Saturday, May 30, 2009

Fibre-to-the-premises in greenfield estates

The Department of Broadband, Communications and the Digital Economy issued a "National Broadband Network: Fibre-to-the-premises in greenfield estates - Consultation paper" 29 May 2009. The paper is available as a 23 page, 482 Kbyte PDF document. Submissions on the paper can be made until 12 June 2009.

One point the paper makes is that battery backup will need to be provided for the equipment on the customer premises. The paper suggests that maintenance for this is likely to be the consumer's responsibility by analogy with fire alarms and smoke detectors. However, there are many documented cases of deaths due to not correctly maintained fire alarms and smoke detectors. It may not be good public policy to apply this to the NBN knowing that the system is then likely to fail in an emergency, such as a bushfire.

Unfortunately the Department has made the paper difficult to find and obtain by placing it behind a registration process which requires the reader to enter their name, email address and organisation name. There appears to be no good reason for this process, which appears to be contrary to government policy for access to information. Here is an excerpt from the paper, minus the diagrams and some administrative details of the consultation process:


  • Purpose of this paper
  • Related processes
  • The goal: fibre in greenfield estates
  • Policy rationale
  • Recent Australian developments
  • The costs and benefits of providing telecommunications in greenfield estates
  • Delivering FTTP technology in greenfield developments
  • Role of government
  • Other roles and responsibilities
  • Possible legislation
  • Definitions
  • Greenfield estates
  • Multi‑dwelling units and office blocks
  • Fibre‑to‑the‑premises
  • Exemptions
  • Commencement date
  • Competition and regulatory framework
  • Competition to service greenfield estates
  • Competition at the services layer: access and equivalence
  • Open access arrangements
  • Equivalence
  • Obligations to supply retail services
  • Retail pricing
  • Other safeguards and requirements
  • Reporting
  • Enforcement
  • Next steps
  • Submission process
  • Publication of submissions
  • Confidential information
  • Privacy
  • Lobbyists

Purpose of this paper

On 7 April 2009 the Australian Government announced it will establish a new company that will invest up to $43 billion over eight years to build and operate a National Broadband Network (NBN) delivering superfast broadband to Australian homes and workplaces.

The Australian Government is committed to implementing the National Broadband Network initiative as quickly as practicable. While some parts of the initiative will take time to put in place, due to their magnitude and complexity, there are some immediate steps that the Australian Government can undertake quickly and that will deliver significant benefits.

One of the immediate steps the Australian Government announced was that fibre‑to‑the‑premises (FTTP) infrastructure would be required in greenfield estates that receive planning approval after 1 July 2010.

The Australian Government is undertaking a targeted consultation process with key stakeholders on how to implement this initiative.

This paper has been prepared to assist with this process by setting out possible approaches and highlighting particular areas where the views of stakeholders are being sought. The Australian Government recognises this is a complex area and views on the best approach may differ. The options put forward in this paper, therefore, should be seen as a starting point for discussion, and on which feedback is welcome. A number of questions have been posed on a wide range of issues, but the Australian Government is also interested in any additional issues respondents may wish to raise in relation to this initiative.

Written feedback on this paper is invited by 5pm (AEST), 12 June 2009.

Related processes

The Australian Government’s greenfields policy forms part of the NBN initiative announced on 7 April 2009. Another key element of the NBN initiative is to reform the existing telecommunications competition and consumer regulatory frameworks in the transition to the NBN.

The reform options that the Australian Government is considering are canvassed in the regulatory discussion paper, National Broadband Network: Regulatory Reform for 21st Century Broadband1 and submissions are due by 3 June 2009.

Any changes to the regulatory framework resulting from this process will take into account the Australian Government’s new greenfield fibre policy. On the other hand, where relevant, changes resulting from that regulatory review process may apply to service providers operating FTTP networks in greenfield estates.

The Australian Government has indicated it will make final decisions on the operating arrangements, detailed network design and private sector investment arrangements for the company established to roll‑out and operate the NBN following consideration of an Implementation Study to be completed in early 2010. The Implementation Study is also relevant to the implementation of the greenfields policy.

As part of its announcement of an enhanced NBN on 7 April 2009, and as set out in the discussion paper, National Broadband Network: Regulatory Reform for 21st Century Broadband, the Australian Government will require the installation of fibre optic infrastructure to the home and workplace in greenfield estates across Australia that receive planning approval from 1 July 2010.

FTTP networks (also sometimes referred to as fibre‑to‑the‑home) are those which connect customers’ premises to a point of interconnection in the wider telecommunications network using optical fibre (see Figure 1).

Figure 1 An illustrative example of FTTP network architecture.

