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2010 - 2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS LEGISLATION AMENDMENT
(FIBRE DEPLOYMENT) BILL 2011
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 2011
OUTLINE
The Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011 (the
Bill) amends the Telecommunications Act 1997 (the Act) to support the Government's
policy that fibre-to-the-premises (FTTP) infrastructure should be installed in new
developments.
It is similar to a Bill introduced in March 2010 which lapsed when the last Parliament
was dissolved. The new Bill, however, has a number of changes, particularly to reflect
the Government's decision that NBN Co Limited (NBN Co) should be the fibre
provider of last resort.
On 7 April 2009 the Australian Government announced its historic decision to
establish a new company, NBN Co, to build and operate a new superfast National
Broadband Network (NBN). The NBN has an objective of connecting up to 93 per
cent of all Australian homes, schools and workplaces with fibre based broadband
services and connecting other premises in Australia with next generation wireless and
satellite broadband services.
When the Government announced the NBN, it indicated it would progress legislative
changes to have FTTP infrastructure installed in new developments. The Government
considers it does not make sense to roll out a fibre network to up to 93 per cent of
premises, leaving new developments to be serviced by old telecommunications
technology.
The Government has undertaken an extensive consultation process in developing this
legislation, including releasing discussion papers and draft legislation, and forming a
broadly based stakeholder reference group.
The Government announced on 20 June 2010 that NBN Co would be the fibre
provider of last resort in new developments within its fibre footprint. As such it will
provide fibre where developers do not wish to use another provider and meet the cost
of trenching and passive infrastructure. The provision of passive infrastructure by
developers is in recognition of the considerable investment NBN Co will make in
providing fibre cabling and associated equipment.
Further details of the implementation of these arrangements were announced on
9 December 2010, when NBN Co's role was confirmed. Telstra will, however, have a
transitional role to provide services in infill developments of less than 100 premises
where NBN Co does not yet have fibre. The Government has also made it clear that
developers can use other telecommunications providers as they wish.
The Bill will add a new Part 20A to the Act to support the rollout of the NBN and
other superfast telecommunications networks. Proposed Part 20A of the Act is
intended to apply to all types of new developments, including broadacre estates, urban
infill and urban renewal projects. The rules will generally apply to new developments
in NBN Co's long term fibre footprint.
1
There are four key measures in proposed Part 20A.
First, the Bill enables the Minister to specify by legislative instrument new
developments or classes of new developments in which fixed lines that are installed
must be optical fibre lines and must comply with any other conditions specified
(Division 2). For convenience, this rule is known as the `optical fibre line
requirement'. While NBN Co's role as the fibre infrastructure provider of last resort
means fibre will ultimately be provided in new developments, this provides a
mechanism to ensure fibre is provided in the long term, if required.
Second, the Bill provides that when fixed-line facilities are being installed in a
development, these facilities must be fibre-ready (Subdivision A of Division 3). For
convenience, this rule is known as the `fibre-ready facility requirement'. This rule will
apply to the person installing the facilities, and if that person is a developer, whether
or not the developer is a constitutional corporation.
A fixed-line facility is an item of passive infrastructure such as underground ducting
or `pit and pipe' or poles used in the deployment of fixed telecommunications lines to
a premises. A `fibre-ready facility' is a fixed-line facility that is designed and installed
so that it allows the ready deployment of optical fibre cabling, noting such cabling has
special deployment requirements. These concepts are defined further in the Bill.
Third, the Bill prohibits constitutional corporations from selling or leasing land or
buildings situated in new developments unless fibre-ready facilities have been
installed (Subdivision B of Division 3). For convenience, this rule is known as the
`fibre-ready installation requirement'. The limitation of the `fibre-ready installation
requirement' to constitutional corporations reflects the application of the Australian
Government's constitutional powers over corporations.
If the fibre-ready installation requirement applies to a particular new development,
civil penalties will apply if a constitutional corporation (such as a developer that is a
constitutional corporation) sells or leases land or buildings and fibre-ready facilities
have not been installed. However, the sale or lease transaction will still be valid.
The Bill provides that in new developments where urban utilities are not being
installed, the fibre-ready facility requirement and the fibre-ready installation
requirement will not apply. The Bill also provides for NBN Co to provide a written
statement advising that neither it nor another NBN Corporation (e.g. NBN Tasmania)
will be deploying fibre in an area: that is, the area is outside the long term fibre
footprint of the NBN. The effect of such a statement is that it will relieve a person
(such as a developer) of the obligation to install fibre-ready infrastructure in a
development in that area (Subdivision C of Division 3).
The Bill also provides for the Minister to exempt by legislative instrument projects,
individual lots or units, or conduct that would otherwise be subject to the Bill
(Subdivision D of Division 3). For example, the Minister could exempt very small
infill redevelopments (e.g. knock-down, rebuilds) where it would not be reasonable to
require the replacement of the infrastructure in the street.
Fourth, the Bill provides for a regime for carriers to secure access to fixed-line
facilities (e.g. pit and pipe) that are owned by non-carriers, to ensure fibre can be
rolled out using these facilities (Division 4).
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Access to such fixed-line facilities would be on terms that are commercially
negotiated or, failing agreement, determined by an agreed arbitrator. Failing
agreement on an arbitrator, the Australian Competition and Consumer Commission
(ACCC) will be the default arbitrator. The regime is based on that applying to carrier
facilities in Part 5, Schedule 1 of the Act. The Bill also sets out provisions for the
ACCC to determine whether third party access is technically feasible and to make a
code setting out conditions for third party access. There is also provision for the
Minister to exempt fixed-line facilities from this access regime.
The Bill exempts developments from the rules regarding the installation of fibre-ready
facilities or fibre lines where, before the Bill comes into effect, contracts have been
signed or work has commenced on the installation of fixed-line facilities or lines, or
where civil works generally have been contracted or commenced (Division 5).
The Bill provides for a number of new definitions to support the operation of
Part 20A (Division 6). In relation to `real estate development projects', the Bill
enables subordinate legislation to refine the definition of this term, should it be
necessary, as well as to make definitions and technical amendments that support the
new measures and to address consequential matters.
The Bill also makes it clear that the proposed legislation does not intend to exclude or
limit the operation of state and territory laws that are capable of operating
concurrently with the proposed new Part 20A (proposed section 372ZB). As such, the
legislation can be complemented by changes to state, territory and local planning
arrangements under state or territory law, which would further support the
deployment of fibre-ready facilities or fibre.
The Bill also contains provisions to apply the civil penalties in the Act to breaches of
obligations under the new Part 20A.
In addition to inserting the new Part 20A, the Bill amends provisions in Part 21 of the
Act to enable the Australian Communications and Media Authority (ACMA) to make
technical standards for customer premises equipment and cabling for use with the
national broadband network and other superfast telecommunications networks (items
11-13). The ACMA will be able to exercise these powers on its own initiative or if
directed by the Minister. The amendments also make it clear that the Minister can
give the ACMA directions in relation to cabling provider rules.
Part 1 of Schedule 1 to the Bill will commence at the start of the day after the day the
Bill receives Royal Assent, or 1 July 2011, whichever occurs later in time. While the
introduction of arrangements to facilitate the deployment of optical fibre
infrastructure in new developments was flagged as early as April 2009 and the current
arrangements being implemented were announced in June 2010, this approach will
ensure affected parties have further advance notice of the requirements and remove
concerns about potential retrospective application. It has been the Government's
expectation, however, since the 20 June 2010 announcement that developers will have
recognised the need to install fibre-ready passive infrastructure to facilitate the rollout
of fibre in their developments and that it is a commercial matter for fibre providers as
to how to service these developments where this has not been done.
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FINANCIAL IMPACT STATEMENT
The financial impact on the Commonwealth is expected to be small and met from
NBN implementation funding.
4
REGULATION IMPACT STATEMENT
Measures to support the installation of fibre to the premises (FTTP) in new
developments and the Telecommunications Legislation Amendment (Fibre
Deployment) Bill 2011
1. Background
In April 2009 the government announced the establishment of NBN Co to roll out the
National Broadband Network. To complement this initiative, it foreshadowed
legislation to ensure that fibre to the premises was installed in all new developments.
At that time it was envisaged that developers would be required to install and pay for
fibre infrastructure.
After extensive consultation the government announced in June 2010 that NBN Co
would be the infrastructure provider of last resort in new developments. It would
provide fibre in new developments within its long term fibre footprint where
developers did not choose to use another provider and provided fibre-ready passive
infrastructure, generally trenching, conduits and access pits, or `pit and pipe'.
In December 2010 the government announced the detailed arrangements for the
implementation of this policy, including some transitional arrangements under which
Telstra would service infill developments of less than 100 premises pending NBN Co
rolling out a fibre presence. In the long run NBN Co will be provider of last resort in
all new developments within the fibre footprint. Separately, NBN Co has indicated
that it will negotiate with developers to transfer ownership of the infrastructure to
NBN Co under the contractual arrangements they enter into. It will not charge
developers for the installation of fibre.
The issue, then, is how to ensure, within this policy framework, that fibre is installed
most efficiently in new developments. Extensive consultations with the
telecommunications industry, state and territory and local governments, developers
and builders, and consumers of telecommunications services indicate that this requires
the provision of fibre-ready passive infrastructure at the development stage.
Developers may request other telecommunications providers to provide infrastructure
in their estate. In these cases, it is assumed that fibre will be installed at development
stage and the passive infrastructure will be designed for fibre, installed and used
immediately. Fibre-ready infrastructure is necessary when fibre is not installed
immediately. It is possible that NBN Co, as provider of last resort, may not be able to
service developments immediately.
In the past, telecommunications infrastructure was provided by Telstra. It installed the
copper network and provided the retail service, spreading the cost of the new
infrastructure over the whole network. Thus, from the point of view of developers, the
infrastructure was provided at little or no cost to the developer apart from the cost of
the shared trench. More recently, a number of providers including Telstra have
installed fibre networks on commercial terms, generally charging developers an
amount per premises passed which recovers a large proportion of the capital cost, and
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having ownership of the infrastructure transferred to them. They then maintain the
network and receive further revenue from retail providers on their network, or from
their own retail services on the network.
2. Identifying the problem
The problem to be addressed is how to ensure that fibre-ready passive infrastructure is
available to facilitate the rollout of fibre in new developments within the fibre
footprint, whether by a developer chosen provider or NBN Co as infrastructure
provider of last resort.
The provision of fibre-ready infrastructure entails a cost to developers. This cost is far
less than the later cost of retrofitting the infrastructure. It is efficient for it to be
installed at the development stage, when a utilities trench is already open.
Notwithstanding that it is efficient, the cost to developers, the fact that they will have
moved on before the cost of retrofitting becomes apparent, and the fact that
consumers do not know what is needed mean there is a possibility that government
intervention is required in order to ensure that fibre-ready infrastructure is available in
new developments.
There are around 150,000 new dwellings1 constructed each year. In addition, it is
estimated that there are around 60,0002 other premises such as commercial, industrial
and government premises constructed per annum. According to NBN Co3, 94 per cent
of these new premises (about 197,000) will be within the fibre footprint.
The cost of installing fibre-ready infrastructure has been estimated at about $800 per
lot or building unit, using information from a variety of industry sources. The cost of
retrofitting fibre where no passive infrastructure has been supplied has been estimated
at about $1300 a lot or unit more than installing it in fibre-ready infrastructure.
Most developers will install fibre-ready infrastructure as a matter of course. However,
there is a risk that some may not. If five per cent were to neglect to do so, the net cash
cost - to be borne by consumers or NBN Co - would be $12.8 million each year4.
3. Objectives of government action
The Government's ultimate objective is to have optic fibre installed throughout the
fibre footprint. Its immediate objective is to maximise the installation of fibre-ready
passive infrastructure in new developments:
� to facilitate the rollout of fibre in new developments
� to minimise risk, cost and inconvenience to the community, including to
NBN Co as infrastructure provider of last resort
1
National Housing Supply Council 2008 State of Supply Report, p.35
2
This figure is based on projections in the growth of serviceable addresses in future years.
