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2008-2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS LEGISLATION AMENDMENT
(FIBRE DEPLOYMENT) BILL 2010
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Broadband, Communications
and the Digital Economy, Senator the Honourable Stephen Conroy)
TELECOMMUNICATIONS LEGISLATION AMENDMENT
(FIBRE DEPLOYMENT) BILL 2010
OUTLINE
The Telecommunications Legislation Amendment (Fibre Deployment) Bill 2010
(the Bill) amends the Telecommunications Act 1997 (the Act) to help
implement the Government's policy that fibre-to-the-premises infrastructure
should be installed in new developments that receive planning approval from
1 July 2010.
The policy of having fibre installed in new developments complements the
Australian Government's historic announcement on 7 April 2009 that it will
establish a company that will invest up to $43 billion over eight years to
build and operate a National Broadband Network delivering super fast
broadband to Australian homes and workplaces. The Government considers it
does not make sense to roll-out a fibre network to up to 90 per cent of
premises, leaving new developments to be serviced by old technology.
The Bill will add a new Part 20A to the Act, the effect of which will be to
require that:
. where fixed telecommunications lines are installed within a specified
new development or an identified class of new developments, the lines
must be optical fibre lines, and any other specified conditions must
be met ('the fibre connection requirement'); and
. where fixed-line facilities (such as pits and ducts) are installed
within a specified new development or an identified class of new
developments, the facilities must be "fibre-ready facilities", and any
other specified conditions must be met ('the fibre-ready
infrastructure requirement').
Proposed Part 20A of the Act is intended to apply to all types of new
developments, including greenfield (broadacre) estates, urban infill and
urban renewal projects. Developments or classes of developments in which
these rules apply would be set out in a legislative instrument made by the
Minister for Broadband, Communications and the Digital Economy (the
Minister). The Bill provides for the Minister to determine what is a
"fibre-ready facility" for the purposes of the fibre-ready infrastructure
requirement. For example, the Minister could determine that for a duct to
be a "fibre-ready facility", it must have a minimum internal diameter (with
a view to enabling the quick and efficient installation of fibre at a later
date).
The provisions will apply whether the real estate development project is
intended to establish building lots, or building units, or both, for either
sale or lease. The fibre connection requirement will not apply to lines
that are not intended to provide a carriage service to the public (e.g. it
will not apply to private networks) or that are not wholly or primarily for
use by an end-user at the end user's premises (e.g. it will not apply to a
line connecting to a mobile phone tower).
By enabling the Minister to specify in a legislative instrument those
developments or classes of developments in which the fibre connection
requirement or the fibre-ready infrastructure requirement apply, the
legislation enables the Minister to implement the Government's policy on a
targeted basis that can take account of market circumstances on a regional
or local basis and changes in them over time. For example, the Minister
could:
- nominate developments where the fibre connection requirement is to
apply by setting the characteristics of such developments with
reference to matters such as the anticipated cost per dwelling of
installation of optical fibre lines; or
- identify the developments in which the fibre-ready infrastructure
requirement is to apply with reference to the location of developments
or a threshold for the size of such developments (e.g. developments
containing at least a certain number of dwellings).
While not addressed in the Bill, it is envisaged, although not strictly
necessary, that this legislation will be complemented by changes to state,
territory and local planning arrangements, which would further support the
roll-out of fibre-to-the-premises, and where necessary, the installation of
fibre-ready facilities, which might include appropriate ducting in the case
of an underground deployment. However, the Bill can operate even in the
absence of complementary state and territory laws.
The Bill also enables the Minister to specify in a legislative instrument
exemptions from the fibre connection requirement and from the fibre-ready
infrastructure requirement, where these rules would otherwise apply. For
example, the Bill would permit the Minister to allow non-fibre fixed
infrastructure (e.g. copper) to be installed in certain circumstances (e.g.
where customers have equipment that requires the use of a non-fibre line).
To ensure that carriers are able to gain access to the fibre-ready
facilities installed in accordance with the fibre-ready infrastructure
requirement, the Bill provides for the establishment in later regulations
of an access regime that would require third party access to those
facilities to be given. It is intended that regulations will be developed
requiring the installer (or a subsequent owner) of such facilities to give
access to the facilities for the purpose of carriers installing optical
fibre.
Installation in developments that are specified by the Minister of lines
that are not optical fibre or of facilities that are not fibre-ready would
be subject to civil penalty provisions under the Act. The enforcement
regime will apply to both carriers and non-carriers, consistent with
application of the Act.
The Bill also amends Part 6 of the Act, which deals with industry codes and
standards, to more readily enable the development of industry codes and
standards relating to fibre optic lines and related facilities, and to give
further examples of the types of topics which industry codes or standards
might cover. In addition to providing necessary guidance on relevant
technical matters, these measures respond to calls from stakeholders for
such guidance to promote nationally consistent network and service
outcomes.
FINANCIAL IMPACT STATEMENT
The administration costs of the Department of Broadband, Communications and
the Digital Economy will be met from Departmental funding.
REGULATION IMPACT STATEMENT
The provision of fibre-to-the-premises in new developments and the
Telecommunications Legislation Amendment (Fibre Deployment) Bill 2010
1. Identifying the problem
Background
Context
The Government is committed to providing high speed broadband access to
Australian homes and businesses. On 7 April 2009 it announced that it would
establish a majority Commonwealth owned company to invest up to $43 billion
in partnership with the private sector to build a new superfast fibre optic
based National Broadband Network (NBN). The NBN will connect up to 90 per
cent of Australian homes, schools and work places with 'fibre to the
premise' (FTTP) technology delivering broadband speeds of 100 megabits per
second, around 50 to 200 times faster than many broadband services that
people use today. Remaining premises will be covered by next generation
wireless and satellite technologies delivering speeds of 12 megabits per
second or more.
An important adjunct to the decision to roll-out the NBN was that the
Government would progress legislative change to ensure that FTTP is
installed in new developments that receive planning approval from 1 July
2010. For convenience, this initiative is known as the 'fibre in
greenfields' policy. With fibre infrastructure being rolled out generally
in established 'brownfield' areas, it also makes sense to have this
technology installed in Australia's newest premises as they are built to
ensure people have access to superfast broadband services from the day they
move in.
The benefits of FTTP
FTTP is widely recognised as the optimal communications technology for the
future. This is reflected in trends in the United States where it has been
estimated that, by 2011, 25 per cent of homes will be passed by fibre[1].
FTTP will provide significantly faster broadband speeds, thereby supporting
greater simultaneous use of existing applications and a platform for new
bandwidth-intensive applications. FTTP will also provide capacity for
future growth in the use of broadband applications, is readily upgradeable
and will lead to significant direct and indirect economic, environmental
and social benefits. For instance, superfast broadband will be an enabler
for businesses in new developments; it will ameliorate problems of social
isolation by creating opportunities for communication within social groups
and families; and it has the potential to reduce energy consumption and
greenhouse gas production both directly because fibre networks can be more
energy efficient and indirectly because it presents opportunities for
reductions in travel through videoconferencing and teleworking. These and
other benefits are explored in more detail in the Impact Analysis.
Historical approach to providing telecommunications in new developments
Historically, new developments have generally been serviced by copper-based
telecommunications networks which have provided voice services, and over
the past decade or so, digital subscriber line (DSL) based broadband
services. These installations have generally been undertaken by Telstra,
largely reflecting its status as the universal service provider.
The capacity of copper-based networks to deliver high speed broadband
services is significantly inferior to FTTP networks. This capacity is
affected by such factors as the quality of the copper, distance from the
exchange, the availability of spare ports and the presence of network
electronics such as remote integrated multiplexer (RIM) and pair gain
systems. The limitations of copper can lead to poor broadband services or
no broadband services at all.
The tendency to install old technology in new estates has been slowly
changing. In recent years there has been increasing deployment of FTTP in
new estates across Australia. Forward-looking developers and local councils
have recognised that FTTP networks provide additional benefits to
households, add value to properties and become a selling point as the
availability of superfast broadband becomes the expectation for all
businesses and consumers. In the United States, it is estimated that
having a fibre connection can add approximately $US5,000 to the value of a
home[2].
Australian FTTP providers vary in size, operating model and the areas in
which they operate. Known providers of FTTP in new estates in Australia
include Arise, BES/E-Wire, Clubcom, OPENetworks, Opticomm, Pivit, Service
Elements, Telstra and TransACT. Fibre has been installed in estates in all
States and Territories. There are plans for further developments in all
States and Territories[3].
Increasing demand for FTTP facilities as a result of this initiative is
likely to result in the growth of the sector. Currently Australia has over
200 licensed carriers and many would be potential providers of FTTP in new
developments. The market may also be of interest to civil engineering firms
that provide services to carriers and others.
Key parameters: number of premises and costs per premises
Two parameters are key to discussion of implementation of the fibre in
greenfields policy: the number of premises involved and the cost of
providing telecommunications to premises. This section provides contextual
information on both of these. Cost issues are discussed further in the
'Impact Analysis' section.
Number of new premises built per year
There are around 150,000 new dwellings[4] constructed each year. In
addition, it is estimated that there are around 60,000[5] other premises
such as commercial, industrial and government premises constructed per
annum.
To enable an indicative comparison of options, costs are compared on the
basis of capturing 90 per cent of premises with fibre (i.e. 189,000), this
being consistent with the Government's objective of servicing 90 per cent
of existing premises with FTTP and that FTTP may not be required in some
instances for other reasons.
That said, the precise cost of implementing the policy will depend on the
exact number of premises ultimately affected by it and the mix of
approaches (i.e. fibre versus fibre-ready versus doing nothing) that may
apply to them.
Costs per premises
The following information relates to the cost of different approaches to
providing fixed telecommunications in new developments.
There are a number of costs associated with connecting new developments
which are common, irrespective of whether copper or FTTP is installed.
These include civil engineering costs, such as design, trenching and
ducting. They also include the cost of providing backhaul from the new
development to an appropriate point of interconnection in the existing
network. These costs may be minimal if backhaul infrastructure is readily
available in a location. If new backhaul infrastructure is required, the
capital cost is variable, depending on the location of the development
relative to the existing network and whether existing facilities can be
used. By way of guidance, backhaul for some developments has cost $400,000-
$700,000. The cost per lot will depend on the number of lots in the
development.
There are also costs which are more variable. These include the cost of the
line to be installed (e.g. copper versus fibre) and the electronics
required. For example, both copper and fibre-based broadband require
electronics in the exchange or the node and in the customer's premises.
However, the costs of these differ, as can the incidence of those costs.
For the purposes of this Regulation Impact Statement, key provisioning
scenarios and the estimated total cost per premises of each scenario are:
. providing copper connections, with broadband capability, at around
$1,000;
. connecting FTTP to new premises, at around $2,500 per lot;
. retrofitting premises that are connected with copper with FTTP where
fibre-ready infrastructure is installed, at around $3,000 per lot (i.e.
$1,000 for copper and fibre-ready infrastructure plus $2,000 for
retrofitting FTTP); and
. retrofitting premises that are connected with copper with FTTP where no
fibre-ready infrastructure has been installed, at around $4,000 per lot
($1,000 for initial copper installation plus $3,000 for retrofitting
FTTP).
Another possible scenario that has been raised is that of installing fibre-
ready passive infrastructure in new developments but servicing them with
wireless technology on an interim basis pending the provision of fibre.
This is effectively treated as a variant of the scenario of providing a
copper solution and fibre-ready infrastructure with this to be later
retrofitted with fibre. It is estimated that the per premises cost of this
scenario would be less than that of an interim copper solution but it would
not be able to support high demand for high-speed broadband services over
an extended period.
These estimates are informed by international benchmarks, consultations and
expert input. The estimates are considered to be conservative. In
particular, the cost of $2,500 for an FTTP connection is a midpoint figure
amongst a number of available estimates ranging from $1,500 to $3,500[6].
They have been developed independently of the NBN Implementation Study and
as such they should not be construed as reflecting on the findings of that
study. Once the findings of the Implementation Study have been fully
considered, they should permit the refinement of these estimates. It may
well be that that work will confirm much lower per lot costs than are
assumed here, and there may be significant differences in the assumptions
made and the cost elements included in estimates. All indications are the
estimates used here are cautious and as such should reflect a considerable
safety margin.
To put this cost into context, a submission to the Public Works Committee
by the Land Management Corporation (South Australia) estimated the per lot
costs for one development to be $2,500 for water, $3,200 for stormwater,
$4,800 for power and $4,800 for sewerage[7].
It is the practice at the moment that developers bear these costs initially
although to a greater or lesser degree they may be recovered from
purchasers.
There may also be some other costs to stakeholders, for example to
familiarise themselves with requirements. It is expected these costs would
decline over time as stakeholders became accustomed to the arrangements
(including by the development of guidance for the industry).
The problem
The problem to be addressed is to maximise the installation of FTTP
infrastructure-rather than older copper technology-in new developments that
receive planning approval from 1 July 2010 while taking into account
relevant external factors and minimising costs, particularly as a result of
retrofitting.
Eventually the installation of FTTP in new developments is expected to be a
routine part of the major civil works stage, just like the installation of
other utilities such as roads, electricity, water, sewerage and gas. At
this stage, however, the Government is concerned that, in the absence of
this initiative, developers may chose the cheaper, less capable copper
option instead of FTTP, contrary to the interests of the first owners - and
subsequent purchasers-of new premises. Developers are familiar with the
processes for having copper installed and may have little or no knowledge
about the FTTP alternative. More importantly, however, the cost, effort and
inconvenience of retrofitting with FTTP may be borne by the purchaser and
not by developers, who therefore have an incentive to install the cheaper
copper infrastructure initially.
A small, albeit growing, number of new developments are currently being
constructed with FTTP. It is estimated that around 11,000 dwellings were
connected as at December 2009[8]. The rate of connection is increasing:
about a quarter of these connections were made in 2009. In many cases these
deployments have been supported by forward-looking local government and
state land agencies, including via the use of local planning regulations.
However, those estimated 11,000 premises that have been connected with FTTP
are only a few compared with the number of new premises constructed each
year (an estimated 150,000 dwellings and 60,000 other buildings). In the
absence of Government action, these other premises will, at some stage,
need to be retrofitted at a higher cost than if fibre or fibre-ready
infrastructure were installed in the first place. This cost can be avoided
if FTTP is initially deployed and reduced if fibre-ready infrastructure[9]
is installed.
