus $6,000,000)
networks)
The table shows that option 4 provides the greatest net benefit.
7. Consultation
The Department released a draft of this RIS and the legislation for public comment on
29 August 2020. Eight submissions were received, from telecommunications network
providers, developer groups, consumer organisations and state government agencies. The
submissions have been published at www.communications.gov.au/have-your-say/options-
boosting-pit-and-pipe-new-developments. There was also further discussions with submitters
at which proposals were clarified and responses further explained or modified.
Most submitters, but not all, supported extending the current statutory requirements to
capture unincorporated developers. Developer groups and state government agencies
generally supported options 2 and 3, as part of a comprehensive approach that could also, if
legislation was practical and preferred, include option 4. Telecommunications providers and
consumer organisations also supported options 2 and 3 as part of a broader suite of options
that could include options 4 and 7 or options 5 and 6 as well. They did not consider that
options 2 and 3 would, on their own, significantly boost the installation of pit and pipe
infrastructure.
There was little support for requiring developers to provide disclosure or to create a
compensation mechanism. In relation to disclosure, developer groups argued it would create a
large compliance cost that was disproportionate to the scale of the problem.
Telecommunications network providers and consumer groups also argued that it did not in
13
itself resolve the problem of developers not installing facilities, and noted that consumers
may not understand disclosure documents or ignore them because of other incentives.
In relation to option 6, telecommunications providers and developer groups were concerned
about the potential costs of court action. The Telecommunications Industry Ombudsman
noted that costs could be addressed by implementing an alternative dispute resolution
scheme. The Australian Communications Consumer Action Network noted that this option
did not by itself address non-compliance by developers, but observed that in combination
with options 4, 5 or 7 it could provide extra incentives for compliance.
Telecommunication providers and consumer organisations supported option 7 as best
ensuring that occupants of premises in new developments would have ready access to
telecommunications. One observed that this option would set out in legislation what the
TIND policy already requires, and that it would be the 'clearest and most direct way to
achieve the objectives'. Against this, developer groups and state government agencies did not
support the option on the basis that it could increase compliance costs. One
telecommunications provider noted that, given the Government's generally light touch
approach to the sector, 'it may be sensible to pursue options 3 and 4 in the first instance, and
assess whether they achieve their desired effect over time. If they do not, then option 7 could
be reconsidered at a later date.'
8. Preferred Option
The preferred option is a combination of options 2, 3 and 4. It is important to raise awareness
amongst developers and buyers so that they are aware of the importance of installing pit and
pipe, and of statutory obligations. This should continue whether legislation is introduced or
not. Similarly, it is also important that the Department continues to liaise with state, territory
and local governments, so that they can take action on the issues and implement any changes
required following changes to Commonwealth legislation.
Options 2 and 3 on their own, however, would not address the fundamental issue that some
developers do not install pit and pipe infrastructure. They may be aware of the importance of
pit and pipe infrastructure but prefer to avoid the cost and pass the expense on to occupants.
As a result, the Department considers that option 4 should be adopted as well, so that there is
a clear statutory obligation on all developers, incorporated or unincorporated. Most
submitters supported this approach in some way.
There is always a risk that, even with a statutory obligation in place, some developers will not
comply. As noted in section 4, about half of the premises which do not currently have pit and
pipe infrastructure installed are developed by incorporated developers. While the
telecommunications regulator could take enforcement action, it may face resourcing issues
and enforcement action may not help occupants recover their expenses. The Department
considers compensation is an important principle, but notes the general concern in
submissions about the costs of taking court action. The Department does not therefore
propose to proceed with this option at this point, but will undertake further analysis and
consultation.
Option 5 should not be adopted as options 4 and 6 between them would address the issue in a
more concrete way with lower compliance burdens for developers.
While option 7 would provide a comprehensive approach to the installation of
telecommunications in new developments, this does not need to be adopted at this time given
the preference for a lighter touch policy approach.
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9. Implementation and Evaluation
The Department will continue to deliver options 2 and 3 as part of its ordinary activities. In
relation to option 4, legislation will be prepared for introduction into the Parliament.
Interested parties would have the ability to comment on the legislation during passage, for
example if it is considered by a Senate Legislation Committee.