3
NBN Co's Corporate Plan (p 45), available at www.nbnco.com.au
4
197,000 * 0.05 * $1300 = $12,805,000
6
� to compensate for an information asymmetry between developers and later
occupants.
4. Options that might achieve these objectives
Option 1: Rely on market mechanisms
It might be thought that the benefit of having fibre telecommunications available
would be sufficient to ensure that all parties would be prepared to incur costs of
various kinds in order to facilitate the rollout of such infrastructure.
In particular, it might be expected that fibre-ready infrastructure will always be
installed because the payoff in the medium term to a relatively minor investment is
large. That is, the benefit of the installation of fibre - potentially by NBN Co as fibre
provider of last resort - at no further cost far outweighs the cost of installing the pit
and pipe.
With full information, consumers could discount the value of the land in the
development for the cost and inconvenience of retrofitting fibre. Even with full
information, a consumer or group of consumers might choose not to have fibre-ready
infrastructure installed. In this case the saving to them would have to be offset against
later costs to others. This is discussed briefly in the `Impacts' section below.
Option 2: Use state and territory regulatory arrangements
It might be possible to rely on state and territory regulatory arrangements to ensure
that fibre-ready infrastructure is installed in new developments.
In particular, there may be scope for using state and territory planning arrangements
to require that fibre-ready infrastructure be installed in new developments. State and
territory inclusion of a requirement for fibre-ready infrastructure in planning
arrangements would be valuable because developers will have the main responsibility
for installation, and they are accustomed to dealing with planning bodies. This would
assist in communication with developers.
Option 3: Legislation
A third option is to legislate to in effect require developers to install fibre-ready
infrastructure. This would require amendments to the Telecommunications Act 1997.
Constitutional limitations mean that the requirement would be imposed under the
corporations power. Under the telecommunications power, it would be possible
further to require that any fixed-line infrastructure being installed was fibre-ready, and
this would bind developers who are not corporations where they install such
infrastructure. The risk would remain, however, that a developer might choose not to
install any such infrastructure. A variant of the legislative option requiring some
developers to install fibre to the premises, not just fibre-ready infrastructure, was
explored. After consultation with stakeholders, this option was rejected on the basis of
cost and practicality.
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5. Impact analysis
This impact analysis assesses the three options against these criteria:
� their contribution to the efficient provision of fibre in new developments, in
particular by ensuring that fibre-ready infrastructure is installed
� the cost to developers
� the degree to which they compensate for the information asymmetry between
developers and later occupants
� the degree to which they reduce risk, cost and inconvenience to
telecommunications providers, especially NBN Co as the infrastructure
provider of last resort
� the degree to which they reduce risk, cost and inconvenience to the
community.
The main groups affected are:
� developers and builders
� network builders, especially NBN Co as provider of last resort
� eventual occupants of premises - households and businesses
� state, territory and local government planning authorities.
A table summarising impacts on stakeholders is attached.
Costs and benefits
The cost of installing fibre-ready telecommunications infrastructure at the
development stage is estimated at approximately $800 on average per lot. This figure
is based on information supplied by industry. It includes trenching, materials -
conduit and pits - and installation.
Installation at the development stage is much cheaper than installation for existing
premises, because there is already an open trench for water, sewerage, and electricity
in the new development. By contrast, retrofitting involves new excavation and making
good. The difference has been estimated at $1300 per block passed.
As well as the cash difference in cost, retrofitting entails potentially large additional
costs in inconvenience and damage in the form of gardens and driveways dug up, the
possibility of damage to existing utilities when the telecommunications infrastructure
is installed, and the presence of machinery and noise in an occupied area. There is a
risk of extra delays as fibre is installed in areas which already have other utilities
infrastructure.
Installation of passive infrastructure will entail some administrative costs. Generally it
will involve a developer making contact with NBN Co5 and getting some assistance in
finding designers and construction firms to design and install the infrastructure, with
NBN Co checking that the result is satisfactory. Retrofitting, too, will entail these
5
It is assumed here that developers wishing to use other providers will install fibre at development
stage and so will be unaffected by the fibre-ready provisions.
8
costs. In addition, transaction costs will be higher for retrofitting as households and
businesses will need to be dealt with individually, and there will need to be co-
ordination with other utilities.
Under all options, the cost of installing passive infrastructure at development stage is
likely to be the same per lot, whatever the motivation for installing it. The main cost
difference will be the extent to which it is installed relative to the total number of
premises.
Impact of Option 1: reliance on contractual and market mechanisms
Under all three options, most developers will install passive infrastructure, probably
under a contract with NBN Co, who will then install fibre.
However, developers do not directly benefit from the provision of fibre-ready
infrastructure. The occupants of premises later built in the development will benefit -
though the lots may be more saleable and attract a higher price to the extent that
builders or buyers are well enough informed to take it into account. Conversely,
developers do not pay the cost of later retrofitting. By the time it happens, they have
finished with the development and moved on. After the premises are built and
occupied, the occupants may be left with the expense and trouble of retrofitting.
Developers do not necessarily have a direct incentive to install fibre-ready passive
infrastructure.
Thus there is a mismatch between who pays and who benefits. There is, therefore, a
possibility that fibre-ready infrastructure will not be installed in the absence of
intervention. Contact the Department of Broadband, Communications and the Digital
Economy has had with developers in recent years suggests that this possibility is not
merely theoretical. It is not possible to know how many would not, but if it were
assumed that 5 per cent of lots were not made fibre-ready, the cost has been estimated
at $12.8 million a year (see p 2).
Many consumers (including builders who might purchase several lots from a
developer) may be well enough informed to avoid blocks without infrastructure. But
such information is not readily available, and efforts to devise a mechanism for
collecting and disseminating it suggest that it is likely to be costly and not likely to be
effective. In any case, even a modest scheme would have to rely on legislation to
work.
Further, in the early stages of implementation of the policy there will be a transition
period where fibre may not be installed immediately in new developments, perhaps
because the fibre network is scheduled to be rolled out in the area in a relatively short
time. Then there might not be an immediate contract between a fibre provider and the
developer, and developers may not realise the consequences of not putting in fibre-
ready infrastructure.
Obviously, developers who do not install passive infrastructure do not incur the cost.
In that sense, there would be a saving from not acting.
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However, there would be later costs to consumers and/or the future provider, probably
ultimately NBN Co, when passive infrastructure has to be retrofitted, as described
above.
There would not be commensurate savings in administrative costs in general from the
premises not served with infrastructure, because of the fragmentation of the
mechanisms. There may even be further administrative costs for developers who do
not install infrastructure because they will have to co-ordinate work in a more
complex environment.
In the absence of any compulsion to install fibre-ready infrastructure, there is a
transaction cost for consumers, who (if they are well enough informed to do so) will
have to find out whether a block has infrastructure or not. There is likely to be an
inequitable outcome in the sense that land and housing prices tend to equalise in a
particular area and, because of incomplete information, consumers may pay as much
for a block without infrastructure as they would have paid if it had infrastructure. That
is, developers will pass on the cost of fibre-ready infrastructure, but those who do not
install it will be able to pocket the savings.
To the extent that this information failure occurs, it could give developers who do not
install infrastructure a spurious competitive advantage
Impact of Option 2: Using state and territory regulatory arrangements
In some state, territory and local planning arrangements telecommunications is treated
like any other urban utility, routinely installed along with water, sewerage and
electricity. Sign-off of telecommunications is required for planning approval.
However, these arrangements vary and it does not appear possible to use planning
arrangements to ensure complete coverage of a requirement for fibre-ready
infrastructure. This is because some planning systems do not actually have a
requirement in the planning approval processes for other utilities and because some
planning systems do not require planning approval for a significant proportion of
developments.
So there would still be a risk of some developers not installing fibre-ready
infrastructure, with costs as detailed above.
Further, after extended discussions it has not been possible to reach agreement with
the states and territories on legislation. This is partly because planning arrangements
vary from state to state and so it is difficult to devise a consistent scheme or one that
would bring about consistent outcomes. Besides, while local planning arrangements
routinely provide for other utilities, this is partly because states and territories have
traditionally regulated them. Telecommunications, on the other hand, has always been
a responsibility of the Commonwealth, and many local governments are unable or
unwilling to supervise their installation. Finally, relying on state and territory
legislation entails a risk of inconsistent standards and specifications. This is less a
concern for, say, water or sewerage than it is for telecommunications which is
generally provided on a national basis and standardised installation is desirable.
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There might possibly be some costs to local planning authorities in checking the
installation of infrastructure if it were required under their planning arrangements,
although it appears that these could be minimised under the kinds of sign-off
processes fibre providers would use.
State and territory inclusion of a requirement for fibre-ready infrastructure in planning
arrangements could reduce transaction costs for developers because they are
accustomed to dealing with planning departments, and routinely look there for
information. Dealing with telecommunications along with other utilities would be
administratively simple and so reduce administration costs.
Impact of Option 3: Legislation
It is likely that most developers will install fibre-ready infrastructure because there are
incentives to do so. The payoff, in terms of a fibre connection, is much greater than
the cost.
So the immediate cost of the legislation would be to those developers who would not
have installed fibre-ready infrastructure, who will now be faced with an outlay of
$800 a lot.
This would be more than balanced by the later savings to occupants and/or
infrastructure providers, who would otherwise have had to pay for retrofitting - both
the cash cost and the inconvenience.
The certainty given by legislation would reduce administrative and transaction costs,
possibly for developers, and certainly for planning authorities, infrastructure providers
and consumers.
Because it would address the information asymmetry - consumers would now know
that all new developments had fibre-ready infrastructure installed - this option would
create a level playing field among developers.
It is not possible to say with any certainty how large the benefits of the legislation
would be. If 5 per cent of developments which would not otherwise have installed
fibre-ready infrastructure now did so, the cash saving in retrofitting costs, at $1300 a
lot, is estimated at $12.8 million a year (see p 2). In addition, there would be savings
in terms of inconvenience and disruption caused by retrofitting, as well as the other
benefits mentioned above.
6. Consultation
There has been an extensive consultation process in relation to the implementation of
the Government's fibre in new developments policy. As it is the stated policy goal to
maximise the installation of fibre in new developments, this consultation has focussed
on the most appropriate mechanism to make this happen, balancing all of the relevant
considerations.
11
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 paper6.
In light of these consultations, a Fibre in New Developments Stakeholder Reference
Group, comprising representatives of the affected groups, was established to provide
views on implementation issues and to help disseminate information.
The Government's announcement in June 2010 that NBN Co would be the
infrastructure provider of last resort in new developments, and that developers would
be responsible for the cost of pit and pipe, was generally welcomed by stakeholders.
So, too was the announcement in December of the detailed arrangements for
implementing the policy, including the foreshadowing of legislation to require
developers to install fibre-ready passive infrastructure.
In terms of the form a legislative approach should take, although there were some
differences about the details, the Stakeholder Reference Group generally endorsed an
approach along the lines of Option 3, legislation to require installation of fibre-ready
passive infrastructure. Developers have some reservations about paying for the
installation of fibre-ready infrastructure but appreciate that it is worthwhile in order to
get fibre installed. State and territory and local governments support the idea of
legislation provided they are not put in a position of enforcing a Commonwealth
requirement. Infrastructure providers and telecommunications consumer groups
strongly support such legislation.
7. Conclusion
Legislation to require developers to install fibre-ready passive infrastructure would
impose little additional cost while providing considerable benefits for most
developers, because they would install the infrastructure anyway. It would create a
large benefit for some households and businesses and/or for future providers,
especially NBN Co as provider of last resort, though it is impossible to say how large
because it is not known how many developers, in the absence of the legislation, would
fail to install the infrastructure.
