Outrage as govt suggests fibre carriers 'may' cut corners

The federal government has accused parts of the new housing industry and the mostly fibre-based telcos that service it of being tempted to roll out substandard infrastructure to save money.

In a consultation released quietly before Christmas, the Department of Communications proposed new conditions for carriers that service new housing estates and apartment blocks.

The conditions are intended to set minimum standards for infrastructure and services being built in new developments to ensure new home owners receive a network connection that is fit for purpose from day one.

The government said it wanted to protect property buyers and the NBN.

"The installation of poor quality networks could have a large impact on occupants in new developments and government, as developments that receive lower quality telecommunications infrastructure may need to have the situation fixed by overbuilding of any available network with the NBN," it said in an explanatory memorandum.

"The cost of such a solution would need to be recovered. Conversely, if a quality network is installed in the first instance, the additional cost and inconvenience to occupants could be avoided."

Urban Development Institute of Australia (UDIA) national president Michael Corcoran welcomed the proposed protections.

He said the conditions would protect housing developers by guaranteeing the carriers they contracted could "provide the service they have been contracted to provide."

Greenfield fibre anger

But fibre-based carriers servicing the new housing market have reacted angrily to the proposal.

Greenfields fibre operators and developers are incensed by the government's suggestion that they may be choosing to cut corners in a bid to save money.

"Developers and suppliers have an incentive to minimise costs in new developments to increase the profitability of their developments," the consultation states.

"As such, some developers may choose not to install quality telecommunications networks to reduce costs."

”Despite what the department thinks, developers are not disinterested in the outcome of telecommunications network deployments,” the Greenfields Fibre Operators Australia (GFOA) said in a submission obtained by iTnews.

GFOA represents OPENetworks, RedTrain Networks, LBN Co, Pivit and Comverge Networks, who deploy fibre optic cabling to new developments.

It argued its members had no reason to cut corners because they want to offer services – either wholesale or retail – on top of their own networks.

“Carriers do not build networks to sell them,” GFOA said.

“They build to operate the networks and if they were to include substandard components in that infrastructure then they are likely to pay higher costs for repairs and replacements of those components.

“If nothing else than for self-interest, private carrier operators of wholesale networks genuinely want the best quality networks that they can build.”

GFOA argued that any price pressure its members face to cut costs was the direct result of government policy related to the national broadband network.

NBN charges developers a nominal fee - $400-$600 per premises, plus an optional share of backhaul costs - to deploy telecommunications infrastructure in new estates.

Private companies say they have been forced to heavily subsidise prices to meet or better NBN’s low rates.

GFOA also criticised the lack of "evidence" and "factual substantiation" for the new conditions in the government's consultation.

"In the past, residents have written to their local members and the Minister for Communications about poor broadband outcomes in their new developments," the government's consultation states.

"The former minister and the department have also received a number of complaints about other providers for poor delivery of services in their developments, the lack of choice of RSPs over the network and pricing."

Four options

The government is tabling four options to remove the temptation it believes exists for developers and the carriers that service those estates to cut corners.

It wants to establish carrier license conditions (CLCs) that would set minimum technical standards that need to be independently certified as being met.

The CLCs would also force much smaller operators to meet the “mandatory connection and fault repair times” imposed on NBN under the special access undertaking (SAU) and Telstra under the customer service guarantee (CSG).

NBN and Telstra – who act as the ‘provider of last resort’ to most estates and apartment blocks – would be exempt from the new CLCs, as would any non-carrier licensed deployers of infrastructure.

Telstra’s exemption is likely to raise eyebrows after it was recently revealed the telco was deploying new copper connections – not fibre – in as many as 400 new estates.

The GFOA has argued the proposed license conditions should be scrapped in favour of voluntary industry codes and potentially legislation if it were to have “industry-wide application”.