If legislation is passed by the Parliament the requirements on unincorporated developers
would need to be adopted by state and territory planning agencies, and in turn would flow
through to local government requirements. The Department would monitor this and also
monitor the impacts of legislation on an ongoing basis.
15
ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum:
ACMA Australian Communications and Media Authority
Act Telecommunications Act 1997
AIA Acts Interpretation Act 1901
Bill Telecommunications Amendment (Infrastructure in
New Developments) Bill 2020
Department Department of Infrastructure, Transport, Regional
Development and Communications
Minister the Minister responsible for administering the
Telecommunications Act 1997
NBN National Broadband Network
NBN Co NBN Co Limited
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NOTES ON CLAUSES
TELECOMMUNICATIONS AMENDMENT (INFASTRUCTURE IN NEW
DEVELOPMENTS) BILL 2020
Clause 1 - Short title
Clause 1 provides that the Bill, when enacted, may be cited as the Telecommunications
Amendment (Infrastructure in New Developments) Act 2020.
Clause 2 - Commencement
Clause 2 provides for the commencement of provisions in the Bill when enacted.
Item 1 of the table at subclause 2(1) provides that the whole of the Act would commence on
the day after the Act receives the Royal Assent.
Clause 3 - Schedules
Clause 3 provides that legislation that is specified in a Schedule to the Bill is amended or
repealed as set out in the applicable items in that Schedule, and any other item in a Schedule
has effect according to its terms. There is one Schedule to the Bill.
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Schedule 1--Amendments
Part 1--General Amendments
Part 1 of Schedule 1 to the Bill contains amendments to the Act (Items 1 to 18 inclusive).
Telecommunications Act 1997
Item 1 - Section 7 (definition of fibre-ready facility)
Item 1 makes a change to the definition of 'fibre-ready facility' in section 7 of the Act, to
refer to 'subsection 372W(1)' rather than 'section 372W' as is currently the case. This
amendment is consequential to the amendments introduced at Items 17 and 18, which would
add the concept of a 'functional fibre-ready facility' in section 372W of the Act.
Item 2 - Section 7
Item 2 amends section 7 of the Act to insert a new definition of 'functional fibre-ready
facility'. This is defined to have the meaning given by subsection 372W(2). Subsection
372W(2) is to be inserted by Item 18 of the Bill.
Item 3 - Section 372A
Item 3 amends the simplified outline of Part 20A of the Act in section 372A. The current
description states that developers of real estate development projects who are constitutional
corporations must not sell or lease a building lot or building unit unless a fibre-ready facility
is installed in proximity to the lot or unit. The simplified outline is amended to reflect the
amendments introduced by the Bill. The outline is amended to add the following descriptions:
Developers of real estate development projects in a Territory who are not
constitutional corporations, must not, in the course of carrying out the project, sell or
lease a building lot or building unit unless a functional fibre-ready facility is installed
in proximity to the lot or unit.
Developers of real estate development projects in a State who are not constitutional
corporations, must not, in the course of carrying out the project, sell or lease a
building lot or building unit unless a functional fibre-ready facility is installed in
proximity to the lot or unit.
Item 4 - Subsections 372G(2) and 372(4)
Item 4 is the first of two key clauses in the Bill that extend the existing prohibition in Part
20A of the Act to all developers, whether incorporated or unincorporated (the other is Item
8).
Item 4 repeals subsections 372G(2) and 372G(4) of the Act, and substitutes them with six
new subsections (proposed subsections 372G(2)-(5)), setting out 'requirements' for
developers of building lots and building units in subdivisions.
The amendments have the following effect:
Building lots
If the preconditions in subparagraph 372G(1)(b)(i) apply to a building lot (i.e., the project
involves the making available of one or more lots for sale or lease where it would be
reasonable to expect that building unit(s) would subsequently be constructed on the lots, and
sewerage services, electricity or water is, are or will be supplied to those lots):
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developers who are constitutional corporations must not sell or lease building lots unless
a functional fibre-ready facility is installed in proximity to the lot (proposed new
subsection 372G(2));
if the lot is in a Territory, developers who are not constitutional corporations must not sell
or lease building lots unless a functional fibre-ready facility is installed in proximity to
the lot (proposed new subsection 372G(2A)); and
if the lot is in a State, developers who are not constitutional corporations must not sell or
lease building lots unless a functional fibre-ready facility is installed in proximity to the
lot (proposed new subsection 372G(3)).