The certainty and uniformity presented by legislation are likely to create savings in
transaction and administrative costs for developers, consumers, future providers
including NBN Co and state and territory planning authorities.
Legislation to require developers to install fibre-ready passive infrastructure
(Option 3) is therefore the preferred option.
If possible, it would be useful to supplement Commonwealth legislation with changes
to state and territory planning arrangements. These would capture non-corporations,
who are outside the Commonwealth power. Further, as discussed above,
telecommunications infrastructure is logically and conveniently dealt with in the
6
The submissions are available at http://www.dbcde.gov.au/broadband/national_broadband_network
/fibre_in_greenfield_estates/.
12
context of planning for all urban utilities. There would be advantages in terms of
income dissemination and convenience, especially to developers but also to local
planning authorities.
Thus the policy conclusion is a combination of Options 2 and 3.
Option 1 is not preferred because of the risk, albeit small, that it may result in fibre-
ready passive infrastructure not being installed, leading to a significant cost impact.
8. Implementation and review
The proposed bill in effect requires developers who are constitutional corporations to
install fibre-ready infrastructure in new developments. It works by placing penalties
on the sale or lease of land unless the infrastructure is installed.
The bill applies only to projects where at least one other urban utility is installed.
Within that, the requirement affects only projects that are in the long term fibre
footprint. The bill provides for NBN Co to issue a statement saying that a real estate
development project is not in the long term fibre footprint. NBN Co will publish such
statements on its website.
The bill also requires that fixed line telecommunications infrastructure that is installed
within the long term fibre footprint must be fibre-ready. This requirement applies to
corporations and non-corporations.
The Commonwealth will continue to work with states and territories on
complementary measures to facilitate the installation of fibre-ready infrastructure in
new developments.
Once the legislation is passed the main action that will be required is a public
awareness campaign to inform developers of their responsibilities and to inform
buyers of land or premises of what to look for.
Where enforcement action is required, it would be initiated by an aggrieved party -
probably a buyer or an infrastructure provider such as NBN Co, but possibly another
body such as a local government - lodging a complaint with the Australian
Communications and Media Authority. The Authority would then take action (if
warranted) against the developer. Civil penalties under the Telecommunications Act
would apply.
The legislation will be reviewed in five years' time. The review will be undertaken in
consultation with carriers including NBN Co, developers, consumer groups, and state
and territory planning bodies. It will assess whether a continuation of the legislation is
required.
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Attachment
Summary of Impacts on Stakeholders
Who is affected Option 1: Rely on market Option 2: State and territory Option 3: Legislation
regulation
Infrastructure providers � Incomplete coverage means later � Coverage better than Option 1, but � High level of coverage minimises
retrofitting costs still incomplete so some retrofitting retrofitting
� Uncertainty � May be inconsistent standards and � Certainty of coverage
specifications � Consistency of arrangements
Developers and builders � Most will install fibre-ready � A smaller number who do not install � All developers who are corporations
infrastructure fibre save the cost, to the extent that will install fibre-ready infrastructure
� Those who do not install consumers do not realise the lack � Cost will be recouped in value of
infrastructure save the cost, to the � Administrative and transaction costs land
extent that consumers do not realise reduced by incorporation in planning � Administrative and transaction costs
the lack system reduced by certainty
Occupants of premises � Where infrastructure is not installed, � Coverage better than Option 1, but � Fibre easily installed later
costly and inconvenient retrofitting still incomplete so some retrofitting � Lower total installation cost
� Transaction costs for all in finding � Transaction costs for all in finding � Saving in transaction costs
out whether lot has infrastructure out whether lot has infrastructure
State and Territory governments As now, some will include fibre-ready � Need to ensure uniform coverage of Little direct effect but provides certainty
infrastructure in planning requirements legislation or other arrangements and a framework for planning
� Possible need for additional arrangements.
resources
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ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum:
ACCC: Australian Competition and Consumer
Commission
Access Arrangements Bill: Telecommunications Legislation Amendment
(National Broadband Network Measures--
Access Arrangements) Bill 2011
ACMA: Australian Communications and Media
Authority
ACMA Act: Australian Communications and Media
Authority Act 2005
Act: Telecommunications Act 1997
AIA: Acts Interpretation Act 1901
Bill: Telecommunications Legislation Amendment
(Fibre Deployment) Bill 2011
CCA: Competition and Consumer Act 2010
Companies Bill: National Broadband Network Companies Bill
2011
FTTP: Fibre-to-the-premises
LIA: Legislative Instruments Act 2003
Minister: Minister for Broadband, Communications and
the Digital Economy
NBN: national broadband network
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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 2011.
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) will commence on the day on which the Bill receives the Royal
Assent.
Part 1 of Schedule 1 to the Bill will commence at the start of the day after the Bill
receives the Royal Assent, or 1 July 2011, whichever occurs later in time. This
commencement timeframe is designed to ensure that industry will have sufficient
further notice of the proposed new obligations and removes concerns about potential
retrospective application. If the Bill has not yet commenced on 1 July 2011, Part 1 of
Schedule 1 to the Bill will apply the day after the Bill receives the Royal Assent.
Part 2 of Schedule 1 to the Bill will commence either immediately after the
commencement of Part 1 of Schedule 1 to the Bill or immediately after the
commencement of Part 1 of Schedule 1 to the Telecommunications Legislation
Amendment (National Broadband Network Measures--Access Arrangements) Act
2011, whichever occurs later in time. Item 16, Part 2 of Schedule 1 to the Bill
proposes to repeal the definition of `optical fibre lines' from proposed section 372ZC,
and the definition of `NBN corporation' from proposed section 372ZE respectively.
The reason for this is that the Access Arrangements Bill contains an identical
definition of `optical fibre lines' and `NBN corporation' to this Bill. Therefore if the
Access Arrangements Bill is enacted, the definitions of `optical fibre lines' and `NBN
corporation', as contained in the Bill, are not required.
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 that will amend the Act.
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Schedule 1 -- Amendments
Part 1 -- General amendments
Part 1 of Schedule 1 of the Bill makes a number of amendments to the Act to support
the deployment of optical fibre and optical fibre-ready passive telecommunications
infrastructure in specified real estate development projects.
Telecommunications Act 1997
Item 1 - Section 7
Item 1 inserts a definition of `building lot' in section 7 by reference to the meaning
given by proposed section 372Q. The definition of `building lot' is discussed in the
explanatory note for proposed section 372Q.
Item 2 - Section 7
Item 2 inserts a definition of `building unit' in section 7 by reference to the meaning
given by proposed section 372S. The definition of `building unit' is discussed in the
explanatory note for proposed section 372S.
Item 3 - Section 7
Item 3 inserts a definition of `fibre-ready facility' in section 7 by reference to the
meaning given by proposed section 372W. The definition of `fibre-ready facility' is
discussed in the explanatory note for proposed section 372W.
Item 4 - Section 7
Item 4 inserts a definition of `fixed-line facility' in section 7 by reference to the
meaning given by proposed section 372V. The definition of `fixed-line facility' is
discussed in the explanatory note for proposed section 372V.
Item 5 - Section 7
Item 5 inserts a definition of `project area' in section 7 by reference to the meaning
given by proposed section 372Q. The definition of `project area' is discussed in the
explanatory note for proposed section 372Q.
Item 6 - Section 7
Item 6 inserts a definition of `real estate development project' in section 7 by
reference to the meaning given by proposed section 372Q. The definition of `real
estate development project' is discussed in the explanatory note for proposed
section 372Q.
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Item 7 - Section 7
Item 7 inserts 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 372T and 372U respectively. The definition of `sell' is discussed in the
explanatory notes for proposed sections 372T and 372U.
Item 8 - Section 7
Item 8 inserts a definition of `subdivision' in section 7 by reference to proposed
section 372R. The definition of `subdivision' is discussed in the explanatory note for
proposed section 372R.
Item 9 - Subsections 22(1) and (4)
Subsection 22(1) provides that for the purposes of sections 20, 21 and 30 of the Act,
`the boundary of a telecommunications network' is to be ascertained in accordance
with the regulations.
Subsection 22(4) provides for a default definition of `the boundary of a
telecommunications network' if there are no regulations in place for the purposes of
sections 20, 21 and 30 of the Act.
Item 9 makes a consequential amendment to subsections 22(1) and (4), by adding
references to proposed subsections 372B, 372C and 372V, which use the definition of
the boundary of a telecommunications network.
Item 10 - After Part 20
Item 10 inserts proposed Part 20A into the Act. Proposed Division 2 of Part 20A
contains provisions relating to the deployment of optical fibre 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 (referred to henceforth as `the
optical fibre line requirement').
Proposed Subdivision A of Division 3 of Part 20A also contains provisions relating to
the installation of fibre-ready facilities in the project areas of specified real estate
development projects (referred to henceforth as `the fibre-ready facility
requirement').
Proposed Subdivision B of Division 3 of Part 20A imposes a restriction on the sale or
lease of specified building lots and building units by constitutional corporations
unless fibre-ready facilities are installed (referred to henceforth as `the fibre-ready
installation requirement').
Proposed Subdivision C of Division 3 of Part 20A provides that NBN Co may issue
statements about the non-installation of optical fibre lines.
Proposed Subdivision D of Division 3 of Part 20A provides for exemptions.
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A third party access regime for fixed-line facilities is set out in proposed Division 4 of
Part 20A.
Proposed Division 5 of Part 20A provides for exemptions for pending projects.
Proposed Division 6 of Part 20A provides for miscellaneous rules, including defining
terms used throughout Part 20A.
Proposed Part 20A -- Deployment of optical fibre etc.
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 lines
Proposed Division 2 of Part 20A provides for the deployment of optical fibre lines to
specified building lots and building units.
Proposed section 372B - Deployment of optical fibre lines to building lots
Proposed section 372B sets out the general rule that where telecommunications lines
(i.e. lines for the purpose of providing carriage services) 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 identify when fixed lines in specified new
development projects are required to be optical fibre (including any conditions
specified in a Ministerial instrument which are to be met). That is, the rule preventing
the installation of lines that are not optical fibre only applies to particular lines that
meet the specified criteria. Each criterion is described more fully 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 infill developments where an existing block of land is
subdivided, or multiple contiguous existing blocks of land are subdivided, before
redevelopment.
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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 be conferred with a broad
discretion as to how real estate development projects are specified or identified. For
example, the Minister may 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 lots, or estimated cost of providing FTTP
infrastructure in a real estate development project.
Proposed paragraph 372B(1)(c) provides that the rule in proposed subsection 372B(2)
applies only to lines that have a particular intended use, namely, where the line is
wholly or primarily used or for use to supply carriage services to end-users or
prospective end-users in building units. This is to make it clear that the rule is directed
at the provision of fibre lines to premises occupied by end-users, not to other
facilities, for example, mobile base stations or monitoring equipment. In the case of
such facilities, it is intended that the party operating the facility can choose the type of
line used to connect the facility.
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 cumulative 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 (e.g. telephone, computer,
wireless router etc). There may be customer cabling (see section 20 of the Act)
between the customer equipment and the line in question. (Note, 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 proposed 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 or monitoring equipment. 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, because the line is not connected to the building unit in
which the end-users are located.
Proposed paragraph 372B(1)(e) provides that the prohibition on installation of
non-fibre lines in 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
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is a line that connects a telephone or a computer to equipment like an optical network
terminal connecting the home to the fibre network.
The prohibition on installation of non-fibre lines in specified developments does not
apply to private networks. The optical fibre line requirement does not apply unless a
line is actually installed, and such a line is used (or intended for use) to supply a
carriage service to the public (proposed paragraph 372B(1)(f)). Proposed
section 372ZA provides an explanation of `supply to the public' for the purposes of
proposed Part 20A. 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 intended only for private use.