FTTP networks are capable of providing significantly faster broadband speeds and a broader range of services to end‑users than copper‑based networks.2 Faster broadband speeds will mean better access to the services and applications people use today and access to a greater range of new services in the future.3

It will be important that FTTP networks are configured in such a way that they can be upgraded to meet future requirements, facilitate any‑to‑any connectivity (i.e. the ability to communicate with other people connected to the network and other networks) and support multiple retail competitors.

Policy rationale

Given the superior properties of FTTP networks and the range of services they can support, it would be counter‑productive to have homes and other premises built in new greenfield developments with the latest building technology but connected by antiquated copper wires. Equally it does not make sense to roll‑out the NBN while allowing new premises in greenfield estates to be connected with old technology.

Allowing copper‑based networks to be installed in these estates would also lead to higher costs in the long run if these estates need to be ‘retro‑fitted’ to deploy FTTP connections in the future. Moreover, there is evidence that consumers attribute a significant positive value to the availability of FTTP infrastructure in a new estate which is capitalised into the value of the property.

The installation of FTTP in greenfield estates will ensure that today’s greenfield estates are not tomorrow’s broadband blackspots. There has been community concern, and Ministerial correspondence, about broadband blackspots over an extended period of time. There has also been concern raised about the lack of broadband infrastructure and competition in some developments. Ensuring that appropriate broadband infrastructure is in place will prevent this in the future.

The rationale underpinning the Australian Government’s greenfields policy has been welcomed by a range of stakeholders including the Australian Telecommunications Users’ Group and the Australian Local Government Association. The Online and Communications Council has also endorsed a strategy of ‘promoting consistent and cohesive planning guidelines for state and local government authorities, and effective infrastructure implementation, that facilitates the efficient deployment of broadband.’4 The Australian Government’s FTTP in greenfields policy aims to support this strategy.

Recent Australian developments

In parts of Australia the private sector is already moving to install FTTP networks in new greenfield estates.

For example, the Aurora estate in Victoria, the Fernbrooke estate in Queensland, the Marina Hindmarsh Island estate in South Australia and the suburb of Forde in the ACT are developments that include FTTP networks. In each example the networks are being installed by different carriers.

Overall, the available information suggests that FTTP is currently being deployed in around 120 greenfield estates in Australia. These deployments are expected to connect approximately 150 000 homes. An estimated 7500 homes were connected at December 2008. There are more than 10 operators now installing FTTP in greenfield estates and a number of service providers using this infrastructure to offer services at the retail level.

The installation of FTTP is taking place in a competitive context, with developers typically contracting out the provision of infrastructure and services in developments. In areas where the FTTP infrastructure provider does not provide retail services, arrangements are increasingly being put in place to ensure partnerships exist with retail providers to deliver services to consumers.

Additionally, local government and planning agencies are encouraging developers to install FTTP infrastructure and services in new estates through various means. For example:

  • the ACT Land Development Agency held a tender process for the construction of broadband infrastructure in the new suburbs of Forde and Franklin

  • under its planning powers the City of Whittlesea requires fibre optic conduit to be installed in new estates, and

  • the Sunshine Coast Regional Council has developed draft guidelines to assist developers with the roll‑out of fibre, including draft pit and conduit specifications, a draft smart building guideline and detailed information on what products are needed to provide FTTP.

The Australian Government is keen to build on these trends and encourage their continuation in new greenfield estates.

As noted, some local councils already have plans in relation to the installation of FTTP in greenfield estates. Others may wish to introduce such requirements before the Australian Government’s policy takes effect on 1 July 2010. The Australian Government would not wish to discourage such developments, and will work with all levels of government to promote consistency of requirements around installation of FTTP in greenfield estates.

The costs and benefits of providing telecommunications in greenfield estates

The cost of providing terrestrial-based telecommunications in greenfield estates today depends on the network technology deployed. One option is to install a legacy copper‑based network which can simply provide telephony services or can also provide fixed broadband services. Alternatively, a more sophisticated FTTP network can be installed.

Installing any telecommunications infrastructure in a greenfield estate involves costs that must be recovered. Currently these costs are typically shared between the developer, the carrier and the builder but ultimately they are passed through to consumers, for example, through land prices, building costs, up‑front installation costs or monthly charges. This needs to be kept in mind when considering the relative costs of different telecommunications solutions in greenfield estates.

The installation of copper and FTTP networks in greenfield estates involves many similar cost components. For example, both types of networks typically require backhaul capacity, trenching, pit and pipe infrastructure and distribution cabling. These elements are comparable in cost and make up a large proportion of the total costs of installing these networks.

There are, however, different elements required for a copper‑based network compared to a FTTP network.5 While elements can vary, when a like‑for‑like comparison is made, available estimates indicate that the cost per premises of a FTTP connection is higher than the cost per premises for a broadband‑capable copper‑based connection.

