NBN Co to spend $700m on 240 'business fibre zones' across Australia

NBN Co is set to spend as much as $700 million creating 240 “business fibre zones” across Australia where every business in the area can get a fibre connection at “CBD zone wholesale pricing”.

The company will also qualify an additional 700,000 businesses for no-cost fibre builds, though these businesses don't get the cheaper pricing.

The announcement, made a day before the release of the next NBN corporate plan, means “nine in 10 businesses" - 1.4 million in total - will be able to order high-speed fibre broadband” from NBN Co, according to the government.

Having businesses located within ‘fibre zones’ removes one of the last pieces of complexity in NBN Co’s business offering.

As it currently stands, NBN Co zones business premises as either A, B or C, and this impacts their ability - as well as their cost - to have fibre deployed.

As iTnews has previously reported, NBN Co uses a ‘black box’ algorithm to determine if a business or collection of business sites qualify for free or deferred cost fibre.

No one outside of NBN Co really understands the mechanics of how the algorithm reaches its conclusions, creating uncertainty for retail service providers as they try to sign businesses up to NBN deals.

That will change considerably once 700,000 businesses are incorporated into “business fibre zones”, and an additional 700,000 premises qualify for free fibre builds.

“Businesses will be able to access premium-grade NBN business fibre services at no upfront build cost to their retail service providers,” Communications Minister Paul Fletcher confirmed.

NBN Co added: “NBN Co is pleased to announce today that when an internet retailer places an order for enterprise ethernet, for an estimated 90 percent of business premises in the national NBN network footprint, we will not charge the retailer for building the fibre. 

“Plus, if an internet retailer signs up for a three-year enterprise ethernet plan, we will not charge the retailer an upfront connection cost.”

The 700,000-plus businesses in the zones also qualify for the cheapest zoned pricing.

“For the first time, businesses outside capital city centres within these business fibre zones will have access to CBD zone wholesale prices, driving annual cost savings of between $1200 and $6000,” Fletcher said.

“Working with our industry partners, we believe these new initiatives will help open up the market for all internet providers,” NBN Co CEO Stephen Rue said.

Of the 240 business fibre zones, 85 are located in regional areas. NBN Co, however, did not announce all locations today, but instead only 130 of them.

Of these, 14 of the zones will be “centred around major hospitals, which will help facilitate the formation of globally competitive health precincts,” the government said, though NBN Co added only 11 of the 14 would be announced today.

The government also claimed the additional fibre deployment in the zones would create construction jobs over the next few years.

However, iTnews has confirmed that fibre deployment is subject to an order being placed; that is, NBN Co will still not speculatively build fibre to business premises in the hope they take it up.

NBN Co said it had also allocated $50 million over three years “to work with local councils and state and territory governments to identify opportunities to extend business-grade services outside” the designated zones.

The first 130 business fibre zones suburb list is:

NSW Metro (11)  

Botany, Gosford, Lake Haven - Wyong, Lane Cove, Mosman, Neutral Bay, Parramatta, Randwick, Marrickville, Double Bay - Rose Bay, Central Coast 

NSW Regional (23) 

Albury / Lavington, Armidale, Ballina, Batemans Bay, Bathurst, Charlestown, Coffs Harbour, Corrimal - Austinmer, Dubbo, Goulburn, Lismore, Maitland, Mudgee, Newcastle CBD, Nowra, Orange, Port Kembla - Warrawong, Port Macquarie, Tamworth, Taree, Wagga Wagga, Wollongong, Shoalhaven 

VIC Metro (13)  

Berwick South, Box Hill, Clayton, Collingwood, Dandenong, Mornington, Springvale - Noble Park, Burwood, Chadstone - Oakleigh, Caulfield - Carnegie, St Kilda - Elsternwick, Blackburn - Mitcham, Richmond - Hawthorn 

VIC Regional (12) 

Ararat, Ballarat, Bendigo, Echuca, Geelong, Horsham, Mildura, Shepparton, Wangaratta, Warrnambool, Wodonga, Morwell - Traralgon 

QLD Metro (10) 

Annerley, Archerfield, Coorparoo, Darra - Richlands, Eagle Farm, Mount Gravatt, Stafford - Alderley, Tingalpa, Morningside - Lytton, Indooroopilly - Toowong 

QLD Regional (13) 

Bundaberg, Caloundra, Gladstone, Gympie, Mackay, Maroochydore, Maryborough, Rockhampton, Southport, Toowoomba, Townsville area, Wurtulla - Birtinya, Cairns - Port Douglas 

TAS Regional (4) 

Burnie, Devonport, Hobart, Launceston 

WA Metro (17) 

Balcatta, Bassendean, Canning Vale - Riverton, Fremantle, Henderson, Malaga, Mandurah, Midland - Guildford, O'Connor - Murdoch, Osborne Park Industrial, Rockingham, Subiaco - Nedlands - Shenton Park, Wangara, South Perth, Bibra Lake - Coogee (WA), Applecross - Melville, Belmont - Cannington 

WA Regional (4) 

Albany, Bunbury, Busselton, Geraldton 

SA Metro (14)  

Edinburgh, Hawthorn - Malvern (SA), Hindmarsh, Lonsdale, Melrose Park, Mount Barker, Norwood (SA), Port Adelaide - Gepps Cross, Prospect area (SA), Richmond (SA), Toorak Gardens, Unley - Parkside, Woodville Park, Willunga 

SA Regional (1) 

Mount Gambier 

ACT Metro (4) 

Belconnen, Canberra CBD, Deakin, Phillip 

ACT Regional (1) 

Queanbeyan – Hume 

NT Regional (3) 

Darwin, Palmerston, Casuarina