Telstra flags high cost of greenfields detail delays

Telstra has warned the Government's tardiness in releasing details of subordinate legislative changes governing telecommunications in new housing estates could cost it and other telcos a lot of money.

The incumbent also warned it might retract its offer to deploy passive infrastructure for free into estates that were no longer eligible for free copper, due to ongoing uncertainty over regulatory aspects of the Government's proposal.

In a senate submission [PDF], the incumbent called on the Government to reveal the text of planned subordinate legislation that is meant to iron out technical and implementation challenges of the Government's fibre mandate due to come into effect July 1.

"We have substantial operational issues to grapple with in respect of a change in policy of this magnitude including workforce deployment, contractual obligations, forward planning and financial considerations," Telstra said.

"At this stage, so close to the implementation date [of July 1], Telstra and other affected parties will need to act quickly to readjust many operational parameters, potentially at significant cost.

"Much greater clarity is required for Telstra to adjust all its relevant business processes and practices."

The Housing Industry Association backed calls for more clarity.

"There are still significant details yet to be resolved in respect to this legislative instrument, 12 months [in]," chief executive Graham Wolfe said.

"This process has created confusion for the residential development industry to date, and needs to be carefully managed to ensure that the legislation does not have a negative affect on land supply over the next 12 months."

It also followed calls by consultancy Robin Russell & Associates yesterday to expedite the release of proposed subordinate legislation.

Wireless warning

Telstra also used its submission to criticise the Government's recently-introduced ‘fibre-ready' status exemption for greenfields estates.

It effectively handed Communications Minister Stephen Conroy discretion to exempt estates of his choosing from the expense of deploying fibre networks, instead requiring them only to deploy passive infrastructure that was ready for NBN Co to deploy fibre through when it reached that estate.

iTnews reported last month that residents in fibre-ready estates would effectively be forced to rely on wireless phone and internet services until NBN Co came by.

Telstra has confirmed that in the absence of fibre that it would likely use wireless to meet universal service obligations in ‘fibre-ready' estates.

"A voice channel generally requires only 64 Kbps which is only a tiny fraction (1/156) of the capacity of any 100 Mbps FTTP network," Telstra said.

"Telstra must fulfill its USO through the most effective and economical means. Fibre deployment, without a developer or Government contribution, is not a viable option.

"If copper is prohibited [by the Government from being rolled out in new estates], in many circumstances wireless will be the best short term option."

But Telstra had a blunt warning: "Such a situation should not be permitted to continue indefinitely but we are unaware of whether NBN Co intends, or will be required, to make such new development areas a priority for rollout."

The NBN Co's role in greenfields deployments is becoming an increasingly thorny issue. iTnews reported last month on the lack of clarity over NBN Co's potential role.

The Government said it was awaiting advice from NBN Co on the issue; NBN Co said it was awaiting regulatory clarity from the Government before offering its services to housing developers.

Goodwill gesture still on the table

When Telstra announced it would no longer deploy copper in new housing estates in March, it extended an olive branch to developers. The offer was that Telstra would continue digging pits and pipes at no cost to developers who were yet to award a fibre-deployment contract to Telstra or its rivals.

"If the developer chooses to go with another [fibre-to-the-home] provider then they will pay Telstra for access to the pits and pipes via the existing access regime," a Telstra spokesman told iTnews at the time.

That offer remained on the table despite comments in the submission around ongoing uncertainty over access regulations.

"We do not charge for pit and pipe," a Telstra spokesman told iTnews.

But it would still seek assurances from the Government over the issue.

"The bill includes a bare power for regulations to be made setting up an access regime for fibre-ready passive infrastructure in development areas but does not set out principles or guidance as to the kind of regime that would apply," Telstra said in its submission.

"The bill fails to set out access pricing principles, reasonable limits on the obligation to provide access such as technical or operational limits on access, procedures for the resolution of disputes and appeal rights. All this is to be left to the Minister.

"Due to the application of this unknown access regime, even these assets are at significant risk of being uneconomic.

"Putting passive infrastructure into a broad range of developments across Australia will cost many hundreds of millions of dollars. Telstra requires some assurance that any consequential access regime would enable Telstra to recover those costs."