The rule in proposed subsection 372B(2) will apply only to lines installed after the
commencement of proposed section 372B (proposed paragraph 372B(1)(g)). This is
to clarify that the optical fibre line requirement does not apply retrospectively.
Proposed subsection 372B(2) provides that, where the criteria specified in 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 telecommunications lines are deployed, optical fibre
(rather than copper or other non-fibre fixed line) is used throughout the development:
i.e. 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 (e.g. appropriate standards).
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 provides that legislative instruments made under the Act
(including potentially a legislative instrument made under proposed
subsection 372B(4)), can make provision in relation to a matter or matters by adopting
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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, if necessary, by a particular
carrier (e.g. an NBN corporation), 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 character. For example,
the capacity to provide higher data speeds may be required for 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 (referred to henceforth as the NBN). This would provide
guidance to infrastructure providers and assurance to developers, property buyers,
local councils and others that appropriate FTTP 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) provides that a legislative instrument made by the
Minister under proposed paragraph 372B(1)(b) 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). As a
further example, such an instrument may empower the ACMA to make decisions
about individual real estate development projects that are subject to the rule in
proposed subsection 372B(2).
Proposed subsection 372B(6) contains ancillary contravention provisions.
Proposed subsection 372B(7) provides that proposed subsections 372B(2) and (6) are
civil penalty provisions. This means if a person contravened subsection 372B(2) or
372B(6)--for instance 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.
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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. 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.
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 identify when fixed lines in specified new
development projects of this type 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 criteria described 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 372S, 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-premises leasehold or freehold
buildings such as shopping centres. The construction of a building unit on a vacant
lot, or a `knock-down and rebuild' project could potentially fall under proposed
paragraph 372C(1)(a).
Proposed paragraph 372C(1)(b) provides that the rules in proposed section 372C
apply only 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 could make an instrument specifying real estate development projects by
reference to the name, area, location, date of planning approval, proximity to existing
infrastructure, number of premises, or estimated cost of providing FTTP infrastructure
in a real estate development project, or by exclusion.
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
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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
in 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 (e.g. appropriate standards).
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(5) to (7) mirror the provisions in proposed
subsections 372B(5) to (7); 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).
Proposed section 372D - Exemptions--Ministerial instrument
Proposed subsection 372D relates to exemptions from the optical fibre line
requirement in sections 372B and 372C respectively.
Subsection 372D(1) allows the Minister to exempt conduct specified in, or ascertained
in accordance with, a legislative instrument from the scope of either or both of
proposed subsections 372B(2) and 372C(2). Proposed subsection 372D(2) confirms
that an exemption under proposed subsection 372B(1) may be unconditional or
subject to such conditions (if any) as are specified in the exemption.
For example, subsections 372D(1) and (2) could allow the Minister to exempt from
the scope of subsections 372C(2), the installation of copper lines to building units in a
project area within a real estate development project, and such an exemption could be
conditional or unconditional.
Proposed subsection 372D(3) provides that a legislative instrument made by the
Minister under proposed subsections 372D(1) may confer functions or powers on the
ACMA. The purpose of this provision is to enable the Minister to provide the ACMA
(if necessary) with a decision making role in determining whether or not conduct is
exempt from the rule in proposed subsections 372B(2) and/or 372C(2) respectively.
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For instance, if such an instrument provides an exemption where particular equipment
requires a copper line, the ACMA could be required to certify this.
Proposed Division 3 -- Installation of fibre-ready facilities
Proposed Subdivision A - Installation obligations
Proposed Subdivision A of 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 facility requirement is intended to ensure that where passive
telecommunications infrastructure is installed at the time of the subdivision and/or
construction it is fibre-ready, so that a carrier (e.g. an NBN corporation) will be able
to install optical fibre lines at a later date quickly, at lower cost and with minimum
inconvenience to the community. As outlined above, proposed section 372W defines
what is a fibre-ready facility. The requirement could apply to any type of passive
infrastructure, depending on the content of a legislative instrument made under
proposed section 372W. 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.
Where a real estate development project is subject to the fibre-ready facility
requirement under proposed Subdivision A of Division 3 and not the optical fibre line
requirement under proposed Division 2, there is nothing to prevent a developer from
deploying optical fibre lines in that project, so long as those lines comply with all
applicable industry codes and/or standards.
Some key concepts used in proposed Division 2 and proposed sections 372E and
372F of Division 3 are the same; however there are also significant differences.
Proposed section 372E - Installation of fibre-ready facilities--building lots
Proposed section 372E sets out the general rule that where fixed-line facilities are
installed in a real estate development project that involve the subdivision of land,
those facilities must be fibre-ready facilities and satisfy any relevant conditions
specified in a ministerial instrument (i.e. `the fibre-ready facility requirement').
Proposed subsection 372E(1) limits the operation of proposed section 372E by
providing that the rule in proposed subsection 372E(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 in paragraphs 372E(1)(a), (b) and (c) are satisfied.
Those criteria are:
� the project involves the subdivision of one or more areas of land into building
lots (proposed paragraph 372E(1)(a)); and
� the installation occurs after the commencement of proposed section 372E
(proposed paragraph 372E(1)(b)); and
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� sewerage services, electricity or water, is, are, or will be supplied to those lots
(proposed paragraph 372E(1)(c)).
The criteria that are set out in proposed paragraphs 372E(1)(a) and (b) are almost
identical to the criteria set out in proposed paragraphs 372B(1)(a) and (g)
respectively.
Proposed paragraph 372E(1)(c) limits the application of the rule in proposed
subsection 372E(2) to projects where sewerage services, electricity or water is, or are
supplied to those building lots. The purpose of this provision is to target the
fibre-ready facility requirement to project areas where one or more basic utilities is
supplied. It is possible, however, that some project areas in which one or more of the
specified utilities are supplied may nevertheless be outside the expected long-term
optical fibre line coverage (`the long term fibre footprint') of the NBN. Proposed
section 372J therefore gives NBN Co the ability to issue a statement that it does not
intend to provide fibre in a particular locality and if it issues such a statement, this
would make the rule in proposed subsection 372E(2) inapplicable (see proposed
subsection 372E(3)).
The corollary of the criterion in proposed paragraph 372E(1)(c) is that building lots in
project areas that are not supplied with any of the specified utilities will not be subject
to the fibre-ready facility requirement in proposed section 372E (e.g. in very remote
parts of Australia). Rather, it is envisaged that real estate development projects which
are not supplied with one or more of the specified utilities will not be required to have
fibre-ready infrastructure installed, and that a connection to the NBN will be by either
wireless or satellite.
Proposed section 372Z provides for the definition of `supply' of these basic utilities to
projects for the purposes of proposed Part 20A. See the explanatory notes for
proposed section 372Z for an explanation of those definitions.
Proposed subsection 372E(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:
� the facility is a `fibre-ready facility' (proposed paragraph 372E(2)(a)); and
� any conditions specified in a Ministerial instrument under proposed
subsection 372E(4) are satisfied (proposed paragraph 372E(2)(b)).
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 372E(2)(b) and proposed subsection 372E(4)) in relation to the
fibre-ready facility. 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 (e.g. appropriate standards).
Examples of possible conditions for fixed-line facilities that could be specified in a
legislative instrument by the Minister under proposed paragraph 372E(2)(b) include
the design of the passive network (e.g. the location of ducting, plinths and pits and the
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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). It is envisaged, and considered preferable, for these matters to be
addressed in industry codes and/or technical specifications determined by the
industry. However, in the absence of codes or standards determined by an industry
body, the Minister could use this power to specify relevant requirements, including
potentially by reference to the specifications of a particular carrier (e.g. an NBN
corporation). The intention would be to ensure that the fibre-ready facilities that are
installed in these developments will permit fibre to be installed at a later time in a
quick and efficient manner, at lower cost and with minimum inconvenience to the
community.
The Minister could also make an instrument under proposed paragraph 372W(b)
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. an NBN corporation)--see section 589 of the Act, described in
detail in the explanatory note for proposed section 372B above.
Proposed subsection 372E(3) provides that the fibre-ready facility requirement
expressed in proposed subsection 372E(2) does not apply if NBN Co has issued a
statement under proposed section 372J stating that neither it nor any other NBN
corporation has installed, is installing, or proposes to install, optical fibre lines in the
project area, or any of the project areas, for the project. The purpose of this provision
is to provide a mechanism by which to confirm that a person is not subject to the
fibre-ready facility requirement because at that point in time the project is not in a
locality that is expected to be part of NBN Co's long term fibre footprint. Nothing
prevents a person installing fibre-ready facilities if NBN Co has issued a statement
under proposed section 372J. See the explanatory notes for proposed section 372J for
an explanation of the issuance of statements by NBN Co.
Proposed subsection 372E(5) contains ancillary contravention provisions.
Proposed subsection 372E(6) provides that proposed subsections 372E(2) and (5) are
civil penalty provisions. Proposed subsection 372E(6) mirrors proposed
subsection 372B(7).
Proposed section 372F - Installation of fibre-ready facilities--building units
Proposed section 372F largely mirrors proposed section 372E, in that it sets out the
fibre-ready facility requirement that where fixed-line facilities are installed in
specified real estate development projects that involve the construction of one or more
building units, rather than subdivision projects expressed in proposed paragraph 372E,
those facilities must be fibre-ready.
Proposed paragraph 372F(1)(a) limits the operation of proposed section 372F in part,
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 that
involves the construction of one or more building units on one or more areas of land.
27
Proposed paragraph 372F(1)(a) is substantially similar to proposed
paragraph 372C(1)(a).
Proposed paragraph 372F(1)(b) is substantially similar to proposed
paragraph 372C(1)(f), except that it relates to building units.
Proposed paragraph 372F(1)(c) mirrors proposed paragraph 372E(1)(c). See the
explanatory notes for proposed sections 372C and 372E for an explanation of those
rules.
Proposed subsection 372F(2) to (6) largely mirror proposed subsections 372E(2) to
(6) respectively. The material difference is that proposed section 372F refers to
construction projects, while proposed section 372E refers to subdivision projects.
Proposed Subdivision B - Sale of building lots and building units
Proposed Subdivision B of Part 20A applies to constitutional corporations which
propose to sell or lease building lots and building units. Unlike proposed
Subdivision A (which provides that where fixed-line facilities are installed, they must
be fibre-ready facilities), this Subdivision sets out the fibre-ready installation
requirement which is intended to encourage developers to install fibre-ready facilities
in their developments. In effect the limitation on sale or lease requirement requires the
installation of fibre-ready facilities as a precondition to sale or lease of the specified
developments. If a sale or lease proceeds without fibre-ready facilities being installed,
the transaction would not be invalid but civil penalties could be sought.
The objective of this Subdivision is to ensure that fibre-ready facilities are installed in
new developments so as to enable subsequent fibre rollout to occur quickly, more
economically and with less disruption than a full retrofitting.
Constitutional corporations are targeted in reliance on the constitutional corporations
power. A corporation for this purpose includes a proprietary company (often indicated
by `Pty Ltd' at the end of the organisation's name), a not-for-profit association
incorporated under State or Territory incorporated associations legislation (usually
indicated by `Inc' at the end of the organisation's name) and a statutory authority
incorporated under special legislation.
The general rule is that constitutional corporations will not be permitted to sell or
lease those lots or units in the particular project area, unless there are fibre-ready
facilities installed within or in proximity to the lots or units.
The prohibition does not apply if:
� there is an exemption arising either from:
o a legislative instrument made by the Minister under proposed
section 372K; or
o a contract for the installation of lines or fixed-line facilities being in
place, or the installation of lines or fixed-line facilities having
commenced, or civil works otherwise having commenced in a
development as provided for under proposed section 372P; or
28
� a statement has been issued by NBN Co under proposed section 372J (see the
commentary below) in respect of the particular project.
