NBN turns opt-out for future builds

NBN Co has unveiled plans to automatically connect homes to the National Broadband Network in future construction builds in a move expected to save costs over the long-term but contribute to increased capital expenditure for the network build in the first several years.

The contentious build method, which NBN Co has been trialling for some years, will require users who do not want a fibre connection to the NBN to opt out from such construction, rather than opt in, as is currently the case.

Under the 'build drop' method, NBN Co will draw fibre from the street to a connection device on each house passed as part of NBN construction.

The fibre connection will remain dormant, however, until a user orders a connection to the network, at which point NBN Co will install a network termination device inside the home and connect the fibre.

"If I speak to people, which I did, for example in British Telecom and in other places, they say if you're take-up rate is above 20 or 30 percent it's smarter doing build drops," NBN Co chief executive Mike Quigley said.

"That's what we had in fact intuitively thought, that's what we saw from our trials and that's what we're going to go ahead and do."

Residents in fibre roll-out areas will be given the opportunity to opt out of a fibre connection, a measure NBN Co intends to advertise through improved communication with residential areas during construction.

Quigley said he anticipated that "once we've communicated to them, [they] will see this isn't costing them anything and it's setting them up to be connected".

"They'll know we're coming," Communications Minister Stephen Conroy said.

NBN Co's deal with Telstra means those in the fibre network footprint who do not allow a fibre connection will be without fixed-line access within 18 months of that area being deemed "ready for service" as Telstra progressively disconnects the copper network.

The opt-out method has been a contentious move since the beginning of network construction.

NBN Co trialled the build drop method during the first stage of construction in Tasmania in 2010 by allowing residents to sign up for a connection during the initial construction phase before such builds began.

The state later passed legislation requiring residents to opt out of an NBN connection — rather than opt in — for future builds on the island, but similar legislation has been knocked back in other states.

NBN Co has progressively ramped up moves to introduce the build drop method into wider construction, telling industry of its plans at forums held last November and hiring a project director in June for the task.

A spokeswoman for NBN Co confirmed it had not yet begun the opt-out method.

The revised three-year corporate plan for NBN Co, released this week, indicated the company expected to issue the build drops at all apartment buildings and greenfields premises, and expected only ten percent of existing stand-alone homes would opt-out of the fibre drop.

Those in the telecommunications industry suggested NBN Co could operate under the same auspices as Telstra, which oblige the incumbent to install and maintain copper infrastructure to the network boundary, usually situated inside or outside the home.

NBN Co's spokeswoman confirmed it would follow the same regulations.

A spokesman for shadow communications minister Malcolm Turnbull did not respond to questions at the time of writing.

However, on writing about the Tasmanian opt-out legislation in 2010, Turnbull said the move confirmed the NBN's reliance on "compulsion and the elimination of competing technologies".

"If Australian consumers want a fixed line for telephony or internet access, they are going to have to use NBN's line – like it or not," he said at the time.

Consumer organisation ACCAN has previously pushed for the opt-out approach, citing support from the National Community Titles Institute (NCTI) and Tenants Union.

In a policy statement (pdf) released early last year, the government-funded organisation said the opt-out process would recognise the NBN as a "replacement phone network" for the copper network once the latter was decommissioned, and should be treated as a utility.

"Ensuring availability of phone services alone will require an opt-out approach to the rollout," the organisation said.

The move to build drops is a major contributor to a $1.4 billion increase in capital expenditure expected for the NBN, and one of several changes in scope for the network build revealed in the updated corporate plan.

The company said the $800 million deal with Optus to migrate the telco's cable broadband customers onto the fibre network was unanticipated at the time of the first corporate plan two years ago, while movements on NBN Co's greenfields obligations and forecasted impacts of the mandated point of interconnect model also played a part.

Batteries become optional

Another significant change in scope for the project was the move to make back-up batteries for network termination devices in the NBN fibre footprint optional for the first time.

NBN Co was previously required to install a battery capable of powering the voice port on each fibre-based customer premises device on the network for up to eight hours, a move seen as wasteful by the Greens.

The company itself had reported the batteries were the highest source of complaints in user feedback surveys in NBN-connected areas.

Senator Conroy said consultation with emergency services organisations had led the Federal Government to change this requirement.

Instead, NBN Co will follow a similar process to Telstra's fibre rollout in South Brisbane, allowing users to opt-in to battery installation under an "informed choice" situation while automatically installing batteries at "priority assist" homes, required for medical purposes.

NBN Co expected up to half of all fibre-connected premises would opt to have the battery installed, potentially saving the company "hundreds of millions of dollars".

"What we found is that it's an estimated based on our input when we talked to people as we have done the trial sites," Quigley said.

The company has also considered allowing third parties to install their own batteries under a set standard for niche uses.