However, the cost difference is relatively modest compared to the total value of the house, the life of the investment and when considering the increased functionality of future‑proofed FTTP networks. The available evidence suggests the cost differential is in the order of $1500 per premises. At an estimated cost of $2500 per premises, the installation of FTTP would represent less than one percent of the cost of a $350 000 house and land package. The total cost per premises is comparable to, or even lower than, the cost of other utilities installed in greenfield estates.6

Often the modest size of this cost difference between copper and FTTP appears to be obscured by the different ways in which costs are currently recovered. While the costs of providing other utilities in greenfields are generally met by the developer (at least in some states), historically Telstra has provided key elements of the copper network and recovered the cost through its connection/installation and ongoing service charges, while developers cover other costs such as trenching.7

By contrast, when FTTP is installed, the provider typically seeks to recover a greater proportion of its installation costs up-front from the developer. This has created the perception that the cost difference to the end user between FTTP and copper is greater than is actually the case and this may have distorted developers’ decisions about what telecommunications technology to deploy.

While there is a greater cost associated with the installation of FTTP compared to copper, the available evidence suggests this is more than outweighed by the superior benefits of FTTP, particularly over the long term. This is reflected in the impact of FTTP on property values. The available information, including on international experience, suggests that consumers in new greenfield estates place a high value on the availability of FTTP and that this translates into higher capitalised house and land values compared to if legacy communications infrastructure is made available.

A small survey was undertaken by the Gungahlin Community Council in Canberra in August 2006 by Kevin Cox in association with Robin Eckermann. The survey asked respondents to indicate how they would react if a developer who had planned FTTP advised prospective buyers he had decided not to proceed with FTTP, but was willing to offer a discount on the house and land package. More than 60 per cent of respondents indicated no offer would be satisfactory; instead they would buy elsewhere. Of the remainder, 80 per cent indicated they would not proceed without compensation of at least $5000.

This is broadly consistent with evidence from developers in the US that indicates that consumers place significant value on having access to services delivered over FTTP infrastructure in greenfield estates. For example, a Fibre‑to‑the‑Home Council survey of home buyers and home developers in the US estimated that a direct fibre connection adds an average of more than US$5000 to the value of a home.8

It is also consistent with the increasing interest in FTTP from developers and carriers around Australia and overseas which indicates they see value in the deployment of FTTP technology in new estates, and that this is being advertised as a selling point.

For example, Telstra has stated:

‘There’s a real appetite in new estates for fibre, and the developers—quite rightly—see fibre as being a future‑proof technology. So they can use that to add value to their development, and they’re keen to put it in there.’9

The website for the Lochiel Park estate in South Australia states:

‘Fibre optic cabling throughout Lochiel Park will deliver high speed broadband to every home. This will enable video on demand, telephony, VoIP or voice over internet protocol, a community portal and high speed internet services. New purchasers will be offered an initial start‑up package.’10

Delivering FTTP technology in greenfield developments

The model which is adopted for the implementation of the fibre in greenfields initiative will be applied on a national basis. Therefore, greenfield estates in Tasmania will be subject to the same regime as the rest of the country, notwithstanding the early roll‑out of the NBN in that state.

Broadly, there are two potential models to ensure that FTTP infrastructure is installed in new greenfield estates that receive planning approval from 1 July 2010:

  1. the Australian Government could legislate to directly require developers to ensure pit, pipe and FTTP infrastructure and services are available to consumers, or

  2. the Australian Government could work with state, territory and local governments to require the installation of FTTP and could support this with legislation to prohibit the installation of non-fibre networks in greenfield estates.

Model 1 would have the benefit of directly requiring FTTP networks to be installed. However, it may not always be clear on whom the obligations should be placed, for example in a development that involves a number of developers or other entities at different stages of the process, or where local government or state planning bodies themselves may be involved in the development process. For this model to work effectively it will be necessary to identify particular stages at which FTTP must be installed. This may lead to a situation where developers are prevented from selling properties that do not have an FTTP connection.

While model 2 does not directly mandate the installation of FTTP, it recognises and leverages off the role that local governments and planning authorities already play in provision of utilities in greenfield developments. This may be appropriate as requiring FTTP in greenfields is essentially a planning requirement and therefore most appropriately dealt with under planning laws. Developers are most likely to be familiar with these laws and there is immediate contact between developers and local government. The Commonwealth could support this with legislation to prohibit the installation of non-fibre networks in greenfield estates.

Considering these options, the Australian Government considers that model 1 may be unduly cumbersome and therefore model 2 is the suggested approach. However, the Australian Government is seeking feedback on this issue.


1.What are the relative merits of the models outlined? Which is the preferable approach? Why?

Role of government

If model 2 is adopted, the Australian Government would work with state, territory and local governments to include requirements to facilitate the deployment of optical fibre in greenfield estates. Even if model 1 were adopted there may still be an important role for state, territory and local governments in providing clarity to developers and other stakeholders given their close engagement with them.