2. Objectives of government action
The Government's objective is to have FTTP installed in new developments to
the greatest extent practicable and, where this is not immediately
feasible, to have developments made 'fibre-ready': that is, to have
appropriate ducting and other facilities installed in order to avoid more
costly retrofitting later.
The Commonwealth also wants to implement the policy in a manner which
maximises the benefits to be derived from superfast fibre-based broadband
for:
. users;
. competition; and
. the environment.
Complementary objectives are to have nationally consistent network and
service outcomes to the greatest extent possible and that networks in new
developments should be fully interoperable and consistent with the NBN.
A further objective in implementing the policy is to minimise the cost to
the Commonwealth.
Other policy implementation considerations
In designing implementation options, the following considerations also need
to be considered:
. The effectiveness of the measure will be judged in large part by the
number of people who have fibre installed sooner than would otherwise be
the case.
. The policy should take effect as soon as is reasonably practicable:
around 410 houses are being completed each day, and if they do not have
fibre installed at the building stage they will require costly
retrofitting later.
. Planning laws are fundamentally a matter for State and Territory
Governments. It is this system within which developers and builders
generally operate. There may therefore be merit in using these
arrangements.
. The effects on the industry should be considered: in particular, the
measure should not preclude competition among firms for the installation
of fibre networks that provide equivalent consumer experiences. For some
firms, the provision of FTTP in new developments is their key business
activity.
. Compliance costs - both direct costs and associated transactional costs -
should be kept to a minimum.
. The degree of risk and certainty of outcome vary with the different
options.
3. Options
Key options
The Government has consulted widely about how to achieve the installation
of FTTP in new developments and meet its other objectives. There are three
broad options:
1. the provision of fibre in new developments could be left to the market,
noting that the rate of installation, while low, is accelerating; or
2. there could be a requirement that fibre-ready infrastructure, such as
appropriate ducting, be installed at the time of construction so that
FTTP can be retrofitted more efficiently and cost-effectively at an
appropriate time in the future; or
3. there could be a requirement that FTTP be installed when a new
development is constructed.
These three options are not necessarily discrete; some combination of them
may be the most practicable solution. This RIS proceeds on the basis that
the Government's policy may be best effected by requiring some premises to
have FTTP installed, while others have fibre-ready infrastructure installed
and others (like those outside of the fibre footprint) are not subject to
any requirements in relation to FTTP or fibre-ready infrastructure.
Other policy variables
Other policy options are available within the bounds of these three
options.
Firstly, there is a question whether, under any of the options, it is
necessary or desirable for detailed technical and network design
specifications and service outcomes to be specified or whether these
should be left to individual providers. Given the objective that
greenfields networks be consistent and interoperable with the rest of
the national network, the Government considers that the former approach
is appropriate. The RIS proceeds on that basis.
Whether or not to subject fibre-ready infrastructure (option 2) to an
access regime is another question. As passive carrier infrastructure is
already subject to access arrangements and access arrangements are
necessary to derive maximum benefit from such facilities, it is assumed an
access regime will be in place.
Another question arises about whether FTTP or fibre-ready infrastructure
should be provided by a designated provider - for example NBN Co, as some
have suggested - or by multiple providers in an open market, as now. The
discussion in this RIS assumes an open market for supply and no special
designation of any particular provider. That is, it does not rule out a
role for NBN Co, but it allows others to install this infrastructure if
they provide required technical and service outcomes.
The fourth question is: who is to pay for meeting the requirements of this
policy? The recovery of costs is largely seen as a commercial matter for
stakeholders and the RIS proceeds on this basis. A range of cost recovery
or sharing scenarios exists, or could exist into the future with the
widespread deployment of FTTP. Under the current arrangements for the
deployment of FTTP, developers bear much of the initial cost.
Finally, a blanket or targeted approach can be taken. The RIS assumes a
targeted approach will be taken as it allows more responsive, tailored and
phased solutions to be delivered.
4. Impact analysis
Criteria against which each option is to be assessed
This impact analysis assesses the three options against these criteria:
. their effectiveness in achieving the Government's objectives
. the relative costs of requiring FTTP or fibre-ready infrastructure now
compared with the cost of acting later; and
. the impact of stakeholders, the most prominent being:
o consumers in new developments, including households, businesses,
schools and other users in metropolitan and regional areas;
o developers and builders, including State and Territory land
development agencies[10];
o NBN Co, since any development that does not have FTTP installed at
greenfield may need to be serviced by NBN Co at a later date;
o the telecommunications industry generally, including Telstra, other
carriers who install FTTP, and wholesale and retail service
providers;
o suppliers of network equipment, including cabling and electronics;
o State and Territory and local governments; and
o the Commonwealth, in terms of achieving it policy objective within
the constraints identified.
Insofar as this Regulation Impact Statement is concerned with the impact of
these options on Telstra, it does so in relation to Telstra in its current
form. The implications for Telstra may be different if Telstra's form
changes as a result of, for example, commercial agreement or passage of the
Telecommunications Legislation Amendment (Competition and Consumer
Safeguards) Bill 2009.
Assessment against the criteria
Criterion 1: Effectiveness in meeting the Government's objectives
Access to superfast broadband
As noted above, there is expected to be significant economic value in
ensuring people get access to superfast broadband from the day they move
into a new property, rather than waiting for the NBN rollout.
There are clear benefits to the direct user of superfast broadband
services, but there are also network benefits; that is, the benefit to
others from that purchaser being available on the network. These network
benefits will be greater to the extent that more users have access to
superfast broadband services and are able to make greater use of user-to-
user services that depend upon such functionality (e.g. high definition
video conferencing). A specific example of a particular network benefit is
the value for businesses of being readily accessible in new developments,
especially those some distance from commercial centres, via superfast
broadband. The use of broadband for advertising and receiving orders is
increasing rapidly, and superfast broadband increases the level of user
interaction and the sophistication of transactions possible. Consistent
with the Government's decision to roll-out the NBN more generally, these
network benefits are expected to be significant.
The social value of early access to superfast broadband may be greater to
the extent that people in new estates may otherwise be more physically
and/or socially isolated. For example, the ability of superfast broadband
to support high-definition video-calling and videoconferencing can help
maintain family relationships both by supporting contact with family
members and allowing users to work from home.
FTTP may have a range of implications for social housing and affordable
housing developments. The short term impact would depend on the extent to
which fibre or fibre-ready infrastructure was required in such
developments. However, many features of broadband, including easier and
faster communications, greater access to information and to business and
government services, and assistance with patient self-management of chronic
illness, may be of particular benefit to those living in social and
affordable housing developments. It is often the case that the ability of
those on low incomes to access these services directly is limited by the
lack, or cost, of transport. This being the case, residents of affordable
housing and social housing developments may gain the greatest benefit from
access to broadband.
To the extent that users in new residential or business developments in
regional areas may be relatively disadvantaged in terms of access to
facilities, services or markets, the amenity of access to superfast
broadband could be greater for them.
There is also a benefit in that provision of FTTP at the development and
building stages is likely to result in more functional and aesthetically
pleasing arrangements, than retrofitting. For example, the housing of
electronics can be better integrated into the design of the premises. This
is not readily quantifiable.
As Option 1 provides little certainty as to whether it will expedite the
delivery of FTTP in new developments, it rates poorly in relation to it
likely effectiveness. Option 2 also does not ensure immediate access to
FTTP in new developments, however it paves the way for simpler installation
at a later date, making it more likely in the future. Option 3 best
achieves the objective of having fibre installed because it directly
requires it.
Competition effects
The provision of FTTP in new developments is also expected to have a
positive effect on competition in the supply of telecommunications
infrastructure and services. Because of its incumbency and role as the
universal service provider, Telstra is generally called upon to install
copper infrastructure. By contrast, as noted above, it faces competition in
the supply of FTTP infrastructure. Once installed FTTP can support multiple
providers of different services at the retail level. A number of competing
FTTP providers are also strong proponents of providing open access on their
networks. (That said, networks are otherwise subject to access regulation
under Part XIC of the Trade Practices Act 1974.)
As the largest provider of copper-based infrastructure to individual
premises, all options to move to FTTP will impact on this aspect of
Telstra's business. However, Telstra is already well established in the
FTTP market and is in a strong position to compete in the provision of
fibre. Telstra has generally welcomed the Government's fibre in greenfields
policy.
The installation of fibre-ready infrastructure with appropriate
specifications and access arrangements should also facilitate competition
in the supply of fibre-based services in that it will be difficult for any
owner of such passive infrastructure to take unfair advantage of their
control of such bottleneck facilities.
Again, as Option 1 provides little certainty as to whether it will expedite
the delivery of FTTP or fibre-ready infrastructure in new developments, it
rates poorly in relation to its benefits for competition. Option 2 does not
deliver the full competition benefits of a FTTP platform, but it improves
opportunities for FTTP providers and paves the way for a full FTTP outcome.
Option 3 best achieves the competition benefits of fibre installed because
it directly requires it.
Environmental benefits
FTTP will deliver environmental benefits. There are several pathways to
this outcome. First, fibre networks can be more energy efficient to operate
than other forms of broadband. As a high-bandwidth technology, superfast
broadband can also save on travel and therefore greenhouse emissions by way
of teleworking, high-definition videoconferencing and online shopping[11].
(This benefit may be even higher for regional developments.) There may be a
higher uptake of technologies such as smart metering if FTTP is available
immediately when new premises are being established. The environmental
benefits will be greatest the larger the number of premises that have fibre
installed and the sooner that happens.
There may also be environmental benefits from better integrating FTTP into
the overall design of new developments. For example, the installation of
FTTP in new large developments can have positive environment impacts in
terms of commuting patterns and transport needs.
The installation of fibre-ready infrastructure can also have environmental
benefits. For example, the existence of such infrastructure can eliminate
the need for further energy-intensive civil construction (i.e. digging up
and relaying conduit) and reduce other retrofitting costs, such as hauling
new fibres.
Again, as Option 1 provides little certainty as to whether it will expedite
the delivery of FTTP or fibre-ready infrastructure in new developments, it
rates poorly in relation to its benefits for the environment. Option 2 does
not deliver the full environmental benefits of a FTTP platform, but does
provide some environmental benefits. Option 3 rates best in this area as it
expedites the delivery of FTTP and its environmental benefits.
Practicality, timeliness and risk
Important considerations for the Commonwealth are the practicality,
timeliness and risk of the three options. The Commonwealth needs options
that can be implemented in practice on a reasonable timeframe and with
acceptable risk.
Option 1 is a practical implementation option in that particular actions
will rest with stakeholders and they can take account of commercial and
other considerations in making decisions and choose the timeframe that best
suits them. For these reasons the risks to external stakeholder should be
low. Given the growing interest in superfast broadband, there will be
increasing pressure on developers to provide FTTP in their developments;
however, the time frame over which this will extend is uncertain.
Conversely, the option may be seen as impractical for the Commonwealth
because it provides no certainty as to the achievement of objectives or the
timeframe for doing so. As such it involves considerable risk for the
Commonwealth.
Option 2 is a practical implementation option in that the utility of fibre-
ready infrastructure is well understood and accepted, it is increasingly
being installed, it involves little extra cost (see below), it involves
little extra risk for external stakeholders and it paves the way for the
later installation of FTTP. Requiring the installation of fibre-ready
infrastructure would lock in what is a growing practice. It could be
quickly implemented and would be of enduring benefit. For the Commonwealth
it would not immediately deliver its ultimate objective of having FTTP, but
would help achieve it over time.
Implementation of Option 3 would be more demanding for external
stakeholders. It would require changes in business practices on the part of
most players and increased costs. Suppliers would need to increase their
capacity to meet stronger demand. Given these factors, the approach does
involve some risks for both external stakeholders and the Commonwealth.
This may mean a targeted and phased implementation, using Options 2 and 3,
would be best, although this could extend the timeframe over which FTTP was
actually installed. Unlike Options 1 and 2, however, Option 3 provides for
the actual provision of FTTP in the short term.
Criterion 2: Savings from avoiding later retrofitting with fibre
This section discusses the relative costs and savings of the three options.
As noted above, a key consideration in assessing the options is the extent
to which options would provide for saving by avoiding or reducing future
retrofitting costs.
The discussion of costs and savings uses the key parameters set out on
pages 3-4 above (i.e. number of premises and cost per premises).
None of the costings include backhaul which is required for all options
with negligible differences in cost.
It should be noted that these costs are calculations of the maximum
possible costs. They are indicative only. Actual expenditure will depend on
the precise implementation settings adopted and the exact number of
premises serviced by a particular service solution. That is, actual costs
will depend on the extent to which fibre and/or fibre-ready requirements
are targeted at new developments.
The cost of Option 1 would depend on how external stakeholders chose to
react to market pressures on them to install FTTP as opposed to other fixed
telecommunications solutions. Option 2 would prescribe a more fixed
migration path, with fibre-ready infrastructure paving the way for FTTP.
Option 3 would see a direct move to FTTP.
Conventional[12] passive infrastructure and FTTP retrofitting
To the extent that stakeholders continued to install copper solutions to
all relevant premises using conventional passive infrastructure (under
Option 1), the cost would largely remain the same as now in the short term.
The estimated cost of a copper solution is around $1,000 per lot, around
$800 of which is attributable to passive infrastructure, including
trenching. If it is assumed that 90 per cent of the 210,000 premises
constructed per annum are connected with copper, the estimated cost would
be $189 million per annum.[13] This cost would initially be met by Telstra,
and passed through to developers and customers.
When it comes time to retrofit these premises that have conventional
passive infrastructure with FTTP, the estimated additional retrofit cost
would be $3,000 per premises, giving an estimated total additional retrofit
cost of $567 million per annum[14]. This high cost reflects the additional
FTTP equipment that is required but also the need to undertake new civil
works (trenching, ducting, pits) which is expensive, and to pull through
new fibre cables. All up, the estimated total cost of providing copper then
retrofitting with FTTP, without fibre-ready passive infrastructure, would
be $756 million per annum.[15]
Fibre-ready infrastructure and FTTP retrofitting
To the extent that stakeholders continue to install copper solutions to all
relevant premises but use fibre-ready passive infrastructure (under either
Option 1 or 2), the cost would largely remain the same in the short term.
(While long term benefits of fibre-ready passive infrastructure are
considerable, the additional cost of providing it over and above
conventional infrastructure of this kind is considered marginal.)