Building units
If the preconditions in subparagraph 372G(1)(b)(ii) apply (i.e., the project involves the
construction of one or more building units on any of the building lots and the making
available of any of those building units for lease or sale and sewerage services, electricity or
water is, are or will be supplied to those units):
developers who are constitutional corporations must not sell or lease building units unless
a functional fibre-ready facility is installed in proximity to the unit (new subsection
372G(4));
if the lot is in a Territory, developers who are not constitutional corporations must not sell
or lease building units unless a functional fibre-ready facility is installed in proximity to
the unit (new subsection 372G(4A)); and
if the lot is in a State, developers who are not constitutional corporations must not sell or
lease building units unless a functional fibre-ready facility is installed in proximity to the
unit (new subsection 372G(5)).
Notes are provided in relation to each of the new subsections (2) to (5), drawing the attention
of the reader to the definition of 'functional fibre-ready facility' at section 372W (Note 1), the
definition of 'proximity' at section 372Y (Note 2) and exemptions from the requirements as
provided for by section 372K (Note 3).
'Proximity' is currently defined at section 372Y. The key characteristic is that a facility
would be in proximity to a building lot or a building unit if, and only if, it is installed so as to
enable a line to be readily connected to a building unit.
'State' and 'Territory' are not defined in the Act, so the definitions at section 2B of the AIA
are intended to apply in this case. State is defined there as a State of the Commonwealth and
Territory means a Territory referred to in section 122 of the Constitution.
The requirements in subsections 372G(2)-(5) are only activated (as is currently the case under
section 372G) when real estate development projects in subdivisions meet criteria set out in
subsection 372G(1) of the Act. Generally speaking, the requirements in section 372G only
fall upon real estate development projects that involve the sale or lease of building lots or
units (and not, for example, a development that involves an owner building a house in which
he or she intends to live), and also only fall upon lots or units where basic utilities are or will
be available.
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Item 5 - Section 372G(6)
Item 5 amends subsection 372G(6) to replace references to 'subsections (2) or (4)' with
references to 'subsections (2), (2A), (3), (4), (4A) or (5)'. Subsection 372G(6), as amended,
would provide for ancillary contraventions of subsections (2), (2A), (3), (4), (4A) and (5)
(such as aiding or abetting a contravention). This change is consequential to the amendments
to section 372G made by Item 4 above.
Item 6 - Subsection 372G(7)
Item 6 amends subsection 372G(7) to replace references to 'subsections (2), (4) and (6) with
references to 'subsections (2), (2A), (3), (4), (4A), (5) and (6)'. Subsection 372G(7) lists the
subsections within section 372G that are civil penalty provisions. This change is
consequential to the amendments to section 372G made by Item 4 above.
Item 7 - Subsection 372G(8)
Item 7 amends subsection 372G(8) to replace references to 'subsections (2) or (4)' with
references to 'subsections (2), (2A), (3), (4), (4A) or (5)'. Subsection 372G(8), as amended,
would provide that contraventions of the listed subsections do not affect the validity of any
transaction. This change is consequential to the amendments to section 372G made by Item 4
above.
Item 8 - Subsection 372H(2)
Item 8 is the second of two key clauses in the Bill that extend the current prohibition in Part
20A of the Act to all developers, whether incorporated or unincorporated (the other is Item
4). Item 8 repeals subsection 372H(2) of the Act, and substitutes it with three new
subsections (proposed subsections 372H(2), (3) and (3A)), setting out 'requirements' for
developers of building units in projects that are not subdivisions.
The amendments have the following effect:
If a real estate development project involves the construction and making available for sale or
lease one or more building units that have or will have sewerage services, electricity or water
supplied to those units:
developers who are constitutional corporations must not sell or lease a building unit
unless a functional fibre-ready facility is installed in proximity to the unit (new subsection
372H(2));
if the building unit is in a Territory, developers who are not constitutional corporations
must not sell or lease the unit unless a functional fibre-ready facility is installed in
proximity to the unit (new subsection 372H(3)); and
if a building unit is in a State, developers who are not constitutional corporations must not
sell or lease the unit unless a functional fibre-ready facility is installed in proximity to the
unit (new subsection 372H(3A)).