To assist with the implementation of this national initiative, the Australian Government could work with state, territory and local governments on the development of planning laws, by‑laws and planning guidelines. The Australian Government could undertake a range of measures to support the implementation of such requirements, such as:

  • assisting with the development of model laws, templates for planning requirements and network and in‑building cabling specifications for use by planning authorities

  • facilitating the development of national guidelines for network design, and

  • developing educational tools for relevant industry participants, builders and consumers on the new requirements.

In addition to assisting local councils and planning authorities, the development of such tools could help provide consistent requirements between local government areas, reducing compliance costs for developers who work across council boundaries.

State and territory planning laws could require developers and builders, as appropriate, to ensure:

  • pit and pipe infrastructure is installed that would be appropriate for the deployment of FTTP and which, potentially, would allow competitive infrastructure provision in the future (for example sufficient space for more than one cable)

  • appropriate FTTP infrastructure is installed ready for connection to new premises

  • appropriate cabling is installed within new premises to allow practical use of FTTP capability

  • open access wholesale services are available on a non‑discriminatory basis, and

  • retail services are available from at least one retail provider.

Large greenfield estates often include commercial centres, schools, medical clinics and other community facilities which may need higher grade services than residential customers. The Australian Government considers e‑health and e‑education will be important users of superfast broadband. Planning requirements may also need to ensure the FTTP requirements of such users are factored into developers’ and service providers’ planning.

The provision of telecommunications services is generally outside the core business of developers. As such the Australian Government envisages, as is increasingly the case already, developers contracting out the provision of these services on a competitive basis to relevant commercial firms. A key issue for developers would be to select arrangements that provide for the ongoing provision of services. In this context, as noted, the Australian Government expects the increasing development of integrated build and operate packages for developers by telecommunications service providers.


2.Is any action required by the Australian Government to facilitate local councils and planning authorities requiring the installation of FTTP facilities?

3.Would the preparation of model laws, templates and/or national specifications or guidelines assist local councils and planning authorities with implementation?

4.Would the development of educational tools for industry assist? If so, what?

5.Would the introduction of a certification system for the installation and performance of FTTP networks be beneficial?

6.To what extent is a nationally co‑ordinated approach preferable to one where state and territory or local governments take the lead?

Other roles and responsibilities

Figure 2 summarises the types of obligations that could apply to FTTP in greenfield estates, on whom they could fall and the source of these obligations.


Party obliged to comply

Source of obligation



Local government planning rules

Pit and pipe infrastructure


Local government planning rules

FTTP infrastructure


Local government planning rules

In‑building cabling


Local government planning rules or building codes

Wholesale services


Developer’s contract

Retail services

Carriage service provider

Developer’s contract

Figure 2 Summary of possible roles and responsibilities.

Entities responsible for the FTTP infrastructure used for the supply of services to the public would be carriers. As such they would also be subject to carrier requirements under telecommunications and trade practices law. Entities providing services using their own or other infrastructure would be carriage service providers and, again, they would be subject to the applicable regulatory arrangements under telecommunications and trade practices law.

The Australian Government recognises that there may be multiple developers involved at different stages of a development and that builders may be responsible for the final communications connections into buildings. Careful consideration will need to be given to the nature of the obligations throughout the development process.

Generally, it is expected that FTTP infrastructure to the property boundary would be installed at the same stage of development as other utility infrastructure. Connections to premises would then be made at the time the building is constructed just as other utilities are connected. Given the importance of communications in today’s world, it makes sense for premises to be communications‑ready at completion. Such an approach would also avoid the expense and inconvenience of retro‑fitting at a later date. The Australian Government understands connections in greenfields are typically done by the FTTP infrastructure provider or its contractor but views on whether this could be made a contestable market would be of interest.

With FTTP, battery backup systems need to be provided for lifeline services in the event of power failure. It would need to be made clear who is responsible for maintaining and testing batteries. This responsibility is likely to rest with consumers, the same way that it does with other safety equipment, such as fire alarms and smoke detectors.


7.If the Australian Government were to place obligations on developers and builders, at what stage of development should obligations be placed and on whom?

8.Is there scope for the provision of lead-ins in greenfields to be made contestable?

Possible legislation

If model 2 were adopted, it could involve the amendment of the Telecommunications Act 1997 (Telecommunications Act) to prohibit the installation of line links11 to premises in greenfield estates unless those links are fibre optic and have specified characteristics. Specific characteristics of the fibre links could be set out in regulations. This is an area where the conclusions of the Implementation Study may be important. Requirements of this kind could be replicated, if appropriate, in state, territory and local government planning documents of the type discussed above to provide guidance for developers.


A number of definitions will be important to the operation of any possible greenfields legislation.

Greenfield estates

The Australian Government considers that FTTP networks should be installed in greenfield estates regardless of whether the development is zoned residential, business, commercial, industrial or mixed use. The requirement would also include major urban in‑fill projects.