If it is assumed that 90 per cent of the 210,000 premises constructed per
annum are connected with copper and fibre-ready infrastructure, the
estimated cost would be around $189 million. This cost would generally be
met by Telstra with some contributions from developers and customers.
However, when it comes time to retrofit these premises that have fibre-
ready infrastructure with FTTP, the estimated additional retrofit cost
would be $2,000 per premises, giving an estimated total additional retrofit
cost of $378 million per annum [16]. All up, the estimated total cost per
annum of providing copper and fibre-ready passive infrastructure and then
retrofitting with FTTP would be $567 million per annum.[17] This would
represent a saving of $189 million per annum over simply retrofitting
copper and conventional passive infrastructure.
Immediate installation of fibre-ready infrastructure and fibre
To the extent that stakeholders moved directly to the installation of fibre-
ready passive infrastructure and FTTP (under either Option 1 or 3), the
cost would increase in the short term but provide savings in the long term.
If it is assumed that 90 per cent of the 210,000 premises constructed per
annum were connected with FTTP, the estimated cost would be around $472.5
million[18]. While there are a range of cost-recovery models that may
emerge with the widespread deployment of FTTP, under the current
arrangements this cost is likely to be met by developers, but it would
depend on the cost recovery arrangements put in pace by providers. For
example, cost sharing arrangements are often offered to win business.
Cost comparisons
Installing FTTP up front would involve an additional cost over installing
copper of around $283.5 million per annum.[19] However, as FTTP will have
been installed from the outset, consistent with published specifications,
no further retrofitting will be required. Compared with the total cost of
retrofitting FTTP when there is conventional non-fibre-ready infrastructure
($756m), installing FTTP up front ($472.5m) saves $283.5m. Compared with
the total cost of retrofitting FTTP when there is fibre-ready
infrastructure ($567m), installing FTTP up front saves $94.5m.
Criterion 3: Stakeholder impact
This section looks at the likely impact of the three options on key
stakeholder groups identified above.
Consumers
No intervention: Consumers in new developments who do not have FTTP
installed will pay the lower cost of connection to a copper or wireless
network, possibly, as now, recovered over some years through connection and
rental payments. At some later time, however, they may have to also pay for
a fibre connection-depending on the commercial and operational arrangements
which are in place-and put up with the inconvenience of a retrofit. In the
interim, they will have to rely on slower speed networks which are not
capable of delivering the same level of service or they may choose to pay
separately for cable, wireless or satellite connection. If their properties
are not connected with fibre but fibre is increasingly the norm, this may
reduce the long term value of their properties.
Businesses whose customers do not have the fast broadband access that fibre
provides may have their effective markets reduced. Equally, businesses
without access to fast broadband themselves will be disadvantaged.
Fibre-ready: Consumers in developments which have fibre-ready
infrastructure installed will face retrofitting costs and delays in their
access to superfast broadband. However, the costs, and perhaps more
importantly the disruption, of the retrofitting will be very much reduced.
It is possible that fibre-ready estates will be more attractive to
providers in the future, so that they will be fibred sooner than comparable
estates without fibre-ready passive infrastructure.
FTTP: Consumers (including householders and businesses) in new developments
who have FTTP will enjoy the benefits of superfast broadband from the day
they move into a new development. Consumers would be saved the cost of
installing copper infrastructure. The costs associated with retrofitting
these estates with FTTP at a later date would be avoided.
Consumers in new developments in which FTTP was installed would pay for
their broadband connection, probably up front in the total cost of their
house and land package. As indicated above, this would involve a cost of
approximately $2,500 to the cost of a property, assuming that all costs are
recovered up front by the infrastructure provider and passed on by the
developer[20]. This represents an additional cost of 0.7 per cent of the
total cost of a $350,000 house and land package. Compared to the cost of a
copper connection, this involves an additional cost of $1,500.
However, while the cost of a house and land package may increase by this
relatively small amount, research shows that the value of homes equipped
with FTTH is materially greater than the cost. On the basis of US data, for
instance, the US FTTH Council has estimated that having fibre connected
adds $5,000 to the value of a home[21].
Developers and builders
No intervention: Even without Government action, developers and builders
could come under increasing pressure to install FTTP or fibre-ready
infrastructure but how they responded to such pressure would largely be a
matter for them. From consultations, this is understood to be their general
preference. To the extent that ad hoc planning arrangements and technical
specifications emerge, this could add to compliance costs for these
stakeholders. These costs may be higher for smaller developers, and for
those in regional areas - larger developers often have specialists who are
aware of the issues involved in installing fibre, and have employees or
regular contractors whose skills they know.
There may be less pressure on developers in low-growth regional areas to
install fibre, because the scale of development is less, there are fewer
local examples and possibly fewer competitors to make it the norm. As noted
above, because developers are unlikely to face future retrofit costs, they
may have little incentive to consider these costs.
Fibre-ready: Fibre-ready infrastructure is increasingly being installed in
new developments as awareness of its advantages increases. In
consultations, many developers and builders expressed support for the
installation of fibre-ready infrastructure. It would help future proof
their developments and reduce future retrofitting costs. Developers will
also need to decide what type of interim telecommunications solution they
will acquire for their estates, noting it will soon be superseded by FTTP.
FTTP: If fibre were required, developers would have to market their product
at a higher price, but the difference is likely to be modest, particularly
when balanced against the fact that the value -and attractiveness -of their
development would be increased. The proposed approach would build on
existing industry trends. Developers would need to arrange the installation
of FTTP. However, they already organise the provision of copper-based
services and increasingly FTTP. Generally they contract a carrier who takes
on the responsibility for installing such infrastructure. The process would
be made easier through the development of standards and guidelines and
administrative mechanisms to apply them such as the accreditation of FTTP
providers and the certification of networks. These processes are likely to
be of greater benefit to small developers than to the larger companies, who
often have skilled specialists in fibre installation on their staff or
available as contractors.
Telstra and other providers
No intervention: In the absence of Government intervention, Telstra would,
under the current legislative framework, continue to have flexibility to
offer copper, wireless or fibre solutions. Its status as the universal
service provider could advantage it in servicing new developments. It may,
however, consider the roll-out of copper is wasteful if it is to be soon
rendered obsolete by FTTP and look at other options such as the use of
wireless or FTTP.
Other carriers and service providers would have opportunities to service
new developments but market opportunities would be uncertain. The
competitive market in installation might grow relatively slowly, and
Telstra would retain some of the dominance that it holds by reason of its
copper network.
Fibre-ready: Many of these stakeholders already install fibre-ready
infrastructure so such a requirement should have little impact on their
current operations. To the extent fibre-ready infrastructure requires
slightly more planning or materials, there may be slightly more costs.
These would typically be recovered from customers. There may also be
slightly more business opportunities. Fibre-ready infrastructure will
reduce opportunities to use passive infrastructure to constrain market
entry (e.g. by making ducts too narrow for competitors). Conversely, it
will facilitate the later roll-out of fibre by other industry participants.
If Telstra is requested to service a development as the universal service
provider, it will need to decide whether it will use copper, wireless or
FTTP, noting that non-fibre technologies will soon be superseded by fibre.
FTTP: If there was a requirement for FTTP, Telstra would be forced to move
away from its traditional reliance on copper infrastructure. This said,
Telstra has generally been supportive of the move towards FTTP. Telstra,
other carriers and wholesale and retail service providers would be expected
to benefit from greater market certainty and an expanded competitive
market. By promoting the roll-out of FTTP, the approach would be expected
to have the positive impacts on competition noted in 'Expected economic,
social and environmental impacts generally' above.
By limiting the installation and subsequent replacement of copper
infrastructure, these measures may reduce the demand for copper-based
equipment, including cabling and increase the demand for fibre based
equipment. The degree to which this happens depends on the effectiveness of
the measure. Vendors of network equipment often supply both copper and
fibre products.
NBN Co.
Whatever arrangements are put in place by the Commonwealth, it would be
open to NBN Co to install fibre in new estates as part of its roll-out
plan. To the extent developments are not supplied with FTTP, it is
envisaged NBN Co would eventually connect them as part of its national
rollout. As noted above, the cost of retrofitting these developments is
estimated at up to $3,000 per lot where there is no fibre-ready
infrastructure. If the property is made fibre-ready, this could be reduced
to $2,000 per lot. It would be up to NBN Co how it recovered these
retrofitting costs. There is also a risk that the developments NBN Co would
have to service would be those which are the less commercially attractive
(on the basis the most commercially attractive would readily attract
carriers). Clearly, if the Commonwealth establishes a requirement for FTTP,
NBN Co's retrofitting task will be smaller.
State, Territory and local governments
No intervention: In the absence of Commonwealth action, as the entities
primarily responsible for planning, State, Territory and local governments
are likely to come under increasing pressure to require the installation of
fibre-ready and FTTP infrastructure. There would be a risk that they would
respond to this in an ad hoc manner which could increase costs for them and
lead to inefficiencies in terms of the actual roll-out of FTTP. This has
been a concern expressed by a range of stakeholders in consultations.
Development without FTTP could have flow-on effects to wider planning
issues, for example, the need for transport and other community facilities.
Implementation of a Commonwealth requirement to install fibre-ready and/or
FTTP could provide a focal point for the development of complementary
planning measures of State, Territory and local governments, thus reducing
costs and confusion and increasing consistency. Conversely, complementary
State and Territory planning could help reinforce Commonwealth fibre-ready
and FTTP requirements. This would involve some upfront and ongoing costs.
In consultations State, Territory and local governments have expressed
concerns about being burdened by additional costs. These costs could be
mitigated by leveraging off the proposed Commonwealth legislation and/or
the adoption of model laws that might be developed with the assistance of
the Commonwealth. Costs could be further mitigated by the development and
adoption of standards and guidelines and mechanisms to apply them such as
the accreditation of FTTP providers and the certification of networks.
5. Consultation
There has been an extensive consultation process in relation to the
implementation of the Government's fibre in greenfields policy. As it is
the stated policy goal to maximise the installation of FTTP in new
developments, this consultation has focussed on the most appropriate
mechanism to make this happen, balancing all of the relevant
considerations.
A detailed consultation paper was released on 29 May 2009 for public
comment. This was followed up by face-to-face presentations to, and
meetings with, stakeholders in all mainland States. Stakeholders elsewhere
were contacted by phone. Over 80 submissions were received in response to
the consultation paper[22].
In light of these consultations, a Fibre in Greenfields Stakeholder
Reference Group, comprised of representatives of the affected groups, was
established to provide views on implementation issues and to help
disseminate information. The membership of the Group is given at Attachment
A.
An exposure draft of the Fibre Deployment Bill was sent to the Stakeholder
Reference Group, State and Territory Planning Ministers and members of the
Online and Communications Council in November 2009. The exposure draft of
the Bill and its Explanatory Memorandum was released to the public on 23
December 2009. Written comments were provided by 17 stakeholders, including
nine members of the Stakeholder Reference Group.
In the submission process and subsequent consultations, stakeholders have
expressed strong support for the policy objective that FTTP should be
installed in new developments to the greatest extent practicable and, where
this is not practicable in the short term, that fibre-ready infrastructure
should be installed. Some stakeholders have objected to the mandating of
FTTP in new developments under law.
Most comments, however, have focussed on implementation issues.
Many stakeholders have asked that the Commonwealth more clearly articulate
its overall framework for the provision of FTTP in new developments. The
Commonwealth considers that it has done this to the greatest extent
possible at this time, noting that the final framework is dependent on the
outcome of a range of concurrent processes and ongoing discussions with
stakeholders. In this context, the Commonwealth considers it is reasonable
to move forward with a legislative framework that provides a head of power
for more detailed requirements. It notes, however, that these more detailed
arrangements are already being developed in consultation with stakeholders.
Key issues for many stakeholders, particularly from the construction
industry, have been the cost of FTTP, the potential additional cost of
backhaul, the potential impact on housing affordability and equity vis a
vis the provision of fibre infrastructure in brownfields by NBN Co. In
this context these stakeholders have, as noted, suggested that new
developments should be serviced by NBN Co or subsidy programs should be
established. As noted above, these are approaches outside the current
parameters set for this policy and additional to the establishment of a
legislative head of power. The goal of having FTTP installed to the
greatest extent possible in new developments and establishing a framework
to require it is one thing. Who then provides services within that
framework and whether they receive assistance is considered to be a
separate issue.
As discussed above the fibre in greenfields policy is premised on the
incremental costs of installing FTTP compared to copper being reasonable
and outweighed by the immediate and long benefits to consumers in these
estates. The Government also considers that the cost of providing FTTP will
be reflected in the value of properties, and properties without the
technology will be at a disadvantage. Moreover, it may be that adoption of
a targeted implementation approach, which takes into account any additional
costs of servicing high cost areas, will reduce concerns in this area. What
role NBN Co may play in new developments is, at this time, a matter for the
company, particularly noting it is only in its start-up phase.
A further concern arising from the consultation process has been the
desirability of achieving, as far as possible, consistent outcomes
nationally, in terms of network design and performance, compatibility with
the NBN and service outcomes for consumers. This is seen as beneficial in
terms of network operation, administration and consumer equity. There are
some challenges in achieving these goals under a competitive market model.
To a large extent that competitive model should deliver a high level of
service in its own right. Beyond that, it is envisaged that guidelines,
codes and standards will be used to provide a high degree of consistency.
In this regard NBN Co is developing specifications that can be drawn upon.
The Communications Alliance is also doing work in this area. As is now the
case, regulation may be required to ensure other important consumer
outcomes are delivered.
In terms of the form a legislative approach should take, there has also
been a range of views. There has been a general consensus that a nationally
consistent approach is preferable. There has been a general preference for
Commonwealth legislation, reinforced by industry-developed guidelines or
standards, over State, Territory and local government approaches.
6. Conclusion and recommended option
It is not known how many developments would install FTTP or fibre-ready
infrastructure in the absence of Government intervention, so it is
difficult to judge the effectiveness of Option 1, allowing the market to
determine the installation of FTTP, in delivering the key objective of
having such infrastructure provided. Given competing interests, the risk of
property buyers not looking far enough ahead to make a considered judgement
and their lack of experience in dealing with FTTP providers its
effectiveness would be uncertain and possibly low. Lower levels of
connection and the need for more retrofitting would lead to higher costs in
the future and reduce the benefits associated with consumers in these
estates having superfast broadband during the interim period. Option 1
involves a high risk of not delivering the required policy outcome.