Notes are provided in relation to each of the subsections drawing the attention of the reader to
the definition of 'functional fibre-ready facility' at section 372W (Note 1), the definition of
'proximity' at section 372Y (Note 2) and exemptions from the requirements as provided for
by section 372K (Note 3).
As noted in the discussion in relation to Item 4, a facility is in proximity to a building lot or a
building unit only if a line can be readily connected to a building unit, and the definitions of
'State' and 'Territory' in the AIA would be taken to apply in this Act.
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Item 9 - Subsection 372H(4)
Item 9 amends subsection 372H(4) to replace references to 'subsection (2)' with references to
'subsections (2), (3) or (3A)'. Subsection 372H(4), as amended, would provide for ancillary
contraventions of subsections (2), (3) and (3A) (such as aiding or abetting a contravention).
This change is consequential to the amendments to section 372H made by Item 8 above.
Item 10 - Subsection 372H(5)
Item 10 amends subsection 372H(5) to replace references to 'subsection (2) and (4)'with
references to 'subsections (2), (3), (3A) and (4)'. Subsection 372H(5) lists the subsections
within section 372H that are civil penalty provisions. The change is consequential to the
amendments to section 372H made by Item 8 above.
Item 11 - Subsection 372H(6)
Item 11 amends subsection 372H(6) to replace references to 'subsection (2)' with references
to 'subsections (2), (3) or (3A)'. Subsection 372H(6), as amended, would provide that
contraventions of the listed subsections do not affect the validity of any transaction. The
change is consequential to the amendments to section 372H by Item 8 above.
Item 12 - At the end of Subdivision B of Division 3 of Part 20A
Item 12 adds new section 372J at the end of Subdivision B of Division 3 of Part 20A of the
Act. The new section 372J is a constitutional savings provision, which provides that
Subdivision B does not apply to the extent that the operation of the Subdivision would result
in an acquisition of property from a person other than on just terms. The section defines
'acquisition of property' and 'just terms' to have their meanings under the Constitution.
Item 13 - Subsection 372K(5)
Item 13 amends subsection 372K(5) to replace a reference to 'subsection 372G(2)' with a
reference to 'any or all of subsections 372G(2), (2A) or (3)'. Subsection 372K(5), as
amended, would permit the Minister to exempt building lots from the scope of subsections
372G(2), (2A) or (3). The change is consequential to the amendments to section 372G made
by Item 4 above.
Item 13, together with the amendments proposed at Items 14, 15 and 16 below, would
continue to provide an exemption power to the Minister but align it with the new subsections
to be inserted by Items 4 and 8 above.
Item 14 - Subsection 372K(7)
Item 14 amends subsection 372K(7) to replace the words 'either or both' with 'any or all'.
Currently, subsection 372K(7) provides that the Minister may exempt building units from the
prohibitions in either or both of subsections 372G(4) or 372H(2).
Item 15 - After paragraph 372K(7)(c)
Item 15 would add two new paragraphs after paragraph 372K(7)(c): paragraph (ca) referring
to new subsection 372G(4A), and paragraph (cb) referring to new subsection 372G(5). The
inclusion of the two new paragraphs ensures that the Minister has the power to exempt
building units in subdivisions from the proposed new prohibition in subsection 372G(4A)
(relating to a building unit in a Territory) or subsection 372G(5) (relating to a building unit in
a State) to be inserted by Item 4 above.
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Item 16 - After paragraph 372K(7)(d)
Item 16 would add two new paragraphs after paragraph 372K(7)(d): paragraph (e) referring
to new subsection 372H(3), and paragraph (f) referring to new subsection 372H(3A). The
inclusion of the two new paragraphs ensures that the Minister has the power to exempt
building units (that are not in subdivisions) from the proposed new prohibition in subsection
372H(3) (relating to a building unit in a Territory) or subsection 372H(3A) (relating to a
building unit in a State) to be inserted by Item 8 above.
Item 17 - Section 372W
Item 17 would insert a new subsection number, (1), at the beginning of the current section.
Item 17 is consequential on the insertion of two new subsections by Item 18 below.
Item 18 - At the end of section 372W
Item 18 would add two new subsections (2) and (3), at the end of the current section 372W.
Proposed new subsection 372W(2) defines a 'functional fibre-ready facility' as a fibre-ready
facility that is technically capable of being used in connection with an optical fibre line.
