Grey cloud hangs on NBN Co greenfields role

NBN Co is awaiting the passing of greenfields legislation before deciding whether to directly enter new housing estates and roll out optical fibre from July 1.

iTnews understands that private builders will pick up the lion's share of work on offer once fibre is mandated for greenfields estates - not least because NBN Co isn't yet a confirmed option available to housing developers.

Private builders are gearing up for a potential gold-rush as land developers will be compelled to roll out fibre networks to all new residents.

However, their gold-rush could be thwarted by a new short- to mid-term exemption to the legislative mandate that would allow developers to deploy just enough passive infrastructure (ducts, pits etc.) for the estate to be declared ‘NBN-ready'.

NBN direct

Communications Minister Stephen Conroy told a gathering in Melbourne last week that NBN Co could choose to enter new estates if it wanted.

"It has always been envisaged that NBN Co could service new [housing] developments, but that is something the company needs to consider in its planning and advise the Government on," Conroy said.

An NBN Co spokesman, however, seemed unsure of the company's position, telking iTnews it was "awaiting the outcome of the legislative process" before considering its role in greenfields estates.

"Once the legislation is passed we can assess our opportunities to be involved on greenfields," the spokesman said. "The legislation itself is a matter for Government."

Privates prepare

Network builder Comverge, meanwhile, gained its carrier license last week in readiness for predicted demand from land developers.

Marketing manager Dane Hansen believed that NBN Co was "not going to own" the mandated networks inside estates. Rather it would run backhaul links past the estate that the private builder, such as Comverge, could then connect to, he said.

"If you're in an existing suburb the NBN will come past your door - but in greenfields estates the Federal Government is saying to developers, ‘You put fibre in the ground now at your expense'," Hansen said.

But investigations by iTnews revealed private builders could be left responsible for the cost of the backhaul, too.

"It is envisaged that multiple providers - including NBN Co if it chooses - will compete to install infrastructure and offer a platform for the provision of retail services to customers," a spokesman for the Department of Broadband, Communications and the Digital Economy (DBCDE) said.

"The provider may or may not own or provide its' own backhaul."

This replicates the current arrangement in a number of estates.

Pivit chief Peter Thompson said his company had run its own dark fibre "back into the CBD on one site, bought managed services from the likes of Optus and Uecomm, and also built our own carrier-class microwave links to act as back up."

Thompson believes that NBN-owned backhaul might only emerge as a viable wholesale option "over time".

"The NBN rollout might start, but then we might do an estate where there is no NBN fibre [running past the estate] yet," Thompson said.

"The theory is that, over time, the NBN might be one of the wholesale options [we have available] and it might be better. But we're open to most options. None of them seem terrible."

In his address to the City of Whittlesea Local Government conference last week, Senator Stephen Conroy acknowledged the backhaul issue.

He said it would be dealt with in "subordinate legislation" rather than the legislative framework the Government planned to enact by July 1, 2010.

The subordinate legislation will also define the minimum size for a greenfields site to be subjected to the mandate and the term ‘planning approval', which governs the date the mandate takes practical effect for a land developer.

"Fibre ready"

The housing lobby has achieved some success in delaying the introduction of the mandate via its participation in the fibre-in-greenfields stakeholder reference group.

The Urban Development Institute of Australia had wanted the introduction of the fibre mandate delayed by a year as it believed the July 1 2010 timeframe could impact the viability of some estates.

It now appears to have had its wish granted.

Although the timing for the passing of the legislative framework wouldn't change, the phasing in of the new rules would.

The new timing hinged on the meaning of the term ‘planning approval' and how long a new exemption to fibre rollout in greenfields estates would run.

Citing information from the National Housing Supply Council, Conroy said last week that there were "six different stages in the [housing] development pipeline - from designation of a new land release area, down to development approval for a particular house and land package."

"Depending on which stage is chosen for the purposes of our subordinate legislation, it could take longer for the fibre requirement to take practical effect," he said.

Conroy also proposed "a more targeted and phased implementation" of the mandate "including the use of a 'fibre ready' obligation where fibre is not mandated in the short to medium term."

As it stands, the draft legislative framework gives Conroy the power to decide which estates are and aren't subject to the mandate.

He said that "a strong message from our consultations has been that if fibre cannot be immediately installed, there is benefit in having 'fibre-ready' infrastructure installed so that fibre can be more readily and cost-effectively rolled out in the future."

That would mean estate developers would be required only to deploy "ducting, pits and plinths for splitters" rather than engage a firm to actually roll out fibre.

"We will make sure our legislative framework is flexible enough to promote this," he said.

Stay tuned Saturday for part two of our report on greenfields rollout builds, which deals with all things price.