Option 2, requiring fibre-ready infrastructure, would not immediately
deliver the benefits of FTTP, but it would pave the way for FTTP and
significantly reduce future retrofitting costs where FTTP is not
immediately practicable. Requiring fibre-ready infrastructure would also be
able to take account of possible short term constraints in the supply of
FTTP, particularly while NBN Co is in its start-up phase. It could also
take account of circumstances where stakeholders need more time to adjust
to the transition to FTTP.
Option 3, requiring FTTP in all new premises, would maximise access to
FTTP as soon as possible and result in the least retrofitting costs and
therefore the greatest savings. However, there may be practical
impediments to the immediate installation of FTTP in all new
developments in the short term. For example, there is a need to ensure
stakeholders are prepared, providers have the capacity to provide fibre
in all new developments, backhaul capacity is readily available at
affordable prices and new developments receive quality outcomes
consistent with those to be delivered over the NBN.
In this context, a targeted and phased implementation of the policy may be
required. Consultations with stakeholders indicate this may be the case. In
this context, Option 2, the installation of fibre-ready infrastructure,
could help reduce long term costs. It would ensure that any costs incurred
in retrofitting FTTP in these estates are minimised to the greatest extent
possible.
The recommended option is therefore a mix of Options 2 and 3. FTTP should
be required where it is practicable and cost-effective to do, but where
this is not immediately the case, fibre-ready infrastructure should be
required so FTTP can be installed later at lower cost.
This mix could be achieved by targeting of the requirement for FTTP, so it
applies only to specified classes of developments that have appropriate
characteristics. Requirements could also be introduced on a phased basis,
for example, to take account of transitional factors. The targeting and
phasing of implementation could impact on the number of premises affected
by the process and thus overall costs.
As discussed above, if FTTP was deployed to 189,000 premises per annum, the
estimated cost would be $472.5 million per annum. If fibre-ready
infrastructure was deployed to these premises and was latter retrofitted,
the estimated cost would be $567 million per annum. If a mixed approach is
adopted in which, say, 50 per cent of premises are provided with fibre-
ready infrastructure and 50 per cent with FTTP the total cost per annum,
would be $519.75 million. While clearly a higher cost than that of a full
FTTP solution, it still represents a saving of $42.75 million. The final
ratio of costs and savings will depend on the final mix adopted. In all
instances, however, the highest estimated anticipated costs under a
scenario are those identified here.
A mixed approach using Options 2 and 3 would enable the benefits of FTTP to
be captured where practicable, pave the way for FTTP where this was not the
case and result in savings by reducing the need for retrofitting, or cost
of retrofitting. Ensuring that developments are fibre-ready will save a
large part of potential retrofitting costs. The maximum saving if all
developments were fitted with FTTP rather than just made fibre-ready using
the parameters outlined above would be $94.5 million.
The actual balance of FTTP and fibre-ready infrastructure and their costs
and savings will depend on where thresholds for applying the measure to new
developments are set. These would be contained in subordinate legislation.
Similarly, when new developments are subjected, in a practical sense, to
FTTP requirements will be influenced by the definition of 'planning
approval' adopted in subordinate legislation. The earlier in the planning
pipeline the 'planning approval' definition comes, the later the
requirements will take practical effect, noting the time lag in new
developments coming on stream. Consequently any new costs would lag
accordingly.
The precise composition of a mixed approach involving Options 2 and 3 will
be subject to further detailed consultation with stakeholders and the
public on the content of the subordinate legislation needed to give
practical effect to the proposed requirements. This subordinate legislation
would also be subject to Parliamentary scrutiny.
The level of the saving also depends on the costs of installing fibre and
fibre-ready infrastructure in new developments. These are expected to fall
steadily in coming years as economies of scale are realised.
7. Implementation
On the basis that a mixed approach of requiring fibre-ready and FTTP is the
best course of action and this cannot be assured in the absence of
intervention, the Commonwealth has decided to introduce legislation to
achieve these objectives.
Two main legislative options have been identified and considered:
. using the Commonwealth's power under the Constitution to regulate
corporations to directly require developers to have fibre-ready
infrastructure and FTTP installed in new developments; and
. using the Commonwealth's power under the Constitution to regulate
communications to require relevant facilities that are to be installed
to be fibre or fibre-ready.
For the first approach to be effective, it would require the Commonwealth
to prohibit the trading in land by developers unless the relevant fibre
requirements were met. This was seen as highly intrusive and might cause
considerable uncertainty in the sector. As such it was not considered to be
a viable option and the second option is being pursued.
The Commonwealth's proposed legislation, the Telecommunications Legislation
Amendment (Fibre Deployment) Bill 2010, will amend the Telecommunications
Act 1997 to create a head of power for the Minister to designate classes of
developments in which:
. passive infrastructure that is to be installed will need to be fibre-
ready; and/or
. fixed lines that are to be installed will need to be optical fibre; and
. the infrastructure will need to meet conditions (if any) specified by
the Minister.
Enabling the Minister to specify these matters in subordinate legislation
will provide flexibility to mix-and match and target the requirements
according to market circumstances. Factors that could be taken into account
include the size and location of developments, the costs of providing fibre
solutions in developments, the capacity of suppliers and other
stakeholders, and the proximity and cost of backhaul capacity.
It is envisaged that classes of development will be determined by reference
to thresholds that may relate matters such as the size of developments
and/or costs of providing FTTP and/or cost of backhaul.
While the flexibility afforded the Minister in determining whether fibre or
fibre-ready facilities are to be required in developments has the potential
to create some uncertainty for stakeholders in the short term, this will be
addressed by detailed subordinate legislation, which is currently being
developed in consultation with stakeholders. The Government's intention is
to release this subordinate legislation for comment in parallel in advance
of debate on the Bill.
Consistent with its stated policy, the Government's objective is to have
this legislative framework in place by 1 July 2010. However, when
requirements under the framework take practical effect will depend on
the details set out in the subordinate legislation, including any
definitions of planning approval used to trigger requirements.
The proposed legislation will also amend the Telecommunications Act to
simplify the making of codes and standards for FTTP and fibre-ready
facilities in new developments. These can be used to promote consistent
design and performance outcomes.
The proposed legislation also provides for a regime for accessing fibre-
ready facilities to be set out in regulations. This will enable FTTP
providers to secure ready access to these facilities so that they can
provide FTTP at a reasonable cost.
The use of subordinate legislation and guidelines, codes and standards
provides both flexibility in the implementation of the policy and the
ability to provide necessary technical specificity.
As the proposed legislation will amend the Telecommunications Act, it will
be part of, and consistent with, existing regulation of the sector.
As discussed above, there will be some administrative compliance costs but
these are not expected to be burdensome. Developers, builders, carriers and
other stakeholders must already deal with arrangements relating to the
installation of copper-based telecommunications infrastructure in new
estates. Increasingly they are dealing with arrangements relating to FTTP.
It is envisaged that clear guidelines and standards for FTTP, together with
accreditation and certification processes for infrastructure, will help
contain costs.
This may be further reinforced by complementary State, Territory and local
government planning arrangements.
8. Monitoring and review
The NBN is a major Commonwealth initiative to future-proof Australia's
communications infrastructure. The fibre in greenfields policy is an
important adjunct to the NBN. The fibre in greenfields policy will involve
significant infrastructure investment in its own right. In this context,
the effective implementation of the policy to have FTTP or fibre-ready
infrastructure installed in new developments will be closely monitored on
an ongoing basis. Should monitoring identify that the policy objective is
not being met or the approach is having unforeseen consequences, remedial
action would be taken promptly. Any regulatory fine-tuning would be
facilitated by the ability to make subordinate legislation under the
proposed legislation.
Given the nature of the proposed arrangements in ensuring that appropriate
forward-looking telecommunications infrastructure is installed in new
developments, it is likely that the proposed arrangements will become part
of the package of regulation for the provision of utilities such as water,
power and sewerage to new developments.
That said, it is normal practice to review legislation and any subordinate
legislation within 5 years of its enactment. Moreover, the proposed
framework will, as noted, be subject to ongoing monitoring and will be
reviewed as required. This has been the Government's experience in relation
to telecommunications legislation generally.
Attachment A
Fibre in Greenfields Stakeholder Reference Group
|Department of Broadband, Communications, the Digital Economy (DBCDE)|
|(chair) |
|Australian Local Government Association (ALGA) |
|Urban Development Institute of Australia (UDIA) |
|Property Council of Australia (PCA) |
|Housing Industry Association (HIA) |
|Communications Alliance |
|Telstra |
|Opticomm |
|FTTH Council Asia-Pacific |
|TransACT |
|Australian Telecommunications Users Group (ATUG) |
|Australian Communications Consumer Action Network (ACCAN) |
|Energy Networks Association (ENA) |
|National Electrical & Communications Association of Aust (NECA) |
|NBN Co |
|Planning Institute of Australia (PIA) |
|Urban Taskforce Australia (UTA) |
|Standards Australia |
|Engineers Australia |
|iiNet |
|Master Builders Association (MBA) |
|Dept Innovation, Industry & Regional Development (Vic) |
|Department of Public Works and Department of Infrastructure and |
|Planning (Qld) |
|Department of Planning and Infrastructure (NSW) |
|Department of Planning and Infrastructure (WA) |
|Dept Further Education, Employment, Science and Technology (SA) |
|Department of Premier and Cabinet (Tas) |
|ACT Chief Minister's Department (ACT) |
|Department of Business and Employment (NT) |
| |
|Dept Families, Housing, Community Services and Indigenous Affairs |
|(observer) |
|Australian Competition and Consumer Commission (ACCC) (observer) |
|Australian Communications and Media Authority (ACMA) (observer) |
ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum:
ACCC: Australian Competition and Consumer Commission
ACMA: Australian Communications and Media Authority
Act: Telecommunications Act 1997
AIA: Acts Interpretation Act 1901
Bill: Telecommunications Legislation Amendment (Fibre Deployment) Bill 2010
LIA: Legislative Instruments Act 2003
Minister: Minister for Broadband, Communications and the Digital Economy
TPA: Trade Practices Act 1974
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill, when enacted, may be cited as the
Telecommunications Legislation Amendment (Fibre Deployment) Act 2010.
Clause 2 - Commencement
Clause 2 of the Bill provides for the commencement of the Bill.
Clauses 1-3 of the Bill and any other provisions not covered in the table
provided at subclause 2(1), would commence on the day on which the Bill
receives Royal Assent.
Parts 1 and 2 of Schedule 1 of the Bill would commence on 1 July 2010.
Under section 4 of the AIA, however, legislative instruments can be made in
advance of the commencement date of these provisions of the Bill. Such
legislative instruments will commence on the date that these provisions of
the Bill commence, or a later date as specified in the instruments (see
subsection 4(2A) of the AIA). It is anticipated that legislative
instruments required to give effect to the Bill will be made in advance of
1 July 2010, so that stakeholders are given advance notice of requirements
relevant to them before that date.
If Part 8 of Schedule 1 to the Telecommunications Legislation Amendment
(Competition and Consumer Safeguards) Bill 2009 commences on or before
1 July 2010, the provisions in Part 2 of Schedule 1 of the Bill
would not commence at all. This is because the commencement of Part 2 of
Schedule 1 of the Bill would result in an amendment to the definition of
'civil penalty provision' in section 7 of the Act. This amendment would
not be necessary if Part 8 of Schedule 1 of the Telecommunications
Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 had
already commenced, given that the commencement of that Part would result in
an all-encompassing change to the definition of 'civil penalty provision'.
Clause 3 - Schedule(s)
Clause 3 provides that each Act that is specified in a Schedule to the Bill
is amended or repealed as set out in that Schedule and any other item in a
Schedule has effect according to its terms. The Bill has one Schedule
which amends the Act.
Schedule 1-Amendments
Part 1-General amendments
Part 1 of Schedule 1 of the Bill makes a number of amendments to the Act to
advance the deployment of optical fibre based and optical fibre-ready
telecommunications infrastructure in specified real estate development
projects, and also makes a necessary change to the TPA as a result of the
amendments made to the Act.
Telecommunications Act 1997
Item 1 - Section 7
Item 1 would insert a definition of 'building lot' in section 7 by
reference to the meaning given by proposed section 372D. The definition of
'building lot' is discussed in the explanatory note for proposed section
372D.
Item 2 - Section 7
Item 2 would insert a definition of 'building unit' in section 7 by
reference to the meaning given by proposed section 372F. The definition of
'building unit' is discussed in the explanatory note for proposed section
372F.
Item 2A - Section 7
Item 2A would insert a definition of 'fibre-ready facility' in section 7 by
reference to the meaning given by proposed section 372HB. The definition
of 'fibre-ready facility' is discussed in the explanatory note for proposed
section 372HB.
Item 2B - Section 7
Item 2B would insert a definition of 'fixed-line facility' in section 7 by
reference to the meaning given by proposed section 372HA. The definition
of 'fixed-line facility' is discussed in the explanatory note for proposed
section 372HA.
Item 3 - Section 7
Item 3 would insert a definition of 'optical fibre line' in section 7. An
'optical fibre line' is defined as a line that consists of optical fibre,
or encloses optical fibre. The reference to 'encloses optical fibre'
refers to the immediate casing surrounding the fibre, not clearly separate
facilities like ducting. The definition recognises that fibres are
generally sheathed in plastic tubes which in turn are bundled together and
further sheathed to form a cable. The definition includes such a cable,
but not the duct in which such a cable may be laid.
Item 4 - Section 7
Item 4 would insert a definition of 'project area' in section 7 by
reference to the meaning given by proposed section 372D. The definition of
'project area' is discussed in the explanatory note for proposed section
372D.
Item 5 - Section 7
Item 5 would insert a definition of 'real estate development project' in
section 7 by reference to the meaning given by proposed section 372D. The
definition of 'real estate development project' is discussed in the
explanatory note for proposed section 372D.
Item 6 - Section 7
Item 6 would insert a definition of 'sell' in section 7, when used in
relation to a building lot or a building unit, by reference to the meaning
given to that term by proposed sections 372G and 372H. The definition of
'sell' is discussed in the explanatory notes for proposed sections 372G and
372H.
Item 7 - Section 7
Item 7 would insert a definition of 'subdivision' in section 7 by reference
to proposed section 372E. The definition of 'subdivision' is discussed in
the explanatory note for proposed section 372E.
