Labels: Developers, Greenfields, NBN
So what does this mean for developers? Well it means at least an additional cost of $1000-$3000 per lot to deploy infrastructure which previously they did not need to pay for. While some developers did choose to deploy fibre networks (at their own cost) as a marketing advantage, the majority remained with deploying the free Telstra copper network.
But this legislation also means developers have a far smaller choice in telecommunication providers to be able to deploy their network. Previously developers could go to any carrier to have their network built (although most went to Telstra), but now with the new amendments already passed by Parliament in late March, residential networks must be built using an "open access, wholesale only" business model. This means Telstra, Pivit, BES, FuzeConnnect, Clubcom, TransACT, HaleNet, Broadband Multinet, and Geomedia Broadband - all who had previously built FTTH networks in residential estates - are now effectively outlawed from building new networks while they remain vertically integrated.
Now there are only a handful of carriers who are open access, wholesale only - namely Opticomm, Openetworks, Comverge and of course NBNco - which reduces competition (a benefit only for NBNco) and thus limits diversity in the market place. Consider what Carly Fiorina had to say about diversity when she was running HP:
"The value proposition for diversity is very clear:
- Diversity drives creativity.
- Creativity drives invention.
- Invention drives profitability and business success."
More significant however is the government is FORCING a cost impost on developers at a time when they can least afford to do so. It also creates more red tape to have their development approved which will only result in higher prices for land purchasers.
While the government may say by dealing with NBNco its only to be the cost of the Pit and Pipe infrastructure, it is actually much more than this. Firstly if a developer deals with NBNco the pit and pipe must be designed to NBNco standards (which is not the case if dealing with other providers); secondly it introduces a substantial project management overhead; and thirdly it lengthens the duration it takes to construct each stage of an estate due to NBNco's bureaucratic processes. These all add to a higher cost of construction and longer borrowings on their money for which the developer will want to place a margin on, thus pushing the costs of each new block of land up by about $1500 - $3000. All this at a time when developers are struggle for funding, having difficulty in some states with volume of land sales and when Australia's housing affordability is at an all time low.
Labels: Developers, Greenfields
Fibre deployment bill to mandate all new developments to be fibre enabled
0 comments Posted Friday, May 13, 2011http://www.aph.gov.au/house/committee/jcnbn/docs/tlafdbill.pdf
http://www.aph.gov.au/house/committee/jcnbn/bill/media/media01.pdf
Other provisions of the Bill include:
- Enabling Telstra to have a transitional role for providing services for infill developments of less than 100 premises that do not yet have fibre.
- Giving developers the option to use telecommunications providers other than Telstra for installing services for infill developments of less than 100 premises that do not yet have fibre.
- Putting in place the optical fibre line requirement to ensure that fibre is provided for new developments in the long term if required, and the fibre-ready facility requirement to allow the ready deployment of fixed telecommunications lines to a premises.
- Prohibiting constitutional corporations from selling or leasing land or buildings situated in new developments unless fibre-ready facilities have been installed
- Attaching penalties to the sale or lease of land or buildings where fibre-ready facilities have not been installed.
- Exclusion from the fibre ready facility and fibre-ready installation requirements of new developments where urban utilities are not installed (are outside the fibre footprint).
- Ministerial authority to exempt by legislative instrument, projects, individual lots, units or conduct otherwise subject to the provisions of the Bill.
- A regime for carriers to secure access to fixed-line facilities which are owned by non-carriers, to ensure the fibre rollout using these facilities.
- Empowering the Australian Competition and Consumer Commission to be the default arbitrator for the access regime for carriers including setting the code of conditions for and determining the feasibility of third party access to the regime.
- Empowering the Australian Communications and Media Authority to make technical standards for customer premises equipment and cabling for use with the NBN and other superfast telecommunications networks.
Labels: Developers, Greenfields
The Government has released a consultantion paper on the NBN and there is a specific section on Greenfield developments. The Government understands Fibre to the Home is the superior fixed line technology that will best position Australian consumers and businesses to take advantage of the growth in the digital economy. Senator Conroy last year said at the FTTH SIG working group "if I can mandate FTTH in greenfields, then I will".
The paper goes on to further say "Given the superior properties of fibre optic networks, it would be counter-productiv to have homes built in new developments with the latest building technology but connected by antiquated copper wires. Indeed, allowing copper connections to take place will lead to higher costs in the long run if these estates need to be ‘retro-fitted’ to deploy fibre optic connections in the future."
So to ensure that all developers install networks for the future using fibre optic
technology, the Government will mandate the use of fibre optic infrastructure to the
home and workplace in greenfield estates across Australia that are approved after
1 July 2010.
Reading the detail of the report, rollout of FTTH into greenfield estates will not be undertaken by the Government owned NBN company, but the industry. It would also be reasonable to assume any greenfield rollout will need to be consistant with the NBN regulation if not in technology, then structure so that means an "open access, wholesale only network". Currently in Australia today only OptiComm delivers a "true open access" network that meets all the requirements annouced so far by the Government.
So for those developers who have not got into FTTH so far, start changing your strategies to line up with the Government's planning approvals where telecommunications will become a key peice of infrastructure. It may also be time to speak to a good network operator, OptiComm being one.
Labels: Developers, FTTH
Since starting this web site 10 months ago, a growing a problem some visitors have reported is the amount of information it contains. At the moment about five new articles per week and one white paper per month is added to this site.
In an attempt to provide some level of focus, a new section has been added which provides white papers and articles that are relevant to Land Developers, making it easier for you to find information which is pertinent to your needs. By selecting the "Developer" tab found at the top of this page you will be taken directly to the section which publishes all documents and articles as papers for you to download and keep locally.
Three documents are posted to this page so far, and more will be added in the very near future.
Labels: Developers
Introduction to Fibre to the Home (FTTH)
Author: Stephen Davies (stephend@qwestcom.com.au)
Published: July, 2007. Revision: 1

Issues for developers considering FTTP
Author: Stephen Davies (stephend@qwestcom.com.au)
Published: August, 2008. Revision: 1

Creating a Smart Community
Author: Stephen Davies (stephend@qwestcom.com.au)
Published: Oct, 2007. Revision: 1


FTTH Business Models
Author: Stephen Davies (stephend@qwestcom.com.au)
Published: Oct, 2007. Revision: 1
Questions your should ask your FTTH Provider
Author: Stephen Davies (stephend@qwestcom.com.au)
Published: Oct, 2007. Revision: 1

The Maturing Australian Fibre to the Home industry
Author: Stephen Davies (stephend@qwestcom.com.au)
Published: Oct, 2007. Revision: 1

Labels: Developers