The Bill does not prohibit or otherwise restrict the `off-the-plan' sale or lease of lots
and/or units. This is because, generally, when consumers buy undeveloped blocks of
lands from developers, the transfer of the property title (generally) is effected only
once the basic utilities are installed. The rationale behind this industry practice is
twofold: namely, many state laws and council by-laws insist that the civil works for
basic utilities must occur before the title of land passes, and secondly, as a consumer
safeguard.
Proposed section 372G relates to the sale or lease of building lots or building units
involving the subdivision of land. Proposed section 372H relates to the sale or lease of
other projects.
Proposed section 372G - Sale of building lots and building units--subdivisions
Proposed section 372G provides the fibre-ready installation requirement with respect
to subdivision projects.
Proposed subsection 372G(1) sets out each of the criteria for the application of the
rules in proposed section 372G.
Proposed paragraph 372G(1)(a) is substantially similar to proposed
paragraph 372B(1)(a) with both relating to subdivisions.
The purpose of proposed paragraph 372G(1)(b) is to make it clear that proposed
section 372G applies to projects where there is, is to be, or it would be reasonable to
expect that one or more building units would be constructed and made available for
sale or lease. For example, if a large area of land was subdivided into lots for the
purpose of constructing multiple dwellings for sale, paragraph 372G(1)(b) would be
satisfied. Proposed sections 372T and 372U provide an explanation of when a
building lot or building unit respectively is made available for `sale'.
Proposed paragraphs 372G(1)(c) and (d) make it clear with respect to building lots
and/or units that the requirement to install fibre-ready facilities is targeted at projects
where it is expected that optical fibre lines will eventually be deployed by reference to
the availability and supply of other basic utilities as described in proposed
section 372Z.
Proposed subsection 372G(2) provides the general rule that a constitutional
corporation must not, in the course of carrying out, or carrying out an element of, the
project sell or lease the building lot unless a fibre-ready facility is installed in
proximity to the building lot. The purpose of this fibre-ready installation requirement
is to encourage constitutional corporations who subdivide land to install appropriate
passive infrastructure in the subdivided lots, so that optical fibre lines can be installed
later easily and cheaply.
29
Proposed subsection 372G(3) mirrors proposed subsection 372E(3). Proposed
subsections 372G(4) and (5) largely mirror proposed subsections 372G(2) and (3),
except that the rules apply in circumstances specified in subparagraph 372G(1)(b)(ii).
Proposed subsection 372G(6) provides ancillary contravention provisions. A
contravention of subsections 372G(2), (4) or (6) is a civil penalty provision under
proposed subsection 372G(7). For a detailed explanation of the civil penalty
provisions, see the explanatory notes for proposed section 372B.
Proposed subsection 372G(8) is to provide an abundance of caution and clarify that a
contravention of the rules in proposed subsection 372G(2) and/or subsection 372G(4)
does not affect the validity of any transaction. In other words, if a person contravenes
proposed subsection 372G(2) and/or subsection 372G(4), the related sale or lease
transaction is not invalidated. The constitutional corporation which had actually sold
or leased the building lot or unit, however, would be subject to the civil penalty
provision in proposed subsection 372G(7) .
Proposed section 372H - Sale of building units--other projects
Proposed subsection 372H(1) provides that the fibre-ready installation requirement
for other projects applies to a real estate development project only if all the criteria set
out at proposed paragraphs 372H(1)(a) and (b) (relating to the construction of
building units but not including subdivision) are met.
The purpose of the criteria set out at proposed subsection 372H(1) is to identify the
types of real estate development projects whereby constitutional corporations are
required to deploy fibre-ready facilities and be subject to penalties if they attempt to
sell or lease land without it.
Proposed subparagraph 372H(1)(a)(i) is substantially similar to proposed
paragraph 372F(1)(a), except that it relates to other projects. These are essentially
construction projects not involving subdivision.
The purpose of proposed subparagraph 372H(1)(a)(ii) is to apply the rule in proposed
subsection 372H(2) to construction projects that involve the making available of
building units for sale or lease, but do not involve subdivision; that is, they are on land
that is already subdivided. For example, if a project simply involved the construction
of one building unit or a multi-apartment complex on existing land, proposed
subparagraph 372H(1)(a)(ii) would be satisfied providing the individual building units
(apartments) would be made available for sale and/or lease.
Proposed paragraph 372H(1)(b) adds the further requirement to proposed
paragraph 372H(1)(a) that basic utilities are to be provided to these building units.
Proposed paragraph 372H(1)(b) mirrors proposed paragraph 372F(1)(c).
Proposed subsection 372H(2) provides the fibre-ready installation requirement and
mirrors proposed subsection 372G(4), except that it applies in respect of construction
projects.
30
Proposed subsection 372H(3) is substantially similar to proposed subsection 372G(5);
and proposed subsections 372H(4) to (6) largely mirror proposed subsections 372G(6)
to (8) respectively.
Proposed Subdivision C--NBN Co may issue statement about the non-
installation of optical fibre lines
Proposed Subdivision C of Division 3 sets out a process by which NBN Co, by
issuing a written statement, can provide clarity as to whether a particular real estate
development project will be outside its long term fibre footprint. If a project is outside
the footprint, it would therefore not be necessary for fibre-ready facilities to be
installed in that project area. In issuing such statements, it is envisaged that NBN Co
will take a forward-looking perspective, in recognition that its long term fibre
footprint will be dynamic, changing over time in response to changes in demographics
or other matters.
Proposed section 372J - NBN Co may issue statement about the non-
installation of optical fibre lines
Proposed subsection 372J(1) enables NBN Co to issue a written statement to the
effect that neither it nor any other NBN corporation has installed, is installing, or
proposes to install optical fibre lines in the project area, or any of the project areas, for
a specified real estate development project - in effect, that the project area is outside
the NBN long term fibre footprint.
The purpose of this provision is to enable a person (such as a developer) to enquire
whether or not they will be subject to the fibre-ready facility requirement set out in
proposed Subdivision A of Division 3 and, for constitutional corporations, the fibre-
ready installation requirement set out in proposed Subdivision B of Division 3 of
Part 20A. This provision provides a process by which developers can seek clarity on
whether their projects may be subject to these rules.
It is expected that NBN Co will provide advice to developers about its long term fibre
footprint, so that fibre-ready facilities are not built in project areas where there is little
likelihood of their actually being used by NBN Co or other superfast
telecommunications network providers. (If fibre is to be deployed by another provider
in an area where NBN Co has stated it does not intend to install fibre, the provision of
passive infrastructure would be a contractual matter between the provider and the
developer.)
Proposed paragraph 372J(2)(a) makes it clear that persons (in particular developers)
can request NBN Co to provide a statement to the effect described in proposed
subsection 372J(1). For example, it is envisaged that there may be persons in some
remote areas with only one utility, say electricity, who may like certainty as to
whether their real estate development project is expected to receive optical fibre lines
and they need to install fibre-ready facilities.
As it is expected that NBN Co will provide information to the public about areas
where it is certain that no NBN corporation will deploy optical fibre lines as part of
the rollout of the NBN, proposed paragraph 372J(2)(b), which provides for NBN Co
to provide information on its own initiative, has been included. For instance, NBN Co
31
has already indicated that it expects seven per cent of premises in Australia will be
serviced by wireless or satellite technologies, rather than optical fibre lines.
Proposed subsection 372J(3) clarifies that a statement issued under proposed
subsection 372J(1) is not a legislative instrument for the purposes of the LIA as it is
not legislative in character. Proposed subsection (3) is merely declaratory. A
statement issued by NBN Co in accordance with these requirements is intended to
provide guidance to the public namely, developers.
It is intended that persons can rely on a statement issued at a particular time by NBN
Co under proposed section 372J about the non-installation of fibre in respect of a
project area for the entire duration of the project and on an ongoing basis. This is the
case even if the NBN Co's long term fibre footprint subsequently changes. Equally,
however, given NBN Co's long term fibre footprint may change, NBN Co may
subsequently refuse to issue a statement in relation to a project in the same locality, on
the basis it now envisages fibre will be installed in that area.
Proposed section 372JA - Register of Statements about the non-installation of
optical fibre lines
Proposed section 372JA provides an obligation on NBN Co to maintain a register of
all statements issued in accordance with proposed subsection 372J(1). NBN Co must
maintain the register by electronic means; and the register is to be made available for
inspection on NBN Co's website.
The purpose of this register is to provide transparent information to the public. Any
person can therefore ascertain whether a statement has been issued with respect to a
project area, or project areas, within their development. This is designed to enable
persons such as developers and their customers to ascertain whether the fibre-ready
facility requirement and, for constitutional corporations, the fibre-ready installation
requirement, apply in relation to a particular project.
As NBN Co is a carrier, a standard carrier licence condition imposed is that NBN Co
must comply with the Act (see clause 1 of Schedule 1 to the Act). Accordingly, NBN
Co would be under an obligation to maintain the register under proposed
section 372JA.
Proposed Subdivision D--Exemptions
The proposed arrangements to require the installation of fibre-ready facilities and
other fibre-related infrastructure carry potentially significant obligations. At the same
time they are being put in place in a marketplace which is inherently complex and
undergoing significant change. As such, the Bill provides for flexibility in the
implementation of the arrangements through the use of exemption powers in
Subdivision D of Division 3 in relation to the fibre-ready facility requirement and/or
the fibre-ready installation requirement.
32
Proposed section 372K - Exemptions - Ministerial instrument
Proposed subsection 372K(1) enables the Minister, by legislative instrument, to
exempt real estate development projects from:
� the fibre-ready facility requirement expressed in section 372E and/or 372F
(proposed paragraphs 372K(1)(c) and (d)); and
� the fibre-ready installation requirement for constitutional corporations under
proposed sections 372G and 372H (proposed paragraphs 372K(1)(e) and (f)).
These exemptions could be used, for example, to exempt a project that might still be
receiving one or more basic utilities outside the proposed long-term coverage of the
rollout of the NBN by an NBN corporation. Section 589 of the Act would enable the
Minister to incorporate by reference coverage maps or other guidance prepared by an
NBN corporation and the like to specify or ascertain exempt projects.
The proposed subsection 372K(1) would also allow the Minister to permit the
installation of fixed-line facilities other than fibre-ready facilities where appropriate.
For example, if fibre-ready facilities are already in place other fixed-line facilities
could be permitted (e.g. a dual provisioning approach) as the fibre-ready requirements
would already have been met and any penalty for not installing fibre-ready facilities
need not arise.
The Minister would be able to specify such exemptions either individually, or by class
(see subsection 13(3) of the LIA).
Proposed subsection 372K(2) clarifies that an exemption under proposed
subsection 372K(1) may be unconditional or subject to such conditions (if any) as are
specified in the exemption. For example, an exemption could be applied if a
development or class of developments is clearly beyond the NBN Co long term fibre
footprint or the development project is of a temporary nature or of a limited size.
Proposed subsection 372K(3) is similar to subsection 372K(1), except that it relates to
conduct specified or ascertained in accordance with an instrument for the purposes of
proposed subsection 372E(2) and/or proposed subsection 372F(2).
Proposed subsection 372K(4) is similar to proposed subsection 372K(2), except that it
relates to conduct referred to in proposed subsection 372K(3), rather than a real estate
development project referred to in proposed subsection 372K(1).
Proposed subsection 372K(5) enables the Minister, by legislative instrument, to
specify that a building lot is exempt from the fibre-ready installation requirement in
specified developments.
Proposed subsection 372K(6) is in substantially similar terms to proposed
subsections 372K(2) and (4), except that it applies to building units.
Proposed subsection 372K(7) is similar to proposed subsection 372K(5), except that it
relates to building units specified in or ascertained in accordance with the instrument
33
from the rule in proposed subsection 372G(4) and/or proposed subsection 372H(2)
relating to the installation of fibre-ready facilities.
Proposed subsection 372K(8) mirrors proposed subsection 372K(6), except that it
relates to an exemption under proposed subsection 372K(7) concerning building units,
rather than subsection 372K(5) which relates to building lots.