Item 8 - At the end of subsection 110(2)
Item 8, along with Items 8A, 9 and 9A, is one of a series of amendments to
the industry code and standards processes under Part 6 of the Act to make
it easier for codes and standards to be made about optical fibre
infrastructure and services, if required. By facilitating the development
of codes and standards of this kind, the measure will help provide
necessary guidance on relevant technical matters and help respond to calls
from stakeholders for such guidance to promote nationally consistent
network and service outcomes.
Item 8 would amend subsection 110(2) by adding the group of persons
specified in proposed paragraph 110(2)(j) to the list of groups in
subsection 110(2) that are, for the purposes of Part 6 of the Act, regarded
as 'sections of the telecommunications industry'. Accordingly, 'persons
who install optical fibre lines or facilities used or for use in, or in
connection with, optical fibre lines in the project area, or any of the
project areas, for a real estate development project to which section 372B
or 372C applies' would be a 'section of the telecommunications industry'
for the purposes of Part 6 of the Act.
This would capture persons, who, for example, dig trenches or install pits,
ducts or other conduit. The effect of this proposed amendment is that the
provisions in Part 6 of the Act, which relate to industry codes and
standards, would apply to the persons identified by proposed paragraph
110(2)(j). Specifically, the ACMA could register an industry code prepared
by a body or association representing this section of the
telecommunications industry (subsection 117(1)). The ACMA could also
determine an industry standard if it is satisfied that there is no
representative body or association for this section of the
telecommunications industry (subsection 124(1)).
Item 8A - After paragraph 113(3)(p)
Item 8A would amend subsection 113(3) by adding the examples specified in
proposed paragraphs 113(3)(pa), 113(3)(pb), 113(3)(pc) and 113(3)(pd) to
the list of non-exhaustive examples in subsection 113(3) that are matters
that may be dealt with by industry codes and standards. Accordingly the
following would be examples of matters that could be dealt with by industry
codes and standards for the purposes of section 113:
. the design features of optical fibre lines or facilities used, or for
use, in or in connection with optical fibre lines in the project
area, or any of the project areas, for a real estate development
project to which section 372B or 372C applies (proposed paragraph
113(3)(pa));
. performance requirements to be met by optical fibre lines or
facilities used, or for use, in or in connection with optical fibre
lines in the project area, or any of the project areas, for a real
estate development project to which section 372B or 372C applies
(proposed paragraph 113(3)(pb));
. the characteristics of carriage services supplied using optical fibre
lines (proposed paragraph 113(3)(pc)); and
. performance requirements to be met by carriage services supplied
using optical fibre lines (proposed paragraph 113(3)(pd)).
Item 9 - At the end of section 115
Item 9 would amend section 115 of the Act by adding proposed subsection
115(5). Proposed subsection 115(5) provides a limited exception to the
application of the rule in subsection 115(1).
The rule in subsection 115(1) states that an industry code or standard has
no effect to the extent it requires customer equipment, customer cabling, a
telecommunications network or a facility to have particular design
features, or to meet particular performance requirements; or to the extent
to which it deals with the content of content services. This rule can
already be set aside by regulations (see subparagraphs 115(2)(a)(iii) and
115(2)(b)(iii)). However, item 9 would amend section 115 to provide a
statutory exemption to the rule to expedite the making of any relevant
codes or standards that may be necessary to implement the policy of having
fibre to the premises installed in new developments.
Proposed subsection 115(5) provides that the rule in subsection 115(1) does
not apply to an industry code or an industry standard to the extent (if
any) to which compliance with the code or standard is likely to have the
effect of requiring optical fibre lines or facilities that are used, or
that are for use, in or in connection with optical fibre lines in a project
area for a real estate development project to which proposed sections 372B
or 372C applies, to have particular design features or to meet particular
performance requirements. The terms 'facility' and 'optical fibre line'
are defined in section 7 of the Act.
In effect, the proposed provision facilitates the development of industry
codes and standards covering optical fibre lines and related facilities in
a project area by providing that the ability to make such codes and
standards is not limited by preventing them from having the effect of
requiring particular design features or particular performance
requirements. For codes and standards of the kind envisaged to be useful,
they need to be able to deal with design features or particular performance
requirements. Moreover, these design features or particular performance
requirements may need to have effect both within the project area and
outside the project area. This recognises that optical fibre requirements
in a new development may also have implications for network design features
and performance requirements in other parts of the network.
Industry codes are registered by the ACMA in accordance with Part 6 of the
Act. In particular, before registering a code that is given to it by a
body or association representing a particular section of the
telecommunications industry, in a case where the code does not deal with
matters of substantial relevance to the community, in accordance with
subparagraph 117(1)(d)(ii), the ACMA must be satisfied that the code deals
with the matters covered by the code in an appropriate manner. In assessing
any codes it is expected that this would include the ACMA having regard to
the efficacy of the content of the codes in achieving their intended
purpose.
Item 9A - After subsection 118(4)
Item 9A would amend section 118 by adding proposed subsection 118(4AA).
Proposed subsection 118(4AA) provides a limited exception to the
application of the rule in subsection 118(4).
The rule in subsection 118(4) states that the ACMA must not make a request
under subsection 118(1) for a body or association in the telecommunications
industry (or the telemarketing industry or the e-marketing industry) to
develop an industry code, if the code would deal with a matter referred to
in paragraph 113(3)(f) (relating to privacy), and compliance with the code
would be likely to have the effect of requiring customer equipment,
customer cabling, a telecommunications network or a facility to have
particular design features or to meet particular performance requirements.
The rule in subsection 118(4) does not apply if the ACMA is satisfied that
the benefits to the community from the operation of the code would outweigh
the costs of compliance with the code.
Item 9A would amend section 118 to provide a specific exception to the rule
in subsection 118(4) to expedite the making of any relevant codes that may
be necessary to implement the policy of having fibre-to-the-premises or
fibre-ready facilities infrastructure installed in new developments.
Proposed subsection 118(4AA) provides that the rule in subsection 118(4)
does not apply to an industry code to the extent (if any) to which
compliance with the code is likely to have the effect of requiring optical
fibre lines or facilities that are used, or that are for use, in or in
connection with optical fibre lines in a project area for a real estate
development project to which proposed section 372B or 372C applies to have
particular design features or to meet particular performance requirements.
The terms 'facility' and 'optical fibre line' are defined in section 7 of
the Act.
The effect of the proposed provision is similar to the effect of proposed
subsection 115(5) (see the explanatory notes for item 9). By facilitating
the development of this kind of industry codes by clarifying the ability of
the ACMA to request such codes to be developed, the measure will help
provide necessary guidance on relevant technical matters and help respond
to calls from stakeholders for such guidance to promote nationally
consistent network and service outcomes.
Item 10 - After Part 20
Item 10 would insert proposed Part 20A into the Act. Proposed Part 20A
contains provisions relating to the deployment of optical fibre and the
installation of fibre-ready facilities in the project areas of real estate
development projects which are specified in, or ascertained in accordance
with, a legislative instrument made by the Minister.
Proposed Part 20A-Deployment of optical fibre etc.
Proposed Part 20A of the Act will include two basic rules:
- the 'fibre-connection requirement', under which a person must not
install a line in a specified new development unless the line is an
optical fibre line and meets any other specified conditions; and
- the 'fibre-ready infrastructure requirement', under which a person
must not install a fixed-line facility in specified new developments
unless the facility is a fibre-ready facility and meets any other
specified conditions.
The Minister will be able to make legislative instruments necessary to give
effect to these rules (e.g. specifying or identifying the developments in
which they are to apply; determining the characteristics of a 'fibre-ready
facility'; setting any other conditions that are to apply; and providing
exemptions from the rules).
Proposed Part 20A has two main divisions. Division 2 deals with the fibre
connection requirement, ie. the installation of optical fibre lines as part
of 'real estate development projects' (see proposed section 372D) .
Division 3 deals with the fibre-ready infrastructure requirement, ie. the
installation of fibre-ready facilities as part of 'real estate development
projects'.
Where optical fibre is installed in new developments, it will, as with
other types of telecommunications infrastructure, need to be connected to
the wider telecommunications network to have its full utility-for example
to provide 'any-to-any connectivity' (see Part 7 of Schedule 1 to the Act).
The provision of backhaul, for example, for such optical fibre
infrastructure will be a necessary consequence of installing a network in a
new development. Should it be necessary, it is envisaged that guidance on
this matter could be provided either under industry codes or standards made
under Part 6 of the Act, or through the specification of conditions under
proposed paragraphs 372B(2)(b) and 372C(2)(b) (see below).
Proposed Division 1-Simplified outline
Proposed section 372A Simplified outline
Proposed section 372A provides a simplified outline of proposed Part 20A to
assist the reader.
Proposed Division 2-Deployment of optical fibre
Proposed Division 2 of Part 20A applies to the deployment of optical fibre
to building lots and to building units.
Proposed section 372B Deployment of optical fibre lines to building lots
Proposed section 372B provides the general rule that where
telecommunications lines are installed in specified real estate development
projects that involve the subdivision of land, those lines must be optical
fibre lines.
Proposed subsection 372B(1) limits the operation of proposed section 372B
by providing that the section only applies to the installation of a line in
the project area, or any of the project areas for a real estate development
project, if certain criteria set out at proposed paragraphs 372B(1)(a)-(g)
are met. The purpose of the criteria set out at proposed subsection
372B(1) is to clarify the types of fixed lines in specified new development
projects that are required to be optical fibre and to meet any conditions
specified in a Ministerial instrument. That is, the rule preventing the
installation of lines that are not optical fibre only applies to particular
lines that meet the described criteria set out below.
Proposed paragraph 372B(1)(a) limits proposed section 372B to real estate
development projects that involve the subdivision of land. This would
include, but not necessarily be limited to, developments in areas resulting
from the release or rezoning of areas of land to allow for the commencement
of new development projects. It would also include urban in-fill
developments where an existing block of land is subdivided, or multiple
contiguous existing blocks of land are subdivided, before redevelopment.
Proposed paragraph 372B(1)(b) provides that the rule in proposed
subsection 372B(2) only applies to real estate development projects
specified in, or ascertained in accordance with, a legislative instrument
made by the Minister. The Minister would have the option of specifying
real estate development projects individually, or by class (see subsection
13(3) of the LIA), or of nominating characteristics of projects to which
the rule is to apply. It is intended that the Minister have a broad
discretion as to how real estate development projects are specified or
identified. For example, it is envisaged that the Minister might make an
instrument specifying real estate development projects by reference to the
name, size, location, date of planning approval, proximity to existing
infrastructure, the number of lots, or estimated cost of providing fibre-to-
the-premises in a real estate development project.
Proposed paragraph 372B(1)(c) provides that the rule in proposed subsection
372B(2) only applies to lines that have a particular intended use: a line
will be subject to the rule if the line is wholly or primarily used or for
use to supply carriage services to end-users or prospective end-users in
building units. Proposed paragraph 372B(1)(d) clarifies that the building
units in question are building units constructed, or proposed to be
constructed, on the building lots mentioned in proposed paragraph
372B(1)(a).
The effect of these criteria is to make it clear that the lines in question
are physical fixed lines, wholly or primarily used to deliver services to
end-users or prospective end-users in building units that have been or will
be constructed on the building lots. For instance, the criteria would
cover situations where a line is connected to individual premises (a
building unit) in a development, such as a dwelling or a place of business,
and an end-user in those premises uses that line, which they would do by
means of customer equipment (telephone, computer, wireless router). There
may be customer cabling (see section 20 of the Act) between the customer
equipment and the line in question. (Note that the rule in proposed
subsection 372B(2) does not apply to customer cabling: see section 20 of
the Act, and proposed paragraph 372B(1)(e).)
By way of counter-example, the requirement in subsection 372B(2) does not
apply to a line that may be installed within a real estate development
project leading to a mobile phone tower. In that case, the line in
question is not wholly or primarily for use to supply carriage services to
end-users or prospective end-users in building units. End-users of
services provided using a mobile phone tower would frequently access those
services outside of the building units in question. For this reason, a
line that is installed in a real estate development project for this
purpose would not be subject to the rule at subsection 372B(2), since it
would not satisfy the criteria at proposed paragraphs 372B(1)(c) and (d).
Proposed paragraph 372B(1)(e) provides that the prohibition on installation
of non-fibre lines for a real estate development project in proposed
subsection 372B(2) does not apply to a line on the customer side of the
boundary of a telecommunications network (section 22 of the Act defines the
'boundary of a telecommunications network'). That is, proposed subsection
372B(2) does not apply in relation to customer cabling, as that term is
defined in subsection 20(4) of the Act. An example is a line that connects
a telephone or a computer to equipment like an optical network terminal
connecting the home to the fibre network. Proposed Part 20A does not
affect such customer cabling.
The prohibition on installation of non-fibre lines in specified
developments does not apply to private networks. The fibre-connection
requirement does not apply unless a line is used (or intended for use) to
supply a carriage service to the public (proposed paragraph 372B(1)(f)).
Section 44 of the Act provides an explanation of when a network unit is
taken to be used to supply a carriage service 'to the public'. Proposed
section 372J (described below) adopts this for the purpose of determining
whether a line is used to supply a carriage service to the public.
Notably, the effect of proposed paragraph 372B(1)(f) is that the rule at
proposed subsection 372B(2) will not apply to the installation of a line
for the private use of the line owner. This means, for example, that where
the users (or intended users) of a line are all within the immediate circle
(see section 23 of the Act) of the owner of the line, then the rule in
proposed subsection 372B(2) will not apply. Proposed subsection 372B(2)
therefore does not prevent the installation of non-fibre lines if those
lines are only intended for private use.
The rule in proposed subsection 372B(2) will only apply to lines installed
after the commencement of proposed section 372B (proposed
paragraph 372B(1)(g)). This is to clarify that the fibre connection
requirement is not intended to apply retrospectively.
Proposed subsection 372B(2) provides that, where the criteria specified at
proposed subsection 372B(1) are met, a person must not install a line in
the project area, or any of the project areas, for a real estate
development project, unless it is an optical fibre line (proposed paragraph
372B(2)(a)) and any conditions specified in a Ministerial instrument under
proposed subsection 372B(4) are satisfied (proposed paragraph 372B(2)(b)).