That said, an open question for consideration is how a ‘greenfield estate’ should be defined in this context. Current thinking is that there should be a minimum number of lots for the FTTP requirement to apply, but that this number should be as low as possible to avoid gaps in FTTP coverage. The Australian Government is seeking feedback on this issue.

In terms of the boundaries of a greenfield estate, the Australian Government envisages these would be as set out in the planning approval concerned.

The Australian Government considers that in the case of staged developments or those involving multiple developers developing smaller parcels, the number of lots or premises would be determined based on the total across all stages of the development. However, it acknowledges that some developments may be rolled out over an extended period and that this would need to be recognised in greenfields FTTP arrangements. A holistic view of such developments could be taken through appropriate strategic planning documents of local government or planning authorities.

As noted the Australian Government envisages that the greenfields FTTP requirements would apply across Australia, subject to the definition of what is a greenfield estate. Such an approach could be subject to an exemption power to deal with exceptional cases or cases where the installation of FTTP is not practical.


9.What is the appropriate number of lots or premises required for a development to qualify as a greenfield development requiring FTTP? What other issues or factors should inform the definition?

10.What mechanisms could be used to achieve a consistent approach across large developments involving multiple developers and/or over an extended period of time? For example, what provision should be made in relation to estates in which lots are released over a number of years?

Multi‑dwelling units and office blocks

It is envisaged that multi‑dwelling units, such as flats or office blocks, where the number of units or offices meets or exceeds the number of premises that would constitute an eligible greenfield estate would also require the installation of FTTP. Alternatively, given the potential cost and difficulty involved in retro-fitting wiring in multi‑dwelling units, a lower threshold could be set.

The appropriate point for termination of the optical fibre would depend on the size of the development. However, in all cases in‑building distribution that allows all units to receive services of at least 100 Mbps would be required.


11.Are there any special requirements for multi‑dwelling units or office blocks?

12.Should the threshold for the connection of FTTP for new multi-dwelling units be lower than other estates or should all new multi-dwelling units be connected with FTTP? What threshold, if any, should apply?


The Australian Government considers FTTP to mean infrastructure that provides for the connection of single dwellings or individual premises within multi‑dwelling units with fibre optic cabling from the optical fibre distribution centre to an optical network terminator (ONT) located at the customers’ premises (or similar equipment in multi‑dwelling units). Legislation would be able to provide for characteristics of FTTP networks in greenfields to be specified more fully in regulations.

The network should also include backhaul to an appropriate point of interconnection to the wider telecommunications network to provide for any‑to‑any connectivity and to support effective retail level competition. Depending on the development’s location, such points of interconnection may be a considerable distance or there may be a lack of competitive alternatives. The Australian Government has recognised the importance of backhaul in the provision of high quality FTTP services. The Implementation Study will consider the backhaul needs of the NBN company. The NBN initiative also includes a program to provide funding for existing backbone blackspots.

FTTP networks in greenfield estates should be capable of providing up to 100 Mbps over each connection and be upgradeable and scalable. A clear upgrade path to faster speeds is considered desirable. It is also expected that business grade services would be available to commercial and other relevant premises within estates.

The Australian Government is disposed to allowing providers flexibility as to how these outcomes are achieved. At the same time, however, it wants to ensure FTTP roll‑outs are future proof and interoperable and have a high degree of consistency across Australia. As noted above, the Australian Government could look at introducing templates, specifications or guidelines to this end.

The Implementation Study will also be important in establishing details of this definition.


13.What specified characteristics should be considered for the purposes of defining FTTP for greenfields?

14.Are there particular issues in relation to backhaul between the greenfield estate and point of interconnection to a national network that need to be considered?


The Australian Government acknowledges that there may be certain circumstances where it may be necessary to provide exemptions to the requirements for FTTP networks in greenfield estates. It is envisaged that the proposed arrangements could be constructed to give States or Local Councils some discretion in their planning approval process concerning the classification of developments as greenfield estates and the type of line links that can be installed. The Australian Government recognises that any exemptions may be more applicable in areas outside the fibre footprint of the NBN.


15.What exemption arrangements, if any, would be appropriate and how should they be administered?

16.Are there any particular circumstances under which developments should be exempt from the Australian Government’s requirements for FTTP in greenfields (for example, for large area subdivisions in rural and remote Australia)?

Commencement date

The Australian Government has indicated that the requirement to install FTTP in greenfield estates will apply to developments which receive planning approval on or after 1 July 2010.

In the case of developments that receive approval before 1 July 2010, there may be delays between the approval and the construction and sale of buildings. Therefore transitional measures may be appropriate.

Developments approved prior to 1 July 2010 but in which construction has not commenced or for which the provision of telecommunications infrastructure has not been contracted by 1 July 2010 could also be prohibited from installing networks that are not fibre optic except in exceptional circumstances.

