Most of the NBN’s fibre will be laid using Telstra’s existing infrastructure, putting fibre down the pits where copper now goes. This is a privilege for which NBN Co is paying Telstra handsomely. But much of it, perhaps as much as a quarter, will be above ground on the poles and wires of electricity utilities.
NBN Co has entered agreements some utilities on the terms for doing so, but has been unable to reach agreement with NSW’s largest electricity distributor, Ausgrid, which is owned by the conservative NSW Government. NBN Co has now said that it will use the federal Telecommunications Act to override Ausgrid and use its infrastructure as it sees fit. It has flagged such a move in the past, but leaked documents shows that it now intends to exercise the power the Act gives it.
Ausgrid and NBN Co had been negotiating on access rights for nearly two years, but political considerations have overshadowed commercial ones. NSW has had a Coalition government since the negotiations began, and the Coalition is opposed to the NBN in its current form and will do what it can to embarrass its operator.
NSW Deputy Premier Andrew Stoner, who is also Minister for Regional Infrastructure, last year accused NBN Co of potentially causing an increase in power prices in NSW because it would not pay what the rental of the Ausgrid poles was worth. He mentioned a figure of $400 million.
Federal Communications Minister Stephen Conroy said Ausgrid was asking too much, and that its exorbitant rates would add $175 million to the cost of the NBN.
Ausgrid’s announcement was, shall we say, terse:
Commercial negotiations between Ausgrid and NBN for the lease of Ausgrid's poles for the fibre roll-out ended on 20 March 2013 without reaching a satisfactory agreement.
NBN has subsequently elected to use its powers under Schedule 3 of the Telecommunications Act to deliver its project across the Ausgrid electricity network.
The Telecommunications Act provides the necessary authority for NBN to design, construct and maintain its network on Ausgrid's infrastructure facilities, as long as important safety and network standards are met.
Under Schedule 3 of the Telecommunications Act, NBN will be required to reimburse Ausgrid any losses incurred in supporting the NBN roll out. Since conclusion of the commercial negotiations, Ausgrid has yet to receive any proposed program for the network roll-out from NBN or its contractors.
It doesn’t sound like any arrangement for the NBN’s use of Ausgrid’s poles would be terribly amicable. Little to do with the NBN has been recently.
Earlier this week the Australian Financial Review published leaked documents showing NBN Co’s concerns over the performance of its major constriction contractors (CommsWire, 2 April 2013).
It has now published further information from those same documents which indicate that NBN Co is readying a test case of its use of the Telecommunications Act to piggyback on Ausgrid’s poles, at Long Jetty on the NSW Central Coast.
The NBN is becoming a bit of a soap opera. What will happen next? Its contractors are letting it down, it is running late, its CEO is being insulted, and its financial projections are being challenged. Its detractors are having a field day. It is a great shame, and more than a little unfair.
Those most responsible for making things difficult for NBN Co are those with most to gain from making it appear to be struggling. It’s one of the oldest tricks in politics.