The rule in proposed subsection 372B(2) is intended to apply so that in
real estate development projects where optical fibre is deployed, optical
fibre (rather than copper) is used throughout the development: ie.
deployment of optical fibre should occur from the outer boundary of the
real estate development project to the property boundary and then from the
property boundary to the network boundary point (see section 22 of the Act)
for the building unit on the building lot.
The ability for the Minister to specify in a legislative instrument
conditions that must be satisfied (proposed paragraph 372B(2)(b) and
proposed subsection 372B(4)) is intended to enable the specification of the
characteristics, features, performance requirements, methods of
installation or other matters relating to the optical fibre infrastructure
to be installed in a project area, in both general terms (e.g. necessary
outcomes) and, if required, to a high degree of specificity. Amongst other
things, it is envisaged that specified conditions could, if necessary,
cover such matters as data speeds, other service features, quality of
service and reliability. Conditions could be specified, if necessary, by
reference to external documents such as industry codes and standards or
other specifications by virtue of section 589 of the Act.
Section 589 of the Act already provides that legislative instruments made
under that Act (including a legislative instrument made under proposed
subsection 372B(4)) can make provision in relation to a matter or matters
by adopting or incorporating matter contained in any other instrument or
writing, as in force at a particular time or as in force from time to
time. In reliance on section 589, the Minister could therefore specify
conditions in a legislative instrument by reference to technical standards
determined by an industry body, or by a particular carrier (e.g. NBN Co),
that relate to the deployment of optical fibre networks, as those standards
are in force from time to time.
Different types of conditions could be specified in relation to different
types of real estate development project, in reliance on subsection 33(3A)
of the AIA. For example, the Minister may specify certain conditions that
are to apply to all real estate development projects, and particular
conditions that are only to apply to non-residential real estate
development projects, or certain conditions that are to apply to
residential real estate development projects of a particular minimum size.
For example, the capacity to provide higher data speeds may be required of
optical fibre lines to be provided to schools, community facilities or
businesses as opposed to residential properties.
It is envisaged that such conditions as may be specified under proposed
paragraph 372B(2)(b) and proposed subsection 372B(4) would be directed at
delivering a high level of consistency with end-user experiences available
on the National Broadband Network. This would provide guidance to
infrastructure providers and assurance to developers, property buyers,
local councils and others that appropriate fibre-to-the-premises
infrastructure was being installed.
Proposed subsection 372B(3) provides that, for the purposes of proposed
paragraph 372B(1)(c), it does not matter if the end-users or potential end-
users are not identifiable, as may often be the case when a building unit
is yet to be constructed on a building lot, or a building unit is not
occupied.
Proposed subsection 372B(5) allows the Minister to exempt conduct specified
in, or ascertained in accordance with, a legislative instrument from the
scope of proposed subsection 372B(1). Proposed subsection 372B(6) confirms
that an exemption under proposed subsection 372B(5) may be unconditional or
subject to such conditions (if any) as are specified in the exemption. For
example, subsections 372B(5) and (6) could allow the Minister to exempt the
installation of copper lines from the prohibition on installation in
proposed subsection 372B(1) if:
. fibre-ready facilities were installed to prepare the relevant project
area for installation of optical fibre lines at a later date; or
. complying optical fibre lines were installed simultaneously; or
. copper infrastructure is required to operate particular customer
equipment because of its technical characteristics; or
. the anticipated cost of installing optical fibre lines is above an
identified threshold.
Proposed subsection 372B(7) provides that a legislative instrument made by
the Minister under proposed paragraph 372B(1)(b) or proposed subsection
372B(5) may confer functions or powers on the ACMA. For example, an
instrument under proposed paragraph 372B(1)(b) may provide the ACMA with a
decision making role in determining whether or not a real estate
development project is subject to the rule in proposed subsection 372B(2).
Under such an instrument, the ACMA may be empowered to make decisions about
individual real estate development projects that are subject to the rule in
proposed subsection 372B(2). Similarly, an instrument made under proposed
subsection 372B(5) may provide the ACMA with a decision making role in
determining whether or not conduct is exempt from the rule in proposed
subsection 372B(2). For instance, if such an instrument provides an
exemption where the anticipated cost of installing optical fibre lines is
above a certain threshold, the ACMA may be given a role in approving a
developer's estimate of those costs.
Proposed subsection 372B(8) contains ancillary contravention provisions
which prohibit the involvement of a person in a contravention of proposed
subsection 372B(2) in any manner that is outlined in that subsection.
Proposed subsection 372B(9) provides that proposed subsections 372B(2) and
(8) are civil penalty provisions. This means if a person contravened
subsection 372B(2) or 372B(8)-e.g. if a person installed a line that is not
optical fibre or does not meet the specified conditions-they would be
subject to the pecuniary penalty provisions in Part 31 of the Act.
Subsection 570(1) of the Act states that if the Federal Court is satisfied
that a person has contravened a civil penalty provision, the Court may
order the person to pay to the Commonwealth such pecuniary penalty, in
respect of each contravention, as the Court determines to be appropriate.
The pecuniary penalty payable under subsection 570(1) by a body corporate
is not to exceed $250,000 for each contravention. The pecuniary penalty
payable under subsection 570(1) by a person other than a body corporate is
not to exceed $50,000 for each contravention (see subsection 570(3)).
Proceedings for the recovery of a pecuniary penalty under section 570 may
be commenced by the Minister, the ACCC or the ACMA.
Proposed section 372C Deployment of optical fibre lines to building
units
Proposed section 372C provides the general rule that non-fibre lines must
not be installed in specified real estate development projects that involve
the construction of buildings. As such it covers situations where land has
already been subdivided but buildings are yet to be constructed or where
existing buildings are demolished and new ones built. This is in contrast
to proposed section 372B which applies where a development involves both
the subdivision of land and the subsequent construction of buildings on the
land. (Note that the rule in proposed section 372B only applies where a
development that involves a subdivision will, eventually, also involve
construction of a building: see proposed paragraph 372B(1)(d), described
above, and the definition of 'real estate development project' at proposed
subsection 372D(1), described below.)
Proposed subsection 372C(1) limits the operation of proposed section 372C
by providing that the section only applies to the installation of a line in
the project area, or any of the project areas for a real estate development
project, if certain criteria set out at proposed paragraphs 372C(1)(a)-(f)
are met. The purpose of the criteria set out at proposed subsection
372C(1) is to clarify the types of fixed lines in specified new development
projects that are required to be optical fibre and to meet any conditions
specified in a Ministerial instrument. That is, the rule preventing the
installation of lines that are not optical fibre only applies to particular
lines that meet the described criteria set out below.
Proposed paragraph 372C(1)(a) limits proposed section 372C to real estate
development projects that involve the construction of one or more building
units. As indicated under proposed section 372F, a 'building unit'
includes buildings for single occupation or use, units under a strata title
(or similar) system and parts of buildings that are for separate lease. It
would also cover multi-premise leasehold or freehold buildings such as
shopping centres. The construction of a building unit on a vacant lot,
knock-down and rebuild projects and projects involving additions to
buildings could all potentially fall under proposed paragraph 372C(1)(a).
Proposed paragraph 372C(1)(b) provides that the rules in proposed section
372C only apply to real estate development projects specified in, or
ascertained in accordance with, a legislative instrument made by the
Minister. The Minister would have the option of specifying real estate
development projects individually or by class (see subsection 13(3) of the
LIA), or of nominating characteristics of projects to which the rule is to
apply. For instance, and as under proposed section 372B, the Minister
might make an instrument specifying real estate development projects by
reference to the name, size, location, date of planning approval, proximity
to existing infrastructure, number of dwellings, or estimated cost of
providing fibre-to-the-premises in a real estate development project.
The remaining criteria set out in paragraphs 372C(1)(c)-(f) are almost
identical to the criteria set out in proposed paragraphs 372B(1)(c)-(g).
See the explanatory notes for proposed section 372B for an explanation of
those criteria. Proposed paragraph 372B(1)(d) has not been replicated in
proposed section 372C as it is not required: that paragraph refers to a
building being constructed on a building lot, which is a term that is not
used in proposed section 372C.
Proposed subsection 372C(2) provides that, where a line meets the criteria
specified at proposed subsection 372C(1), a person must not install a line
in the project area, or any of the project areas, for a real estate
development project, unless it is an optical fibre line (proposed paragraph
372C(2)(a)) and any conditions specified in a legislative instrument made
by the Minister under proposed subsection 372C(4) are satisfied (proposed
paragraph 372C(2)(b)).
As is the case under proposed section 372B, the ability for the Minister to
specify in a legislative instrument conditions that must be satisfied
(proposed paragraph 372C(2)(b) and proposed subsection 372C(4)) is intended
to enable the specification of the characteristics, features, performance
requirements, methods of installation or other matters relating to the
optical fibre infrastructure to be installed in a project area in both
general terms (e.g. necessary outcomes) and, if required, to a high degree
of specificity.
Proposed subsection 372C(3) provides that, for the purposes of proposed
paragraph 372C(1)(c) it does not matter if the end-users or potential end-
users are not identifiable (as may be the case if the relevant building
unit is not sold until after construction has been completed).
Proposed subsections 372C(4) to (9) mirror the provisions in proposed
subsections 372B(4) to (9), however, they apply in respect of a real estate
development project under proposed subsection 372C(1) (which deals with the
construction of one or more building units). Accordingly, see the earlier
explanatory notes for proposed subsections 372B(4) to (9) for information
about proposed subsections 372C(4) to (9) above.
Proposed Division 3-Installation of fibre-ready facilities
Proposed Division 3 of Part 20A relates to the installation of fibre-ready
fixed-line facilities in real estate development projects that involve
building lots and building units. The fibre-ready connection requirement
may be imposed in real estate development projects where it would not be
practicable to immediately impose the fibre connection requirement under
proposed Division 2, due, for example, to the immediate cost of
installation of fibre or other considerations. In these circumstances, the
application of fibre-ready infrastructure requirement in these projects is
intended to ensure that there is appropriate passive infrastructure
installed at the time of the subdivision, so that a carrier (e.g. NBN Co)
will be able to install optical fibre lines at a later date quickly, at low
cost and with minimum inconvenience to the community. The requirement
could apply to any type of passive infrastructure: this could include
appropriate underground pipes, conduit, or poles, in the case of above-
ground installation, where this is necessary due to terrain or is otherwise
accepted practice.
However, even where a real estate development project is subject to the
fibre-ready infrastructure requirement under proposed Division 3 and not
the fibre connection requirement under proposed Division 2, there is
nothing to prevent a developer from installing optical fibre lines in that
project, so long as those lines comply with any relevant industry codes
and/or standards.
Generally the principles and concepts used in proposed Divisions 2 and 3
are the same. Much of the commentary in relation to Division 2 is also
relevant to Division 3.
Proposed section 372CA Installation of fibre-ready facilities-building
lots
Proposed section 372CA provides the general rule that where fixed-line
facilities are installed in specified real estate development projects that
involve the subdivision of land, those facilities must be fibre-ready.
Proposed subsection 372CA(1) limits the operation of proposed section 372CA
by providing that the rule in proposed subsection 372CA(2) only applies to
the installation of a fixed-line facility in the project area or any of the
project areas for a real estate development project if the criteria at
paragraphs 372CA(1)(a)-(c) are satisfied. Those criteria are:
. the project involves the subdivision of one or more areas of land
into building lots (proposed paragraph 372CA(1)(a)); and
. the project is specified in, or ascertained in accordance with, a
legislative instrument made by the Minister (proposed paragraph
372CA(1)(b)); and
. the installation occurs after the commencement of section 372CA
(proposed paragraph 372CA(1)(c)).
The criteria that are set out in proposed subsection 372CA(1) are almost
identical to the criteria set out in paragraphs 372B(1)(a), (b) and (g).
See the explanatory notes for proposed subsection 372B(1) for an
explanation of those criteria.
Proposed subsection 372CA(2) provides that a person must not install a
fixed-line facility in the project area, or any of the project areas, for a
real estate development project, unless it is a 'fibre-ready facility'
(proposed paragraph 372CA(2)(a)) and any conditions specified in a
Ministerial instrument under proposed subsection 372CA(3) are satisfied
(proposed paragraph 372CA(2)(b)).
The definition of 'fixed-line facility' is given at proposed section 372HA:
a fixed-line facility is a facility (which is a term defined in section 7
of the Act) other than a line, which is used or for use in connection with
a line, where the line is used to supply carriage services to the public
and is not on the customer side of the boundary of a telecommunications
network. Pits, ducts, sub-ducts, conduit and plinths for equipment
housings are examples of fixed-line facilities that are used in the
underground deployment of lines. Poles are an example of a fixed-line
facility used in the above-ground deployment of lines, where this is
necessary due to terrain or is otherwise accepted practice.
Proposed section 372HB provides that the Minister may make a legislative
instrument declaring that a specified fixed-line facility is a 'fibre-ready
facility'. The Minister may also specify in a legislative instrument
conditions that must be met in the installation of fibre-ready facilities
(proposed subsection 372CA(3)). It is intended that the Minister would
exercise these powers in such a way that would:
- specify the types of fixed-line facilities that would be considered to
be 'fibre-ready' and therefore permitted to be installed in specified
developments;
- describe the attributes that fixed-line facilities that could be used
in the deployment of fibre must have in order to be classified as
'fibre-ready' and therefore permitted to be installed in specified
developments; and
- prevent the installation in those developments of any other types of
fixed-line facilities that could inhibit the deployment of fibre.
Examples of possible required attributes for fixed-line facilities that
could be specified by the Minister would include the design of the passive
network (e.g. the location of ducting, plinths and pits and the angle of
ducting), the characteristics of components (e.g. the minimum internal
diameter for ducts and conduits, the size of pits, the strength and
capacity of poles) and installation and operational requirements (e.g.
ensuring ducts are not blocked, the use of sub-ducting). The intention
would be to ensure that the fibre-ready fixed-line facilities that are
installed in these developments will permit fibre to be installed at a
later time in a quick and efficient manner, at low cost and with minimum
inconvenience to the community.
It is intended that the Minister may make an instrument under proposed
section 372HB declaring that certain fixed-line facilities are 'fibre-ready
facilities' by reference to relevant codes or standards determined by an
industry body, or the specifications of a particular carrier (e.g. NBN Co)-
see section 589 of the Act, described in detail in the explanatory note for
proposed section 372B above.