Similarly any stages of multi‑stage developments approved prior to 1 July 2010 but in which construction has not yet commenced or in which the provision of telecommunications services has not yet been contracted could also be prohibited from installing networks that are not fibre optic except in exceptional circumstances.


17.Are there any factors that the Australian Government should be aware of in relation to the commencement of FTTP requirements?

18.Under what circumstances, if any, should transitional arrangements allow for the installation of copper–based infrastructure?

19.Should the FTTP requirement apply to developments approved before 1 July 2010 but for which telecommunications infrastructure has not yet been contracted or provided? What transitional arrangements may be appropriate in these circumstances?

Competition and regulatory framework

The Australian Government wants to continue to encourage trends towards private investment in FTTP in greenfield estates. Therefore, it is not the Australian Government’s intention that the NBN overbuild FTTP deployments in greenfield estates where these estates enjoy outcomes comparable to those to be delivered by the NBN. The Implementation Study will examine how the Australian Government can work with existing FTTP providers in greenfields.

In the longer term it might well be that the NBN company would compete with other providers for the contract to supply FTTP infrastructure and wholesale services in greenfield estates. This however, would be a matter for the NBN company.


20.Is the Australian Government’s intention that the NBN company not overbuild existing FTTP developments in greenfield estates appropriate?

21.Are there any specific issues that should be considered in relation to the role of the NBN company in greenfield estates?

More generally however, the Australian Government wants to continue to encourage the competitive supply of FTTP facilities and services in greenfield estates. Such competition can occur at a number of levels.

Competition to service greenfield estates

Competition can occur in relation to the installation of FTTP infrastructure in a greenfield estate. For example, developers can put to tender, or contract, for the provision of FTTP infrastructure in their developments to find the best solution for their needs. This is increasingly common. The Australian Government sees benefits in this continuing and will seek to encourage these developments.

Such competition may be facilitated by councils requiring the developers to install appropriate passive infrastructure such as the pit and pipe (i.e. conduit) networks during the construction of the estate. This is an approach that Whittlesea City Council has employed.12

Longer term infrastructure-based competition may also be fostered if such passive infrastructure is designed to support multiple providers of fibre. However, given the capacity of a single fibre network and its potential natural monopoly characteristics, it is unclear that competing fibre operators will readily emerge in greenfield estates and requiring such an investment may be wasteful.

Where access to pit and pipe infrastructure is required, it can be sought through the existing facilities access regime in Schedule 1 of the Telecommunications Act which provides for a carrier to access the infrastructure, such as ducts, of another carrier where there is sufficient capacity. The Australian Government is currently considering changes to this regime as part of its broader regulatory review process.


22.What measures could the Australian Government introduce to facilitate competition for the provision of FTTP infrastructure in greenfield developments?

23.Could the competitive provision of FTTP in greenfields be facilitated by a national online database of proposed developments accessible either publicly or to licensed carriers? Could this also assist with the planning of telecommunications infrastructure in such estates?

Competition at the services layer: access and equivalence

Given the likelihood that infrastructure‑based FTTP competition in greenfield sites may be limited, particularly in the short to medium term, the Australian Government wants to ensure that there is genuine open and equivalent access to wholesale services on bottleneck infrastructure in both new and existing greenfield estates. This includes access to wholesale services on equivalent price and non‑price terms and conditions. This will promote effective competition and choice in the delivery of services which will lead to better outcomes for consumers in these estates.

From the perspective of ensuring a competitive environment, the Australian Government does not consider that developers or FTTP service providers should be able to insist on exclusive wholesale or retail arrangements in greenfield developments which restrict entry of alternative providers. The Australian Government considers that customers are keen to have a choice of retail providers and are critical where developments do not have this feature.

Open access arrangements

To facilitate service-based competition, at a minimum, carriers providing FTTP services in greenfields would be subject to the access framework (as they potentially are now) set out in Part XIC of the Trade Practices Act 1974 (Trade Practices Act). Any reforms made to Part XIC as part of the current review process would necessarily have regard to the operation of the new greenfield requirements.

Under Part XIC, the Australian Competition and Consumer Commission (ACCC) can declare services provided over FTTP networks if declaration is found to be in the long term interest of end-users, thereby subjecting them to open access arrangements.

In the case of a FTTP network in a greenfield estate, this may, for example, require the declaration of a new bitstream access service which would allow retail providers to configure their services as desired, or resale type services which could include services providing voice, data (internet) or multicast video. Intermediary wholesale providers could also access such services, repackage and on‑sell them. Any relevant declaration by the ACCC could apply to existing FTTP networks in greenfield estates as well as new ones, addressing concerns about access to existing FTTP networks.

An alternative approach could be to legislate that all FTTP greenfield networks are open to access by all access seekers as a matter of course. This could occur through the identification of appropriate services for the purposes of Part XIC, for example, under statute or a new type of subordinate instrument.13 Terms and conditions of access could then be determined through the processes applying under Part XIC.