Proposed subsection 372K(9) provides that an instrument under subsection (1), (3),
(5) or (7) may confer functions or powers on the ACMA. For example, an exemption
instrument could provide for the ACMA to determine whether specified
circumstances under which an exemption was to operate (such as remoteness or that a
locality was outside NBN Co's long term fibre footprint) were applicable.
Proposed subsection 372K(9) mirrors proposed subsection 372B(5).
Proposed Division 4 -- Third party access regime
Proposed Division 4 of Part 20A provides a framework for carriers to seek access to
non-carrier fixed-line facilities with a view to supporting the rollout of optical fibre.
Such facilities may be owned, for example, by developers or councils. The provision
of access could be commercially negotiated or failing agreement, arbitrated by an
agreed arbitrator or the ACCC as the default arbitrator. This model mirrors the regime
in clauses 35-37 of Part 5 of Schedule 1 of the Act which provides for carrier access
to the underground facilities of other carriers.
The Division also allows the Minister to give exemptions using a legislative
instrument. Provision is also made for the Minister to confer functions or powers on
the ACCC in relation to an exemption.
Proposed section 372L - Third party access regime
Proposed subsection 372L(1) provides that the third party fixed-line access regime
applies to fixed-line facilities in Australia if:
� the installation occurs after the commencement of proposed section 372L
(proposed paragraph 372L(1)(a)); and
� the facility is owned or operated by a person other than a carrier (proposed
paragraph 372L(1)(b)).
`Fixed line facility' is defined in proposed section 372V.
The term `Australia' is defined in section 7 of the Act and it is intended to refer to the
six States of Australia, the Australian Capital Territory, the Northern Territory, the
Territory of Norfolk Island, The Territory of Cocos (Keeling) Islands and the
Territory of Christmas Island.
The proposed regime does not apply to fixed-line facilities which were installed
before the proposed new regime commences.
34
The proposed regime will allow a carrier to seek access to a fixed-line facility owned
or operated by third parties, such as a developer, utility, council or private property
owner.
Proposed subsection 372L(2) sets out a general rule which requires the owner or the
operator of a fixed-line facility, if requested to do so by a carrier, to give the carrier
access to that facility.
Proposed subsection 372L(3) provides that the owner or operator of a fixed-line
facility is not required to comply with the request unless:
� the access is provided for the sole purpose of enabling the carrier to provide
facilities and carriage services (proposed subparagraph 372L(3)(a)(i)); or
� to establish its own facilities (proposed subparagraph 372L(3)(a)(ii)); and
� the carrier gives the owner or operator of the facility reasonable notice that the
carrier requires access (proposed paragraph 372L(3)(b)).
Proposed subsection 372L(4) provides that an owner or operator of the facility is not
required to comply with proposed subsection 372L(2) in relation to the facility if there
is in force a written certificate issued by the ACCC stating that, in the ACCC's
opinion, compliance with proposed subsection 372L(2) in relation to the facility is not
technically feasible. This provision sets out the powers of the ACCC to issue a
certificate to the owner or operator of a fixed-line facility exempting it from the third
party access obligation, if the facility cannot readily offer access to third parties.
Proposed subsection 372L(5) sets out the factors which the ACCC must consider
before deciding to issue a certificate under proposed subsection 372L(4). The factors
are:
� whether compliance is likely to result in significant difficulties of a technical
or engineering nature (proposed paragraph 372L(5)(a)) -- for example, for an
underground facility, the conduit might be too small to accommodate
additional cabling; and
� whether compliance is likely to result in a significant threat to the health or
safety of persons who operate, or work on, the facility (proposed
paragraph 372L(5)(b)); and
� if compliance is likely to have a result referred to in paragraph (a) or (b)--
whether there are practicable means of avoiding such a result, including (but
not limited to):
o changing the configuration or operating parameters of the facility
(proposed subparagraph 372L(5)(c)(i)); and
o making alterations to the facility (proposed
subparagraph 372L(5)(c)(ii)); and
� such other matters (if any) as the ACCC considers relevant (proposed
paragraph 372L(5)(d)).
Before issuing a certificate under proposed subsection 372L(4), the ACCC may
consult with the ACMA if it considers it appropriate to do so (see proposed
subsection 372L(6)).
Proposed subsection 372L(7) provides that if the ACCC receives a request to make a
decision about the issue of a certificate under proposed subsection 372L(4), the
35
ACCC must use its best endeavours to make that decision within 10 business days
after the request is made.
The rule in proposed subsection 372L(2) does not impose an obligation to the extent
(if any) to which the imposition of the obligation would have the effect of depriving
any person of a right under a contract that was in force at the time the request was
made (proposed subsection 372L(8)). This recognises that giving a carrier access to a
fixed-line facility could affect the ability of a person with contractual rights to use the
facility. If the owner or occupier of the fixed-line facility had contracted to provide
access to another carrier, for example, the person would not be required to comply
with the request if the access requested prevented the pre-existing contracted party
from use of the facility.
Proposed subsection 372L(9) provides ancillary contravention provisions. Proposed
subsection 372L(10) provides that proposed subsections 372L(2) and (9) are civil
penalty provisions.
Proposed section 372M - Terms and conditions of access
Proposed section 372M relates to the terms and conditions of access to fibre-ready
facilities as described in proposed section 372L.
Proposed subsection 372M(1) provides that the owner or occupier of a fixed-line
facility must comply with proposed subsection 372L(2) on such terms and conditions
as are agreed between the owner or operator of the facility and the carrier who has
requested access under subsection 372L(2) (proposed paragraph 372M(1)(a)). Failing
commercial agreement, the terms and conditions will be determined by an arbitrator
appointed by the parties (proposed paragraph 372M(1)(b)). If the parties fail to agree
on the appointment of an arbitrator, the ACCC is to be the arbitrator.
This model ensures there is a clear methodology for the terms and conditions of
access to be determined.
Proposed subsection 372M(2) provides that the regulations may make provision for
and in relation to the conduct of an arbitration under section 372M. For instance the
regulations may specify rules of procedure in the conduct of an arbitration conducted
for the purposes of section 372M. It is envisaged that any regulations made would be
similar to those which currently apply in relation to clause 36 of Schedule 1 to the
Act.
The regulations may provide that, for the purposes of a particular arbitration
conducted by the ACCC under proposed section 372M, the ACCC may be constituted
by a single member, or a specified number of members of the ACCC (see proposed
subsection 372M(3)). Further, for each such arbitration, that member or those
members are to be nominated in writing by the Chairperson of the ACCC. The effect
of regulations made pursuant to proposed subsection 372M(3) would be that the
Chairperson of the ACCC may delegate to a single member or specified number of
members of the ACCC the effective administration of arbitration of the terms and
conditions of the third party access regime. This is intended to give the ACCC
flexibility about how arbitration proceedings are conducted.
36
Proposed subsection 372M(4) provides that proposed subsection 372M(3) does not,
by implication, limit proposed subsection 372M(2) with respect to the making of
regulations.
The effect of proposed subsection 372M(5) is that the carrier and third party will only
be permitted to seek an arbitration about terms and conditions only for those matters
that have not been agreed commercially.
Proposed section 372N - Exemptions - Ministerial instrument
Proposed subsection 372N(1) would enable the Minister by legislative instrument to
exempt a fixed-line facility, specified in an instrument or a fixed-line facility
ascertained in accordance with the instrument, from the scope of section 372L.
This power could be used, for example, to exempt an owner or operator of a fixed-line
facility from the requirement to provide access, because the facility is not in an area
within the NBN Co long term fibre footprint or is otherwise required for the rollout of
optical fibre cabling.
The Minister would be able to specify such exemptions either individually, or by class
(see subsection 13(3) of the LIA).
Proposed subsection 372N(2) clarifies that an exemption under proposed
subsection 372N(1) may be unconditional or subject to such conditions (if any) as are
specified in the exemption.
Proposed subsection 372N(3) provides that an instrument made under proposed
subsection 372N(1) may confer functions or powers on the ACCC. For instance, an
instrument may provide a decision making role for the ACCC as to whether a facility
meets a description of a class of exempt facilities.
Proposed subsection 372N(4) enables the ACCC to delegate any or all of its functions
to a member of the ACCC, as defined in the CCA.
Proposed section 372NA - Code relating to access
Proposed section 372NA sets out provisions enabling the ACCC to make a code in
relation to third party access under Division 4, and the obligation of owners and
operators of fixed-line facilities to comply.
Proposed subsection 372NA(1) provides that the ACCC may, by legislative
instrument, make a code setting out conditions that are to be complied with in relation
to the provision of access under this Division.
Proposed subsection 372NA(2) provides that the owner or operator of a fixed-line
facility must comply with such a code which is in force at any time. Breaches may be
subject to the civil penalties.
Proposed subsections 372NA(3)-(5) set out instances where the provisions do not
limit the matters that can be dealt with.
37
Proposed subsection 372NA(6) provides for ancillary contraventions of proposed
subsection 372NA(2). Proposed subsection 372NA(7) provides that proposed
subsections 372L(2) and (6) are civil penalty provisions.
It is envisaged that the ACCC would make a code which is similar to that relating to
the carrier facility access regimes under Schedule 1 to the Act or may modify that
code to also cover matters relevant to the access arrangements under this division.
Proposed Division 5 -- Exemption of certain projects
Proposed Division 5 sets out exemptions for pending projects which meet certain
criteria from the optical fibre line requirement under proposed Division 2. A limited
exemption is also provided from the fibre-ready facility requirement and the fibre-
ready installation requirement under proposed Division 3 for pending projects which
meet certain criteria.
Proposed section 372P - Exemption of certain projects
Proposed subsection 372P(1) provides an exemption from the optical fibre line
requirement under Division 2 for real estate development projects where a person
carrying out an element of the project has, before proposed section 372P commences,
either:
� started to install lines in the project area, or any of the project areas, for the
project (proposed paragraph 372P(1)(a)); or
� entered into a contract with another person for the installation of lines in the
project area, or any of the project areas, for the project (proposed
paragraph 372P(1)(b)).
Proposed subsection 372P(2) mirrors proposed subsection 372P(1), except that it
relates to exemptions from the fibre-ready facility requirement and/or the fibre-ready
installation requirement under proposed Division 3.
Proposed subsection 372P(3) provides an exemption from the fibre-ready facility
requirement and/or the fibre-ready installation requirement under Division 3. The
exemption applies where a person carrying out an element of the project has, before
proposed section 372P commences, either:
� begun civil works associated with the project (proposed
paragraph 372P(3)(a)); or
� entered into a contract with another person for the carrying out of civil works
associated with the project (proposed paragraph 372P(3)(b)).
Proposed section 372P has been inserted into the Bill because it would be
unreasonable to apply the rules in such instances. For example, if a contract has
already been let, it would be excessively onerous to then require developers to break
commercial contracts which were entered into at a time when no such rules applied.
Similarly, it would be inconvenient and costly to developers to have to stop physical
works or the installation of fixed lines or facilities in their developments.
38
Proposed Division 6 -- Miscellaneous
Proposed Division 6 sets out a number of new definitions supporting the operation of
proposed Part 20A. The definitions will also support any exemptions contained in
legislative instruments made by the Minister under proposed Part 20A. Proposed
Division 6 also clarifies that State or Territory laws operate concurrently with
proposed Part 20A of the Act to the extent that they are not inconsistent with the Bill.
Proposed section 372Q - Real estate development projects etc.
Proposed section 372Q defines a `real estate development project' for the purposes of
the Act in relation to projects involving subdivision and/or construction. Proposed
section 372Q additionally provides meanings of the terms `project area' and `building
lot'.
Proposed subsection 372Q(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 each requirement at proposed
paragraphs 372Q(1)(a), (b) and (c).