As is the case under proposed sections 372B and 372C, the Minister will
have the ability to specify in a legislative instrument conditions that
must be satisfied (proposed paragraph 372CA(2)(b) and proposed subsection
372CA(3)). Like those earlier provisions, this is intended to enable the
specification of the characteristics, features, performance requirements,
method of installation or other matters relating to the fixed-line
infrastructure to be installed in a project area, in both general terms
(e.g. necessary outcomes) and, if required, to a high degree of
specificity. Conditions could be specified, if necessary, by reference to
external documents such as industry codes and standards or the
specifications of a particular carrier (e.g. NBN Co)-see section 589 of the
Act, described in detail in the explanatory note for proposed section 372B
above.
Proposed subsection 372CA(5) allows the Minister to exempt conduct
specified in, or ascertained in accordance with, a legislative instrument
from the scope of proposed subsection 372CA(1). Proposed subsection
372CA(6) confirms that an exemption under proposed subsection 372CA(5) may
be unconditional or subject to such conditions (if any) as are specified in
the exemption. For example, proposed subsections 372CA(5) and (6) could
allow the Minister to permit the installation of fixed-line facilities
other than fibre-ready facilities where:
. a particular facility other than a fibre-ready facility is necessary
for the provision of particular non-fibre lines and its provision
will not impact on the general availability of fibre-ready
facilities;
. fibre-ready facilities are also in place (e.g. a dual provisioning
approach); or
. the anticipated cost of installing fibre-ready facilities is above
an identified threshold.
Proposed subsection 372CA(7) provides that a legislative instrument made by
the Minister under proposed paragraph 372CA(1)(b) or proposed subsection
372CA(5) may confer functions or powers on the ACMA. Proposed subsection
372CA(7) mirrors proposed subsection 372B(8). See the explanatory notes for
proposed section 372B for an explanation of this provision.
To ensure that carriers can gain access to the fibre-ready infrastructure
that is installed as a result of the operation of the fibre-ready
infrastructure requirement, proposed subsection 372CA(4) provides that the
regulations may establish a regime for third party access to a fixed-line
fibre-ready facility in the project area, or any of the project areas, for
a real estate development project. The purpose of proposed
subsection 372CA(4) is to flag the eventual introduction at a later stage
of an access regime applying to fibre-ready infrastructure, under which the
owner or operator of fibre-ready facilities installed in specified
developments will be required to give access to those facilities to
carriers rolling out telecommunications lines. An access regime is
necessary to ensure that the intended purpose of the fibre-ready
infrastructure requirement-to permit the later roll-out of optical fibre
lines-can be achieved. It is envisaged that an access regime will be
established under the regulations under which carriers rolling out fibre-to-
the-premises networks, such as NBN Co, can gain access to the fibre-ready
infrastructure for deployment of optical fibre infrastructure.
Regulations made under proposed subsection 372CA(4) would have the effect
that the third party access regime would apply to a person who installs the
fixed-line fibre-ready facility, such as a carrier, but also to any future
owner or operator of the facility, including a carrier. Regulations made
under proposed subsection 372CA(4) may provide that failure to comply with
the third party access regime under those regulations is a civil penalty
provision (see the amendment to the definition of 'civil penalty provision'
proposed by item 12 , described below).
The approach of including the access regime in regulations to be made at a
later date, rather than in the Bill, is adopted to permit further
consultation to occur in the drafting of the access regime. Regulations
are subject to Parliamentary scrutiny and disallowance as a matter of
course.
Proposed subsection 372CA(8) provides that regulations made for the
purposes of proposed subsection 372CA(4) may confer functions or powers on
the ACCC. For example, regulations made for the purposes of proposed
subsection 372CA(4) could provide that the terms and conditions of an
access to a fibre-ready facility may be:
. agreed between the owner or operator of the facility and the carrier who
is to install the optical fibre (e.g. NBN Co); or
. as determined by an arbitrator appointed by the owner or operator of the
facility and the carrier who is to install the optical fibre (e.g. NBN
Co); or
. if the parties fail to agree on an arbitrator, arbitrated by the ACCC.
Such an approach could be modelled on Part 5 of Schedule 1 of the Act. An
alternative example is that regulations could provide that the ACCC may
establish upfront the terms and conditions of access to a fibre-ready
facility.
To enable the effective administration of an access regime, if established
by the regulations, the ACCC would have the discretion to delegate the
functions and powers in relation to the access regime to a single member of
the ACCC (see the amendment to subsection 25(1) of the TPA proposed by item
11, described below).
Proposed subsection 372CA(9) provides that regulations made for the
purposes of proposed subsection 372CA(4) may confer jurisdiction on a
court. This means that if the regulations establish a regime for third
party access to a fixed-line facility installed in the project area, or any
of the project areas for a real estate development project, then the
regulations could provide for the ACCC or other parties to commence action
in a court if an owner or occupier of a fixed-line facility did not comply
with a request for access to the facility in accordance with regulations
made under proposed subsection 372CA(4).
Proposed subsection 372CA(10) contains ancillary contravention provisions
which prohibit the involvement of a person in a contravention of proposed
subsection 372CA(2) in any manner that is outlined in that subsection.
Proposed subsection 372CA(11) provides that proposed subsections 372CA(2)
and (10) are civil penalty provisions. Proposed subsection 372CA(11)
mirrors proposed subsection 372B(10). See the explanatory notes for
proposed section 372B for an explanation of that provision.
Proposed section 372CB Installation of fibre-ready facilities-building
units
Proposed section 372CB provides the general rule that where fixed-line
facilities are installed in specified real estate development projects that
involve the construction of one or more building units, those facilities
must be fibre-ready.
Proposed subsection 372CB(1) limits the operation of proposed section 372CB
by providing that the section only applies to the installation of a fixed-
line facility in the project area or any of the project areas for a real
estate development project if the criteria at paragraphs 372CB(1)(a)-(c)
are satisfied. Those criteria are:
. the project involves the construction of one or more building units on
one or more areas of land (proposed paragraph 372CB(1)(a)); and
. the project is specified in, or ascertained in accordance with, a
legislative instrument made by the Minister (proposed paragraph
372CB(1)(b)); and
. the installation occurs after the commencement of proposed section
372CB (proposed paragraph 372CB(1)(c)).
The criteria that are set out in proposed subsection 372CB(1) are almost
identical to the criteria set out in proposed paragraphs 372B(1)(a), (b)
and (g). See the explanatory notes for proposed subsection 372B(1) for an
explanation of those criteria.
Proposed subsection 372CB(2) provides that a person must not install a
fixed-line facility in the project area, or any of the project areas, for a
real estate development project, unless it is a fibre-ready facility
(proposed paragraph 372CB(2)(a)) and any conditions specified in a
Ministerial instrument under proposed subsection 372CB(3) are satisfied
(proposed paragraph 372CB(2)(b)).
Proposed subsections 372CB(3)-(11) mirror proposed subsections 372CA(3)-
(11). See the explanatory notes for proposed section 372CA for an
explanation of those provisions, and also for a description of 'fixed-line
facility' and 'fibre-ready facility'.
Proposed Division 4-Miscellaneous
Division 4 sets out a number of new definitions supporting the operation of
proposed Part 20A and any legislative instruments made. The definitions
will also support any exemptions contained in legislative instruments.
Proposed section 372D Real estate development projects etc.
Proposed section 372D defines 'real estate development project' for the
purposes of the Act in relation to projects involving subdivision (proposed
sections 372B and 372CA) and/or construction (proposed sections 372C and
372CB). The term is used in two separate but similar manners, depending on
whether a project relates to building lots or building units. Proposed
section 372D additionally provides meanings of the terms 'project area' and
'building lot'.
Proposed subsection 372D(1) provides a first meaning of 'real estate
development project' for projects involving the subdivision of land. For a
project to be considered a real estate development project, it must satisfy
the requirements of proposed paragraphs 372D(1)(a)-(c).
Proposed paragraph 372D(1)(a) indicates that the definition of 'real estate
development project' in proposed subsection 372D(1) applies in respect of
projects that involve the subdivision of one or more areas of land into
lots (whether the resultant blocks of land are called 'lots' or given
another name).
Proposed subparagraph 372D(1)(b)(i) indicates that a project involving the
making available of lots (as referred to in paragraph 372D(1)(a)) will be a
'real estate development project' if it would be reasonable to expect that
one or more building units would be subsequently constructed on the lots.
Proposed subparagraph 372D(1)(b)(i) would cover instances where building
lots are offered for sale to builders, developers or members of the public
and there is sufficient authorisation in place, or it is reasonable to
expect that sufficient authorisation could be obtained, to permit the
construction of one more building units on one or more of the building
lots, potentially by a subsequent developer. That is, this covers
instances where a real estate development project involves only the
subdivision of land and the installation of utilities, where the subdivided
lots are on-sold to a different developer prior to the actual construction
of buildings on the land. The explanatory note for proposed section 372F,
below, discusses the meaning of 'building unit' and the definition of
'building lot' is discussed below in regard to proposed subsection 372D(3).
Proposed subparagraph 372D(1)(b)(ii) indicates that projects involving the
construction of one or more building units on any of the lots and the
making available of any of those buildings units for sale or lease will
also be considered a 'real estate development project'. Proposed
subparagraph 372D(1)(b)(ii) is intended to cover projects that combine
subdivision of land into lots, construction of building units on the
subdivided lots, and the sale or lease of the building units. In a number
of cases this would include 'off the plan' sales or leases of, for example,
units and/or land and buildings.
In order for a project to be a 'real estate development project' under
proposed subsection 372D(1), the project must also satisfy the conditions
(if any) that are specified by the Minister in a legislative instrument
(see proposed paragraph 372D(1)(c) and proposed subsection 372D(4)). This
allows for provisions to be inserted into a legislative instrument which
further specify what is meant by 'real estate development project' under
proposed subsection 372D(1). This enables greater specificity in relation
to this definition should it be required.
Proposed subsection 372D(2) provides a meaning of 'project area', for real
estate development projects falling under proposed subsection 372D(1), for
the purposes of the Act, by reference to an area of land mentioned in
proposed subsection 372D(1). A real estate development project can be
comprised of one or more project areas.
Proposed subsection 372D(3) provides a definition of 'building lot' for the
purposes of the Act, by reference to a lot mentioned in proposed subsection
372D(1). Pursuant to this definition, a lot (however described) that has
been subdivided from one or more areas of land (as referred to in proposed
subsection 372D(1)), is a 'building lot'.
Proposed subsection 372D(4) allows the Minister to specify conditions for
the purposes of proposed paragraph 372D(1)(c) by means of a legislative
instrument.
Proposed subsection 372D(5) provides a second meaning of 'real estate
development project' for projects involving construction of building units.
The definition of 'real estate development project' in proposed subsection
372D(5) differs from the definition provided in proposed subsection 372D(1)
in that the project does not have to involve the subdivision of land into
building lots to come within the definition. For example, it would cover
construction projects where land is already subdivided or no subdivision is
required.
Proposed subsection 372D(5) applies so that a project that involves both
the construction of one or more building units on one or more areas of land
and the making available of any or all of those building units for sale or
lease will be considered to be a 'real estate development project' for the
purposes of the Act. This would include projects where, for example:
. one or more old buildings are torn down and one or more new building
units are constructed on the relevant area of land and sold or offered
for lease; and/or
. one or more building units are constructed on one or more buildings
lots (where one or more buildings or building units are already
located on the relevant building lot or lots) and offered for sale or
lease; and/or
. one or more building units are constructed on one or more vacant
building lots and offered for sale or lease.
In order for a project to be a 'real estate development project' under
proposed subsection 372D(5), the project must also satisfy the conditions
(if any) that are specified by the Minister in a legislative instrument
(see proposed paragraph 372D(5)(b) and proposed subsection 372D(7)). This
allows for provisions to be inserted into a legislative instrument which
further specify what is meant by 'real estate development project' under
proposed subsection 372D(5). This enables greater specificity in relation
to this definition should it be required.
Proposed subsection 372D(6) provides a meaning of 'project area', for real
estate development projects falling under proposed subsection 372D(5).
Proposed subsection 372D(7) allows the Minister to specify conditions for
the purposes of proposed paragraph 372D(5)(b) by means of a legislative
instrument.
Proposed subsection 372D(8) contains rules to assist in the application of
proposed subsections 372D(1) and (5). This provision seeks to take account
of the complexity that may be involved in development projects and to make
it clear that the intention of the provision is to define 'real estate
development project' so as to capture developments broadly, notwithstanding
complexities of the kind specified.
Proposed paragraph 372D(8)(a) states that it is immaterial whether the
project has been, is being, or will be implemented in stages. This means
that if a project is divided into multiple stages of land release,
construction, sale/lease or otherwise, this does not matter when
considering whether the project is a 'real estate development project' for
the purposes of proposed subsections 372D(1) and (5).
Proposed paragraph 372D(8)(b) states that it is immaterial whether
different elements of the project have been, are being, or will be, carried
out by different persons. This means that the way in which work or other
aspects of the project are divided between different persons is irrelevant
when considering whether the project is a 'real estate development project'
for the purposes of proposed subsections 372D(1) and (5).
Proposed paragraph 372D(8)(c) states that it is immaterial whether one or
more approvals are given, or required, or will be required, under a law of
the Commonwealth, a State or Territory, for the project or any element of
the project. This means that the definition of 'real estate development
project' for the purposes of proposed subsections 372D(1) and (5) is
applicable regardless of the number of planning approvals, building
approvals or other approvals for the project, however described.
Proposed paragraph 372D(8)(d) states that for the purposes of proposed
subsections 372D(1) and (5) it is immaterial whether, in a case where the
project relates to two or more areas of land, those areas of land are under
common ownership. This paragraph recognises that in some cases different
owners of land may collaborate and 'pool' their land holdings for
collective subdivision, construction, and/or sale or lease. In those
circumstances the definition of 'real estate development project' would
apply in respect of the entirety of the areas of land collectively owned by
those persons.
Proposed section 372E Subdivision of an area of land
Proposed section 372E confirms, for the purposes of the Act, that if an
area of land has been subdivided into lots (however described), all
provisions in the Act that are relevant to that area of land or to those
lots are to apply to their full extent regardless of whether a part of the
area of land (e.g. a road, verges or footpaths) is not included in any of
those lots. There will be parts of a subdivision that will not ultimately
be subdivided into lots for sale or lease, such as roads, nature strips and
other common areas within the subdivision. These will still be covered by
these provisions.