Proposed new subsection 372W(3) states that, in determining whether a fibre-ready facility is
technically capable of being used in connection with an optical fibre line, regard must be had
to applicable industry codes registered, or applicable industry standards determined, under
Part 6 (if any).
Currently, section 372W defines a 'fibre-ready facility' for the purposes of the Act. A fibre-
ready facility is either an underground fixed-line facility, or a fixed-line facility specified in a
legislative instrument made by the Minister. In both cases the facility must be used, or for
use, in connection with an optical fibre line, and must satisfy such conditions (if any) as are
specified in a legislative instrument made by the Minister.
The proposed amendments to be inserted by Items 17 and 18 would retain this definition of a
'fibre-ready facility' and insert a new definition of functional fibre-ready facility. As noted
above, the new obligations to be inserted by Items 4 and 8 above will prohibit developers
who are constitutional corporations, or developers in a State or Territory who are not
constitutional corporations, from selling or leasing building units or building lots unless
functional fibre-ready facilities are installed in proximity to the unit or lot.
The phrase 'technically capable' in proposed new subsection 372W(2) is intended to signify
that any facility must be capable of being put to the technical use intended - that is, that an
optical fibre line can be installed in the facility and a carriage service can be delivered over
the optical fibre line. If a facility has been filled up with concrete or earth, so that an optical
fibre line cannot be installed in it, then the facility would not be 'technically capable of being
used' and therefore would not be a 'functional fibre-ready facility'. Similarly, if a facility has
been constructed in such a way that an optical fibre line can be installed, but no carriage
service can be delivered over it, then the facility would not be 'technically capable' and
therefore not a 'functional fibre-ready facility'.
Proposed new subsection 372W(3) provides the regulator or a court with additional guidance
in determining whether a fibre-ready facility is technically capable of being used in
connection with an optical fibre line. It states that regard must be had to any applicable
industry codes registered under Part 6 of the Act, or applicable industry standards determined
under Part 6 of the Act. There are currently no industry codes or industry standards made
under Part 6 of the Act (though the industry body, Communications Alliance, has made a
guideline, G645:2017 Fibre-ready pit and pipe specification for real estate development
projects).
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Part 2--Application and transitional provisions
Part 2 of Schedule 1 to the Bill contains application and transitional provisions (Items 19 to
20 inclusive).
Item 19 - Application - sale or lease of building lots or building units
Item 19 specifies the circumstances in which sections 372G and 372H of the Act, as amended
by the Schedule, will not apply in relation to a real estate development project. It specifies
that the sections will not apply if, before the commencement of Item 19:
a person who carries out, or carries out an element of the project, began to install
fixed-line facilities in the project area, or any of the project areas, for the project
(paragraph (a)); or
a person who carries out, or carries out an element of the project, entered into a
contract with another person for the installation of fixed-line facilities in the project
area, or any of the project areas, for the project (proposed paragraph (b)); or
civil works associated with the project began to be carried out (paragraph (c)); or
a person who carries out, or carries out an element of the project ,entered into a
contract with another person for the carrying out of civil works associated with the
project (proposed paragraph (d)).
Item 2 of this Bill above provides that Item 19 would commence on the day after this Act
receives the Royal Assent.
Item 19 recognises that persons who are not constitutional corporations, and therefore not
currently subject to the requirements in relation to real estate development projects, may
nonetheless have commenced or contracted civil works associated with these projects, and
that being required to comply with amended sections 372G and 372H could cause costs and
delays for such projects that are under way. Accordingly, the intention is that sections 372G
and 372H as amended by the Schedule should not affect these projects that are in train.
Item 20 - Transitional - constititional corporations
Item 20 provides that a constitutional corporation who began to install, or entered into a
contract for, fixed-line facilities, or commenced or contracted civil works on a real estate
development project, before Item 20 commences, will still be subject to sections 372G and
372H as they existed before commencement of Item 20. The provision is enacted for the
avoidance of doubt.
Item 2 of this Bill provides that Item 20 would commence on the day after this Act receives
the Royal Assent.
Part 3--Technical correction
Part 3 of Schedule 1 to the Bill contains a single item that corrects an error in the Act.
Item 21 - Paragraph 372G(1)(d)
Item 21 corrects a typographical error in paragraph 372G(1)(d) of the Act, substituting 'if' for
'is' where it first occurs.
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