Proposed paragraph 372Q(1)(a) indicates that the definition of `real estate
development project' in proposed subsection 372Q(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 372Q(1)(b)(i) indicates that a project involving the making
available of lots 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. This provision 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 or 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. See the explanatory comments for
proposed section 372S below for further commentary about the meaning of `building
unit'.
Proposed subparagraph 372Q(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 meet this criterion. Proposed
subparagraph 372Q(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 single dwelling units.
In order for a project to be a `real estate development project' under proposed
subsection 372Q(1), the project must also satisfy the conditions (if any) that are
specified by the Minister in a legislative instrument under proposed
39
paragraph 372Q(1)(c) and proposed subsection 372Q(4). This provides flexibility for
the Minister, if required, to further specify what is meant by `real estate development
project' under proposed subsection 372Q(1).
Proposed subsection 372Q(2) provides the meaning of `project area' for real estate
development projects falling under proposed subsection 372Q(1). That is, by
reference to an area of land mentioned in proposed subsection 372Q(1). A real estate
development project can comprise one or more project areas (see proposed paragraph
372Q(8)(d)).
Proposed subsection 372Q(3) provides a definition of `building lot' for the purposes
of the Act, by reference to a lot mentioned in proposed subsection 372Q(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 372Q(1)) is a `building lot'.
Proposed subsection 372Q(4) allows the Minister to specify conditions for the
purposes of proposed paragraph 372Q(1)(c) by means of a legislative instrument.
Proposed subsection 372Q(5) provides a second meaning of a `real estate
development project' for projects involving construction of building units. The
definition of `real estate development project' in proposed subsection 372Q(5) differs
from the definition provided in proposed subsection 372Q(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 a construction project where land is already
subdivided or no subdivision is required.
Proposed subsection 372Q(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 building 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 372Q(5), the project must also satisfy the conditions (if any) that are
specified by the Minister in a legislative instrument under proposed
paragraph 372Q(5)(b) and proposed subsection 372Q(7).
Proposed subsection 372Q(6) provides the meaning of `project area' for real estate
development projects falling under proposed subsection 372Q(5).
Proposed subsection 372Q(7) allows the Minister to specify conditions for the
purposes of proposed paragraph 372Q(5)(b) by means of a legislative instrument.
40
Proposed subsection 372Q(8) contains rules to assist in the application of proposed
subsections 372Q(1) and 372Q(5). This subsection seeks to take account of the
complexity that may be involved in development projects.
Proposed paragraph 372Q(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 372Q(1) and 372Q(5).
Proposed paragraph 372Q(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 372Q(1) and 372Q(5).
Proposed paragraph 372Q(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 a `real estate development project' for the purposes
of proposed subsections 372Q(1) and 372Q(5) is applicable regardless of the number
of planning approvals, building approvals or other approvals for the project, however
described.
Proposed paragraph 372Q(8)(d) states that 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 recognises the scenario where different owners of land 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 them.
Proposed section 372R - Subdivision of an area of land
Proposed section 372R 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 building 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.
Proposed section 372S - Building units
Proposed section 372S provides the definition of `building unit'.
Proposed subsection 372S(1) indicates that proposed section 372S applies to a
building that has been constructed, is currently being constructed, or is to be
constructed. It is necessary for proposed section 372S to apply to past, present and
future building constructions given that the provisions proposed under the Bill use
definitions and concepts that may rely upon the past, present and future construction
41
of buildings in order to describe a number of the obligations set out under the Bill.
Nevertheless, the requirements under the Bill do not in any way apply to building
units constructed prior to the commencement of the Bill. Furthermore, the
requirements under Division 3 of the Bill will not apply if the building unit is
constructed after the commencement of the Bill in the case where:
� the civil works for the real estate project in which the building unit is
situated had commenced prior to the commencement of the Bill; or
� contracts for the civil works were let.
Proposed subsection 372S(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 372S(3) provides, for the purposes of the Act, that if the whole
or a 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 whole or part of
the building is a building unit. This is to ensure that the rules in proposed Part 20A
apply appropriately to strata title developments.
Proposed subsection 372S(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' for the purposes of the Act. 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 372T - Sale of building lots
Proposed section 372T provides that for the purposes of the Act, a person `sells' a
building lot if:
� in a case where the person holds a freehold interest in the land concerned - the
person transfers the whole or part of their freehold interest in the land
concerned (paragraph 372T(a)); or
� in a case where the person holds a leasehold interest in the land concerned -
the person transfers the whole or part of their leasehold interest in the land
concerned (paragraph 372T(b)).
The words `transfer', `freehold interest' and `leasehold interest' have not been defined
in the Act as their ordinary meaning is intended to apply. The purpose of specifying
that a person transferring part of their freehold or leasehold interest is taken to sell a
building lot is to clarify that a person does not need to transfer all of their interest in
land to satisfy this definition. For example, if a person held the whole freehold interest
in the land concerned and then transferred half of their freehold interest, the person
will be taken to have sold the building lot.
42
Proposed section 372U - Sale of building units
Proposed section 372U provides that for the purposes of the Act, a person `sells' a
building unit in three circumstances:
� where a person holds the freehold interest, a person will be taken to `sell' a
building unit if the whole of the building is for single occupation or use and
the person transfers the whole or part of the freehold interest in the land
(paragraph 372U(a)); or
� where a person holds a leasehold interest in the land, a person will be taken to
`sell' the building unit if the person transfers the whole or part of the leasehold
interest (paragraph 372U(b)); or
� where a person holds the whole or part of a building unit under a strata title
scheme (however described) and the person transfers the whole or part of that
interest, a person `sells' a building unit for the purposes of the Act
(paragraph 372U(c)).
See the explanatory notes for proposed section 372T above for an explanation of
transferring a part of a freehold interest in land.
Proposed section 372V - Fixed-line facilities
Proposed section 372V provides the definition of `fixed-line facility' for the purposes
of the Act.
Proposed section 372V provides 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's
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 internal
ducting that could be used for customer cabling linking customer equipment to the
telecommunications network at the network boundary point.
Proposed section 372W - Fibre-ready facility
Proposed section 372W sets out the definition of a `fibre-ready facility' for the
purposes of the Act. The definition covers two categories:
� an underground fixed-line facility that is used, or for use, in connection with
an optical fibre line and which satisfies such conditions (if any) as are
specified in a legislative instrument made by the Minister
(paragraph 372W(a)); and
� any other fixed-line facility that is used, or for use, in connection with an
optical fibre line; is specified in a legislative instrument made by the Minister;
and satisfies such conditions (if any) as are specified in a legislative
instrument made by the Minister (paragraph 372W(b)).
43
The purpose of the second category is to enable the Minister to specify other types of
fixed-line facilities, including above ground facilities, as fibre-ready facilities
individually or by class (see subsection 13(3) of the LIA). If necessary, it is envisaged
that the Minister would exercise this power to make a legislative instrument
specifying other fixed-line facilities to be fibre-ready facilities, and at the same time
would make a legislative instrument specifying conditions that must be met by the
fibre-ready facilities.
Because fibre-ready facilities are for use in connection with optical fibre cabling they
will necessarily need to be designed and installed with that purpose in mind. In the
case of underground fibre-ready facilities, for example, this would include ducting
with gentle enough angles to allow the ready deployment of fibre. More detailed
specifications could be set out in industry codes or standards, carrier specifications or
in a Ministerial instrument as discussed below.
If the Minister were to specify additional attributes of fibre-ready facilities under
proposed subparagraph 372W(a)(ii) and proposed subparagraph 372W(b)(iii),
examples of possible attributes are:
� 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 of these provisions is to ensure that the fibre-ready fixed-line facilities
that are installed in these developments will permit fibre to be installed into the future
in a quick and efficient manner, at low cost and with minimum inconvenience to the
community.
Proposed section 372X - Installation of a facility
For the purposes of new Part 20A, proposed section 372X 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.
Proposed section 372Y - Installation of a fibre-ready facility in proximity to a
building lot or building unit
Proposed section 372Y provides the meaning of installation of a facility in
`proximity' to a building lot or a building unit for the purposes of Part 20A of the Act.
The concept of proximity is used in proposed Division 3.
The purpose of proposed 372Y(1) is to ensure that fibre-ready facilities are installed
either in, on, under the lot (proposed subparagraph 372Y(1)(a)) or close enough to the
building lot (proposed subparagraph 372Y(1)(b)) to enable ready connection of
optical fibre lines to any building unit that may be or is constructed on the lot.
44
The purpose of proposed subsection 372Y(2) is to ensure that fibre-ready facilities are
installed close enough to the building unit to enable ready connection to that building
unit. A fibre-ready facility that has been built under a concrete slab where it cannot be
readily accessed by persons deploying optical fibre line would not be installed in
proximity to a building lot or building unit.
Proposed section 372Z - Sewerage services, electricity or water supplied to a
building lot or building unit
Proposed section 372Z provides explanations in relation to the supply of the following
utilities to building lots and building units:
� sewerage services;
� electricity; and
� water.
The supply of these basic utilities to building lots and building units is important to
the application of the requirements of Part 20A in that the supply of utilities is used as
a prima facie indicator that a building lot or a building unit is in a location that may be
in NBN Co's long term fibre footprint. However, it is recognised that this may not
always be the case, therefore the Bill includes legislative mechanisms to enable the
Minister to exempt on a case-by-case basis or by class building lots and/or building
units. For example, many localities may be supplied with mains electricity, but not be
within NBN Co's long term fibre footprint. In addition, proposed section 372J
provides a mechanism by which NBN Co can provide guidance on whether or not it
will be installing fibre in a particular locality.
Proposed subsection 372Z(1) sets out when sewerage services are taken to be supplied
to a building lot for the purposes of proposed Part 20A. It describes where the
sewerage pipeline is installed (proposed paragraph 372Z(1)(a), and requires that such
a pipeline forms part of a public sewerage system (proposed paragraph 372Z(1)(b)):
that is, there must be a sewerage pipeline as part of a public sewerage system either
actually installed under the building lot; or the pipeline must be installed close enough
to the building lot to enable ready connection of sewerage services to a building unit
constructed on the building lot. For example, if a septic tank was installed on, or close
to the building unit to provide for sewerage, the septic tank would not be taken to be
sewerage services `supplied' to a building lot for the purposes of proposed Part 20A.
Proposed subsection 372Z(2) sets out when sewerage services are taken to be supplied
to a building unit for the purposes of proposed Part 20A. The purpose of proposed
subsection 372Z(2) is similar to proposed subsection 372Z(1); however, it relates to
the supply of sewerage services to building units.
Proposed subsection 372Z(3) sets out when electricity is taken to be supplied to a
building lot for the purposes of proposed Part 20A. It describes where the electricity
cable is installed (proposed paragraph 372Z(3)(a)), and requires that the cable is to
form part of an electricity supply grid (proposed paragraph 372Z(3)(b)).
The purpose of proposed subsection 372Z(3) is to make clear that to be regarded as
electricity supplied to a building lot for the purposes of proposed Part 20A there must
be an electricity cable that is part of an electricity supply grid installed either over or
45
under the building lot, or close enough to enable the electricity cable to be readily
connected to a building unit constructed on the building lot. The provision would not
apply if the premises are supplied with electricity, for example, using a generator or
through solar panels at the premises and the premises are not connected with a cable
to the electricity supply grid.
The purpose of proposed subsection 372Z(4) is similar to proposed
subsection 372Z(3), in that to be regarded as electricity supplied to a building unit,
there must be an electricity cable as part of an electricity supply grid installed close
enough to the building unit to enable ready connection of electricity to the building
unit.
Proposed subsection 372Z(5) sets out when water is taken to be supplied to a building
lot for the purposes of proposed Part 20A. It describes where the water pipeline is
installed (proposed paragraph 372Z(5)(a)), and requires the pipeline to form part of a
reticulated water supply system (proposed paragraph 372Z(5)(b)).