We welcome proposals on possible alternative access arrangements for greenfield estates but note that these would be considered in the context of the broader regulatory review. A matter that would need to be considered is whether multiple access regimes could emerge that could prove difficult and costly to administer.


In addition to services being accessible to access seekers, the Australian Government considers that access needs to be provided on equivalent terms so that all access seekers can compete on an equal footing in the retail market. This is a central theme in the Australian Government’s overall NBN reform package.

The most effective way to ensure genuine equivalence of access would be to ensure that FTTP infrastructure installed in greenfields from 1 July 2010 is operated on a wholesale‑only basis. This would be consistent with the NBN which will operate as a wholesale‑only network. The advantage of a wholesale‑only model is that it would ensure that retail service providers are not unfairly disadvantaged in competing for customers in the retail market. In turn, this would drive genuine competitive outcomes and choice in the interests of consumers.

This type of model is already in operation in Australia. For example, Opticomm is rolling out FTTP networks in Fernbrooke in Queensland, University Hill in Victoria and Lochiel Park in South Australia which it operates on a wholesale‑only basis. Competing retail providers will use these networks to supply internet, telephony, pay TV, free to air TV and other services to consumers in these estates. In Fernbrooke estate, Queensland, for example, there are already two competing retail providers, Cirrus and Internode, and more are expected.

An alternative approach would be to allow FTTP network operators in greenfields to also operate in the retail market providing there is an effective regulatory framework in place to ensure that all retail providers can receive equivalence of access. Suitable arrangements could be developed as part of an integrated package that could be put to developers by prospective FTTP providers. In Canberra, for example, TransACT has deployed FTTP and also provides retail services on the network, while offering access to other retailers.

While an integrated model may offer benefits to the operator, it will not necessarily guarantee wholesale services are provided on an equivalent basis as the FTTP network operator has the incentive to favour its own retail business.

The Australian Government will consider submissions from interested parties on how equivalence in greenfields can best be achieved.

The Australian Government recognises that a number of FTTP providers that have already rolled out FTTP networks in greenfield estates also provide retail services to consumers in these estates. In addition to TransACT, for example, nationally, Telstra has deployed FTTP in some greenfield estates where it delivers its Velocity service package. A question for consideration is whether new equivalence requirements being considered as part of the broader regulatory review could become relevant to these networks as the Australian Government on the basis that it is important consumers in these estates also enjoy the full benefits of competition.


24.Is it sufficient for access to wholesale FTTP services in greenfield estates to be delivered through the telecommunications‑specific access regime in Part XIC of the Trade Practices Act?

25.Should the ACCC conduct a Part XIC inquiry into the specification/definition of the access service to be supplied over FTTP networks, with particular reference to greenfield estates?

26.Should an alternative approach to providing access such as mandatory access to FTTP networks in greenfield estates be adopted? If so, what? Why?

27.Should it be mandatory that new FTTP networks in greenfield estates after 1 July 2010 be wholesale‑only networks? If introduced, should there be exceptions to this type of rule and if so how should they be administered?

28.What are the minimum equivalence arrangements that should be put in place to ensure wholesale services are provided on equivalent price and non‑price terms and conditions in greenfields?

29.Would it be appropriate and workable to have different access and equivalence arrangements for greenfield FTTP networks depending on whether or not they were operating before 1 July 2010?

Obligations to supply retail services

Using FTTP deployments in new greenfield estates, retail providers will be able to supply a range of retail services to end users, including voice, broadband and content services.

With the entry of new infrastructure and service providers in greenfields, the issue arises as to whether existing universal service arrangements which safeguard the delivery of telephony services should be revised for these areas.

In the absence of changes to the existing USO, Telstra would remain obliged to ensure reasonable availability of a standard telephone service on request in new greenfield estates, even where an alternative provider has installed an FTTP network. Under this scenario, Telstra could seek access to the FTTP infrastructure to provide these services. Alternatively it would remain free to determine the technology (other than copper‑based networks if these were precluded by new legislation) it uses to fulfil its USO. In the absence of any modification of the USO, it would be Telstra’s commercial decision to offer other services (e.g. broadband internet) in the estate.

An alternative is that, in the event that a FTTP network is installed by another carrier and there are other retailers offering services on that network in a greenfield development, Telstra could be relieved of its obligations as the universal service provider and these obligations could be transferred to another party. In this scenario, any changes made to the USO requirements in these areas may need to be contemplated in the context of the broader regulatory review.