Proposed section 372F Building units
Proposed section 372F provides a definition for 'building unit'.
Proposed subsection 372F(1) indicates that proposed section 372F applies to
a building that has been constructed in the past, is currently being
constructed, or is to be constructed in the future. It is necessary for
proposed section 372F to apply to past, present and future building
constructions given that the provisions proposed under the Bill use
definitions and concepts that rely upon the past, present and future
construction of buildings in order to describe a number of the obligations
set out under the Bill.
Proposed subsection 372F(2) provides, for the purposes of the Act, that if
the whole of the building is, or is to be, for single occupation or use
(for example a detached house), the building is a building unit.
Proposed subsection 372F(3) provides, for the purposes of the Act, that if
part of the building is, or is to be, held as a unit under a strata title
system (or similar system) established under a law of a State or Territory,
that part of the building is a building unit. This is to ensure that the
prohibition on the installation of lines that are not fibre optic applies
appropriately to strata title developments.
Proposed subsection 372F(4) provides, for the purposes of the Act, that if
part of the building is, or is to be, for separate lease, that part of the
building is a building unit. An example of this is a shopping centre where
each individual store is separately leased: those individual stores would
be 'building units' under this provision. It is also intended to apply to
such developments as housing units in retirement villages which may be held
on long-term leases, university halls of residence and the like.
Proposed section 372G Sale of building lots
Proposed section 372G makes clear, for the purposes of the Act, that a
person 'sells' a building lot if:
. the person transfers their freehold interest in the land concerned; or
. the person transfers their leasehold interest in the land concerned.
The words 'transfer', 'freehold interest' and 'leasehold interest' have not
been defined in a special manner in the Act and are therefore to be given
their ordinary meaning.
Proposed section 372H Sale of building units
Proposed section 372H makes clear, for the purposes of the Act, that a
person 'sells' a building unit if:
. where the whole of the building is to be used for single occupation or
use, and the building is not a strata title building - the person
transfers their freehold or leasehold interest in the land on which
the building unit is situated; or
. where the building unit is part of a strata title building- the person
transfers their unit.
Proposed section 372HA Fixed-line facilities
Proposed section 372HA provides a definition for 'fixed-line facility'.
Proposed section 372HA provides, for the purposes of the Act, that a fixed-
line facility is a facility (other than a line) used, or for use, in
connection with a line, where the line is not on the customer side of the
boundary of a telecommunications network and is used, or for use, to supply
a carriage service to the public.
Pits, ducts, conduit and plinths are examples of fixed-line facilities that
are used in the underground deployment of lines. Poles are an example of a
fixed-line facility used in the above-ground deployment of lines, where
this is necessary due to terrain or is otherwise accepted practice.
This definition explicitly excludes, for example, coverage of facilities
that are located within a customer's premises, such as ducting that could
be used for customer cabling linking customer equipment to the
telecommunications network. It is envisaged that any requirements for
fibre-ready facilities beyond the network boundary point within buildings
(e.g. equipment rooms, closets, risers, ducts) would be covered by relevant
building guidelines, codes or standards. An example of such a document is
the Australian Building Code Board's Guideline Document, National Digital
Building Telecommunications Access, published in 2006.
Proposed section 372HB Fibre-ready facilities
Proposed subsection 372HB(1) provides that the Minister may, by legislative
instrument, declare a specified fixed-line facility is a fibre-ready
facility for the purposes of the Act. The Minister would have the option of
declaring fixed-line facilities as fibre-ready facilities individually or
by class (see subsection 13(3) of the LIA).
It is envisaged that the Minister would exercise this power to make a
legislative instrument declaring certain fixed-line facilities to be fibre-
ready facilities, and at the same time would make a legislative instrument
specifying conditions that must be met in the installation of fibre-ready
facilities (proposed subsection 372CA(3)). It is envisaged that this could
be done in a way that would:
. specify the types of fixed-line facilities that would be considered to be
'fibre-ready' and therefore permitted to be installed in specified
developments;
. describe the attributes that fixed-line facilities that could be used in
the deployment of fibre must have in order to be classified as 'fibre-
ready' and therefore permitted to be installed in specified developments;
and/or
. prevent the installation in those developments of any other types of
fixed-line facilities that could inhibit the deployment of fibre.
Examples of possible required attributes for fixed-line facilities that
could be specified by the Minister would include the design of the passive
network (e.g. the location of ducting, plinths and pits and the angle of
ducting), the characteristics of components (e.g. the minimum internal
diameter for ducts and conduits, the size of pits, the strength and
capacity of poles) and installation and operational requirements (e.g.
ensuring ducts are not blocked, the use of sub-ducting). The intention
would be to ensure that the fibre-ready fixed-line facilities that are
installed in these developments will permit fibre to be installed at a
later time in a quick and efficient manner, at low cost and with minimum
inconvenience to the community.
It is intended that the Minister may make an instrument under proposed
section 372HB declaring that certain fixed-line facilities are 'fibre-ready
facilities' by reference to relevant codes or standards determined by an
industry body, or the specifications of a particular carrier (e.g. NBN Co)-
see section 589 of the Act, described in detail in the explanatory note for
proposed section 372B above.
Proposed section 372HC Installation of a facility
Proposed section 372HC provides that the meaning of 'install' in relation
to a facility includes, but is not limited to, construction of the facility
on, over or under any land, and attachment of the facility to any building
or other structure. This definition is similar to the definition of
'installation' in Schedule 3 to the Act. The term 'install' is key to the
operation of the fibre connection requirement at proposed sections 372B and
372C and the fibre-ready infrastructure requirement at proposed sections
372CA and 372CB.
Proposed section 372J Supply to the public
Proposed section 372J sets out when a line is taken to be used, or for use,
to supply a carriage service to the public, for the purposes of proposed
Part 20A. That is, if:
. a line consists of, or forms part of a network unit; and
. under section 44 of the Act, the network unit is taken, for the
purposes of section 42 of the Act, to be used to supply a carriage
service to the public.
Proposed sections 372B and 372C both prohibit the installation of a line
for a real estate development project unless the line is an optical fibre
line, and where, among other requirements, the line is used, or for use, to
supply a carriage service to the public (see proposed subsections 372B(2)
and (7) and proposed subsections 372C(2) and (7)). Therefore, it is
necessary to define the circumstances in which a line is taken to be used,
or for use, to supply a carriage service to the public.
Although the Act currently does not set out the circumstances in which a
'line' is taken to 'be used, or for use, to supply a carriage service to
the public', the Act does outline, under section 44, the circumstances in
which a 'network unit' is taken, for the purposes of section 42, to be used
to supply a carriage service to the public. The set of circumstances
outlined under section 44 for a 'network unit' are therefore adopted for
the purpose of outlining the circumstances in which a line is taken to 'be
used, or for use, to supply a carriage service to the public', where in the
first instance the line consists of, or forms part of a network unit.
Note: a 'network unit' includes a single line meeting certain distance
requirements as well as multiple line links connecting distinct places in
Australia which meet certain aggregate distance requirements (see sections
26 and 27 of the Act).
Trade Practices Act 1974
Item 11 - Subsection 25(1)
Subsection 25(1) of the TPA provides that the ACCC may by resolution
delegate to a single member of the ACCC, either generally or otherwise as
provided by the instrument of delegation, any of its powers under:
. the TPA (other than Part VIIA or section 152ELA of the TPA);
. Procedural Rules under Part XIC of the TPA;
. the Act;
. the Telecommunications (Consumer Protection and Service Standards) Act
1999;
. the Water Act 2007;
. Rules of Conduct under Part 20 of the Act; or
. the Australian Postal Corporation Act 1989;
except for the power to grant, revoke or vary authorisations or clearances
to a single member of the ACCC.
Item 11 would amend subsection 25(1) of the TPA by adding to this list
regulations made for the purposes of proposed subsection 372CA(4) or
372CB(4). Proposed subsections 372CA(4) and 372CB(4) provide that the
regulations may establish a regime for third party access to a fixed-line
facility in a project area, or any of the project areas for a real estate
development project, in relation to installation of fibre-ready facilities
for building lots and building units respectively. Proposed
subsections 372CA(8) and 372CB(8) provide that regulations made for the
purposes of proposed subsections 372CA(4) and 372CB(4) respectively, may
confer functions or powers on the ACCC. See the explanatory notes for
proposed sections 372CA and 372CB for an explanation of the application of
the third party access regime to fibre-ready facilities.
The effect of the proposed amendment is that if regulations were made under
proposed subsections 372CA(4) and/or 372CB(4) establishing a third-party
access regime for fibre-ready infrastructure, and that regime conferred on
the ACCC functions and powers relating to setting the terms and conditions
of access to that infrastructure, the ACCC could delegate to a single
member of the ACCC the powers and functions conferred on it for the
effective administration of the access regime.
Part 2-Consequential amendment relating to civil penalty provisions
Telecommunications Act 1997
Item 12 - Section 7 (before paragraph (k) of the definition of civil
penalty provision)
Item 12 inserts proposed paragraphs (jb)-(jj) before paragraph (k) of the
definition of 'civil penalty provision' in section of the Act. Proposed
paragraphs (jb)-(jj) contain references to proposed subsections 372B(2),
372B(8), 372C(2), 372C(8), 372CA(2), 372CA(10), 372CB(2), 372CB(10), and a
provision of regulations made for the purposes of subsection 372CA(4) or
subsection 372CB(4) that is declared by the regulations to be a civil
penalty provision.. This amendment would mean that if a person breached a
requirement in proposed subsection 372B(2), 372B(8), 372C(2), 372C(8),
372CA(2), 372CA(10), 372CB(2), 372CB(10), or a provision of regulations
made for the purposes of proposed subsection 372CA(4) or subsection
372CB(4) that is declared by the regulations to be a civil penalty
provision, they would be subject to the pecuniary penalties for breach of
civil penalty provisions in Part 31 of the Act.
With respect to the regulations, the effect of this amendment is that the
regulations made to establish a third-party access regime for fibre-ready
infrastructure may include a provision that a failure to comply with that
access regime is a civil penalty. That provision would need to be
identified as a civil penalty provision.
As outlined above in relation to clause 2, if Part 8 of Schedule 1 to the
Telecommunications Legislation Amendment (Competition and Consumer
Safeguards) Bill 2009 commences on or before 1 July 2010, the provisions in
this item will not commence.
Part 8 of Schedule 1 to the Telecommunications Legislation Amendment
(Competition and Consumer Safeguards) Bill 2009 would amend section 7 of
the Act to provide that 'civil penalty provision' means a provision of this
Act that is declared by this Act to be a civil penalty provision. Under
section 7 of the Act, "this Act" is defined to include the regulations.
Therefore, under this amendment it would still be the case that the
regulations made to establish a third-party access regime for fibre-ready
infrastructure could include a provision that a failure to comply with that
access regime is a civil penalty, so long as the provision is declared by
the regulations to be a civil penalty provision.
-----------------------
[1] http://www.bbpmag.com/2009issues/april09/BBP_April09_Primer.pdf
[2] Fibre to the Home Council, 2009 Fibre Primer, p.18, available at
www.ftthcouncil.org (accessed 25 February 2010)
[3] For further information, see, for example, Stephen Davies, FTTH
Communities Map, at http://www.ozftth.blogspot.com/2008/02/australian-
ftth-communities-map.html (accessed 5 February 2010)
[4] National Housing Supply Council 2008 State of Supply Report, p.35
[5] This figure is based on projections in the growth of serviceable
addresses in future years.
[6] OECD, Network Developments in Support of Innovation and End User Needs,
9 December 2009, pp. 38-9. Assuming a USD/AUD exchange rate of 0.85 -
0.93, OECD data quotes an average cost of $1,952 - $2,135 in the UK, $1,505
- 1,647 in the US and $1,582 - $1,731 in the Netherlands.
[7] http://www.parliament.sa.gov.au/NR/rdonlyres/55EB406A-CD9D-466B-AAB2-
978338DF8025/13672/AgencySubmissionPlayfordAlive.pdf
[8] Calculated from estimates supplied to DBCDE by Telstra, TransACT,
Broadcast Engineering Services Ltd and Stephen Davies of Opticomm
[9] 'Fibre-ready infrastructure' refers to passive infrastructure such as
ducting, pits and poles that are designed, provisioned and installed so as
to facilitate the ready installation of FTTP at a later date.
[10] HIA has over 40,000 members. This includes developers, builders and
suppliers of various types and size. The largest 100 companies won
contracts worth $57 billion in 2008/09, work equal to 67 per cent of all
non-mining projects started in the year to March 2009.
[11] See for example: Climate Risk, Towards a High-Bandwidth, Low-Carbon
Future, 2008, at http://www.climaterisk.com.au/wp-
content/uploads/2007/CR_Telstra_ClimateReport.pdf
[12] 'Conventional passive infrastructure' means passive infrastructure
suitable for copper lines but not optimised for later fibre roll-outs. This
means it may not be appropriately designed or dimensioned - for example,
conduits may be too narrow, ducts bends may be too sharp or pits may be too
small or poorly placed.
[13] 90% x 210,000 = 189,000. 189,000 x $1,000 = $189m.
[14] 189,000 premises x $3,000 (being $1,500 for the additional cost of
FTTP, plus $1,500 for retrofitting)
[15] $189m (for copper initially) + $567m (for FTTP retrofit) = $756m
[16] 189,000 premises x $2,000 (being $1,500 for the additional cost of
FTTP, plus $500 for retrofitting)
[17] $189m (for copper with fibre ready infrastructure) + $378m (for FTTP
retrofit) = $567m
[18] 189,000 premises x $2,500 = $472.5m
[19] $472.5m (cost of FTTP) - $189m (cost of copper) = $283.5m
[20] This ignores the reality that consumers would also pay most if not all
of the cost of a copper connection through property, building, connection
and service charges. If it is assumed that consumers pay the estimated
$1,000 cost of a copper connection, the additional cost of FTTP would be an
estimated $1,500, which would be 0.4% of the cost of a $350,000 house and
land package.
[21] Fibre to the Home Council, 2009 Fibre Primer, p.18, available at
www.ftthcouncil.org (accessed 25 February 2010)
[22] The submissions are available at
http://www.dbcde.gov.au/broadband/national_broadband_network
/fibre_in_greenfield_estates/.