The purpose of proposed subsection 372Z(5) is to make clear that in order for water to
be regarded as supplied to a building lot for the purposes of proposed Part 20A, there
must be a water pipeline that is part of a network of water supply, installed either
under the building lot, or close enough to enable water to be readily connected to a
building unit constructed on the building lot. For instance, where a building lot relied
on a private water tank or a non-piped source of water (such as a bore, spring or
watercourse) for water supply, the water would not be taken to be supplied to a
building lot for the purposes of proposed Part 20A.
The purpose of proposed subsection 372Z(6) is similar to proposed
subsection 372Z(5) in that in order for water to be regarded as supplied to a building
unit, there must be a water pipeline that is part of a network of water supply installed
close enough to the building unit to enable ready connection of water to the building
unit.
Proposed section 372ZA - Supply to the public
Proposed subsection 372ZA(1) 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
(specifically, proposed sections 372B and 372C). That is, if:
� a line consists of, or forms part of, a network unit (proposed
paragraph 372ZA(1)(a)); 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 paragraph 372ZA(1)(b)).
Proposed subsection 372ZA(2) is similar to proposed subsection 372ZA(1), although
it applies where the line neither consists of nor forms part a network, such a line will
be taken to be a network unit for the purposes of new Part 20A.
Section 44 of the Act sets out 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 in section 44 for a `network unit' is therefore adopted
46
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'. The material difference is that
under proposed section 372ZA, it is immaterial whether the line consists of, or forms
part of a network unit.
Proposed subsection 372ZA(2) has been included in the Bill as a technical
amendment, to make clear that the provisions will apply, regardless of existing
provisions in the Act that might set minimum lengths for lines linking network units
(for example, a single line link network unit ordinarily would need to be 500m or
greater in length).
Proposed section 372ZB - Concurrent operation of State and Territory laws
Proposed section 372ZB provides that proposed Part 20A is not intended to exclude
or limit the operation of a law of a State or Territory that is capable of operating
concurrently with Part 20A. It is the Australian Government's view that
complementary State and Territory legislation may be implemented to further ensure
appropriate fibre lines and fibre-ready facilities are installed in new developments. An
example of a complementary law could possibly be one which ensured that
developers who are not constitutional corporations would be required to install
fibre-ready facilities in new developments.
Proposed section 372ZC - Optical fibre line
Proposed section 372ZC inserts a definition of `optical fibre line', for the purposes of
proposed Part 20A. An optical fibre line is a line that consists of, or encloses, optical
fibre. The reference to `encloses' optical fibre in the definition is intended to refer to
the immediate casing surrounding the fibre, not the underground duct in which a cable
may be installed (which is a separate facility). The definition recognises that fibre
lines are generally sheathed in plastic tubes, which in turn are bundled together and
further sheathed to form a cable.
As discussed in Part 2 of Schedule 1, proposed section 372ZC will be repealed if and
when the Access Arrangements Bill takes effect--see the explanatory notes for item
16, Part 2 of Schedule 1 for further explanation.
Proposed section 372ZD - NBN Co
Proposed section 372ZD provides that, in proposed Part 20A, `NBN Co' means NBN
Co Limited (ACN 136 533 741), as the company exists from time to time, irrespective
of whether the company changes its name.
Proposed section 372ZE - NBN corporation
Proposed section 372ZE provides that `NBN corporation' has the same meaning as in
section 577BA.
As discussed in Part 2 of Schedule 1, proposed section 372ZE will be repealed if and
when the Access Arrangements Bill takes effect--see the explanatory notes for item
16, Part 2 of Schedule 1 for further explanation.
47
Amendments to provisions in Part 21 -- Technical regulation
The Bill also proposes amendments to some provisions in Division 3 (Technical
standards about customer equipment and customer cabling) and Division 9 (Cabling
providers) of Part 21 of the Act.
The amendments relate to the ability of the ACMA to make standards in relation to
the interoperability of customer equipment with the NBN or other superfast
telecommunications networks, and to set standards for customer equipment and
customer cabling to be connected to the NBN or other superfast telecommunications
networks. The Bill will also enable the Minister to direct the ACMA to make
technical standards under Division 3 and update directions powers in Division 9.
These amendments are intended to ensure that the ACMA has sufficient powers to
make technical standards should these be required to assist with the operation of the
NBN or other superfast telecommunications networks.
Item 11 - After paragraph 376(2)(d) - ACMA's power to make technical
standards
Under existing section 376 (Division 3 of Part 21 of the Act), power is conferred on
the ACMA to make technical standards in relation to specified matters in relation to
customer equipment or specified customer cabling. ACMA can only make technical
standards that are consistent with the aims of section 376 of the Act (for example,
protecting the integrity of a telecommunications network or facility). Given the
importance of deriving optimal benefit from the NBN and other superfast
telecommunications networks, scope is being added to make standards in relation to
customer equipment and cabling to be used in connection with such networks.
Item 11 amends subsection 376(2) by inserting proposed subparagraphs 376(2)(da),
(db) and (dc) which make it clear that the ACMA can also make technical standards
relating to customer equipment and customer cabling for the purposes of ensuring:
� the interoperability of such equipment with the NBN or any other superfast
telecommunications network providing superfast carriage services
(paragraph 376(2)(da)) - this approach is similar in some respects to the
concept of interoperability as set out in existing paragraph 376(2)(d), which
relates to interoperability for the standard telephone service; or
� such equipment and cabling operates in a manner so as to meet particular
performance requirements when they are connected to the NBN or any other
superfast telecommunications network providing superfast carriage services
(paragraph 376(2)(db)); or
� such equipment and cabling has particular design features that will apply when
they connected to the NBN or any other superfast telecommunications
network providing superfast carriage services (paragraph 376(2)(dc)).
The specification of these matters at section 376 means that they are not subject to the
rule in paragraph 376(2)(e) that technical standards must not specify an objective if
the achievement of the objective is likely to have the effect (whether direct or
48
indirect) of requiring a telecommunications network or a facility to have particular
design features or performance standards.
The terms `national broadband network', `superfast carriage service' and `superfast
telecommunications network' are defined in proposed subsection 376(7). See the
explanatory notes below for an explanation of those definitions.
Item 12 - At the end of section 376
Item 12 amends section 376 of the Act by inserting proposed subsection 376(7).
Proposed subsection 376(7) provides definitions for three key terms used in proposed
paragraphs 376(2)(da), (db) and (dc), as described in item 11 above.
The term `national broadband network' (NBN) is given the same meaning as in
section 577BA of the Act.
The term `superfast carriage service' is defined to capture carriage services
which:
� allow end-users to download communications at a data transmission speed of
more than 25 megabits per second (under normal conditions)
(paragraphs 376(7)(a) and (b)); and
� are fixed-line services supplied to premises occupied or used by an end-user
(i.e. retail services) (paragraph 376(c).
The 25 megabits per second download speed has been selected because it is the
minimum speed higher than the peak speeds available on ADSL2+ platforms.
The term `superfast telecommunications network' is defined to cover any
telecommunications network that is used, or is capable of being used to supply a
superfast carriage service to customers.
The concepts and terms are consistent with those used in the Access Arrangements
Bill in respect of the matters dealt with by that Bill - see the explanatory notes for
proposed subsection 141(10) of the Act in item 86 of the Access Arrangements Bill.
Item 13 - After section 376
Proposed section 376A - ACMA must make technical standards if directed by
the Minister
Proposed item 13 inserts proposed section 376A into the Act.
Proposed subsection 376A(1) has the effect of enabling the Minister to require the
ACMA to make technical standards that deal with one or more specified matters
under subsection 376(2) within the specified time. Such a direction could, for
example, require the ACMA to make technical standards concerning the
interoperability of customer equipment; particular performance requirements; and/or
particular design features for the purposes of proposed paragraphs 376(2)(da), (db)
and/or (dc), in relation to the NBN and other superfast telecommunications networks.
49
Section 14 of the ACMA Act provides the Minister with a broad power of direction in
relation to the performance of the ACMA's functions and the exercise of the ACMA's
powers.
Proposed subsection 376A(2) provides that the Minister must not give the ACMA a
direction under section 14 of the ACMA Act to require the ACMA to make a
technical standard under section 376 that deals with one or more specified matters in
subsection 376(2). Subsection 376A(2) clarifies that if the Minister wished to direct
the ACMA to make a technical standard for the purposes of section 376 of the Act,
the Minister would need to do so using his or her discretionary power under
subsection 376A(1) of the Act, rather than the general power of direction under
section 14 of the ACMA Act.
Item 14 - Subsection 440(1)
Under subsection 440(1) of the Act, the Minister may give the ACMA written
directions about how the ACMA is to perform its functions or exercise of powers
under Division 9 of Part 21 of the Act (cabling providers).
Item 14 amends subsection 440(1) to provide that the Minister may `by legislative
instrument' give the ACMA such written directions for the purposes of Division 9 of
Part 21 of the Act. This amendment brings the language of subsection 440(1) up to
date, to reflect the language used in the LIA, by clarifying that the written direction is
by legislative instrument.
While this is a minor technical amendment, it is a timely one in the context of the
current rollout of the NBN. For example, should it be necessary, the Minister is able
to direct the ACMA to make appropriate rules for customer cabling work to ensure
optimal performance where that cabling is to be connected to the NBN or other
superfast telecommunications networks.
Specifically, paragraph 6(d)(i) of the LIA provides that an instrument made in the
exercise of a power delegated by the Parliament before the LIA came into operation,
and in accordance with a provision of the enabling legislation declared to be a
disallowable instrument for the purposes of section 46A of the AIA as in force, to be a
legislative instrument.
The reference in subsection 440(2) to the direction being a disallowable instrument is
repealed by proposed item 15 below - see the explanatory notes below.
Item 15 - Subsection 440(2)
Subsection 440(2) provides that a direction under subsection 440(1) is a disallowable
instrument for the purposes of section 46A of the AIA. Section 440 was originally
drafted prior to the introduction of the LIA and the repeal of subsection 440(2) is
made to modernise the drafting language of this provision and to bring it up to date
with the LIA. As noted above in item 14, the proposed amendment to
subsection 440(1) clarifies that such a direction is made by legislative instrument.
50
Item 15 repeals existing subsection 440(2) and substitutes in its place two proposed
subsections 440(2) and (2A).
Proposed subsection 440(2) clarifies that a direction under subsection 440(1) may
require the ACMA to make cabling provider rules that deal with one or more
specified matters. For example, the Minister could direct the ACMA to develop
cabling rules to ensure customer cabling is installed in a manner which maximises the
performance of the cabling when it is connected to the NBN and other superfast
telecommunications networks.
Proposed subsection 440(2A) clarifies that the proposed subsection 440(2) does not
limit subsection 440(1). In other words, the Minister may give the ACMA written
directions, by legislative instrument, concerning other functions or powers of the
ACMA under Division 9 of Part 21 of the Act.
Part 2 -- Other amendments
Telecommunications Act 1997
Item 16 - Proposed sections 372ZC and 372ZE
As noted in relation to item 10, proposed section 372ZC inserts a definition of `optical
fibre lines' into the Act. Item 16 operates to repeal proposed section 372ZC.
As noted in relation to item 10, proposed section 372ZE inserts a definition of `NBN
corporation' into proposed Part 20A. This definition has the same meaning as in
section 577BA(12) of the Act. Item 16 also operates to repeal proposed
section 372ZE.
The reason for this is that the Access Arrangements Bill proposes identical definitions
of `optical fibre lines' and `NBN corporation' to be inserted into section 7 of the Act.
Therefore, if the Access Arrangements Bill is enacted before this Bill, the definitions
`optical fibre lines' and `NBN corporation' under the Access Bill would apply to
proposed Part 20A and the identical definitions proposed under this Bill
sections 372ZE and 372ZE would not required. See the commentary above for clause
2 (commencement), for further details.
51