Retail pricing

The wholesale pricing arrangements that are put in place under the open access model proposed above would form the basis for the level of retail pricing. It is therefore important that effective wholesale arrangements are in place, including regulatory oversight, to ensure that consumers benefit at a retail level. It is envisaged that, where relevant, access prices would be subject to ACCC oversight through the operation of the Part XIC regime. Moreover, as discussed above, pricing would be a factor that would generally be considered in the selection of a provider to roll‑out FTTP infrastructure in a greenfields estate.

If Telstra were a retail provider on the greenfields FTTP infrastructure, it would be subject to the price control arrangements that would apply to it generally. Currently, other retail providers would not be subject to direct price regulation. However, the proposed model envisages strong competition between retail providers to keep downward pressure on prices at this level. Whether greater regulation of prices in greenfield estates would be necessary or workable, would need to be considered in the broader regulatory context. Nevertheless views are welcome on this issue.


30.Should Telstra continue to be the universal service provider in greenfield estates where FTTP is deployed by an alternative provider and retail providers are able to use these networks to supply voice services?

31.If Telstra should continue as the universal service provider in greenfield estates, would it continue to be appropriate for Telstra to determine the technology it uses to fulfil its USO in those areas?

32.If Telstra were not to continue as the universal service provider, what, if any, obligations should be imposed on whom to ensure that consumers continue to have access to basic telephony services in greenfield estates?

33.Will the proposed greenfields model deliver satisfactory retail pricing outcomes? If not, would new mechanisms to regulate prices in greenfields be necessary and workable? What form might such mechanisms take? What would be the implications for such mechanisms on the broader market?

Other safeguards and requirements

As a general principle, other existing safeguards would continue to apply to carriers and carriage service providers in greenfield estates. For example, carriers would be subject to requirements in relation to interception and assistance to law enforcement agencies. Carriage service providers are subject to requirements including the Customer Service Guarantee and requirements around the provision of emergency call services.14

These safeguards may be modified in the future depending on the outcome of the regulatory review. If strong separation arrangements between wholesale and retail operations were required in greenfields, some regulatory changes may also be useful to ensure consumer and other safeguards touching on both levels of operation could still operate effectively.


As part of these arrangements carriers or councils could report to the Australian Communications and Media Authority or another appropriate body on new developments, total premises and the numbers passed and connected by FTTP. Reporting should however, be kept to a minimum so as to minimise the burden on industry players.


34.How would progress in delivering FTTP in greenfield estates be best monitored and reported?


If the installation of FTTP by developers was required under telecommunications law (model 1), non‑compliance would be subject to the sanctions under the Telecommunications Act.

If the installation of fibre in greenfields was required under planning law (model 2), developers would be subject to sanctions under existing local government planning laws.

Breaches of a prohibition on the roll‑out of non‑FTTP fixed line networks would be subject to sanctions under the Telecommunications Act (model 2).

Other obligations falling on carriers and carriage service providers would be subject to sanctions under the Telecommunications Act or the Trade Practices Act. ...


35.What further steps should be undertaken to support this initiative?

36.Would the establishment of a stakeholder group assist with the implementation? If so, how many members would be appropriate, and who should be represented? What should be its terms of reference?...

1 The discussion paper is available at:

2 100 Megabits per second (Mbps) is readily achievable and FTTP provides a ready upgrade path to faster speeds.

3 For example, FTTP networks are capable of delivering services such as telephone, internet and content services, as well as security services such as closed circuit TV, smart metering for electricity other utilities and other advanced services.

4 Online and Communications Council, Framework for the collaborative development and use of broadband in Australia, December 2008

5 For example, the installation of a FTTP network may require headworks (eg network equipment and a secure shelter) in each estate, more sophisticated electronics in the form of the optical line terminator and optical network terminator (ONT) and different in-building wiring.

6 For example, a submission to the Public Works Committee by the Land Management Corporation (South Australia) estimated the per lot costs for one development to be $2500 for water, $3200 for stormwater, $4800 for power and $4800 for sewerage

7 This approach appears to have been influenced by Telstra’s interpretation of how it should meet its Universal Service Obligation (USO) in greenfields.


9 Telstra (Geoff Booth), Communications Day, 25 May 2009, p. 4


11 ‘Line link’ is the terminology used in the Act and essentially refers to cabling, including where cables are joined to one another to form a point-to-point link over a long distance.

12 Eckermann & Associates (for Multimedia Victoria), Aurora Fibre‑to‑the‑Home Case Study, August 2006, available from

13 This approach would be similar to the ‘deemed declarations’ introduced as a transitional measure in the Telecommunications (Transitional Provisions and Consequential Amendments) Act 1997. The Act provided for existing interconnection services to be ‘deemed’ to be declared services. Under the proposed model it would be necessary to define the services that are required to be regulated.

14 These requirements are set out in the Australian Communications and Media Authority publication, Know your obligations, available at

From: National Broadband Network: Fibre-to-the-premises in greenfield estates - Consultation paper, Department of Broadband, Communications and the Digital Economy, 29 May 2009.

No comments: