New copper lines all but banned under Government legislation
- 19 March, 2010 09:30
- Comments 8
The Federal Government has introduced legislation to ban the installation of fixed-line copper from every new house built in greenfield estates in an effort to push fibre connectivity.
Under the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2010, all greenfield developments will need to be capable of supporting fibre-to-the-premises and will not be allowed to install copper wiring without Ministerial permission. A greenfield development is one built from scratch with no prior infrastructure available. The Government is aiming to have the legislation in place by July 1, 2010.
Communications Minister, Senator Stephen Conroy, said it did not make sense for new houses to be fitted with copper technology when fibre technology was the way of the future.
“[This] allows us to target those estates where it is possible to have fibre now, while ensuring others have fibre-ready infrastructure installed so it is easier and cheaper to connect them later,” he said.
The explanatory note accompanying the legislation claimed Telstra had “welcomed the Government’s fibre in greenfields policy”. But it then acknowledged the move would “impact on…Telstra’s business” due to its strength in the copper infrastructure market.
“Because of its incumbency and role as the universal service provider, Telstra is generally called upon to install copper infrastructure. By contrast, as noted above, it faces competition in the supply of FTTP infrastructure,” the note stated. “Telstra is already well established in the FTTP market and is in a strong position to compete in the provision of fibre.”
But Telstra was less certain than the Government and would not provide outright support when contact by ARN.
“There are significant differences between the draft and the final Bill. We are reviewing the implications for Telstra, the broader telecommunications industry, developers and our customers,” a spokesperson said.
Ovum research director, David Kennedy, said the Government’s main fear was that an unseparated Telstra could offer cheap copper installations and services and draw customers away from the NBN.
“If negotiations between Telstra and the Government fail, then Telstra will be in competition with NBN Co,” he said. “If there’s no copper in those estates then Telstra won’t have an incumbency in those areas.
“One thing it means is that Telstra’s copper network will not be expanding geographically in the future if this bill gets passed.”
“It reflects the Government’s push towards a single fibre platform for the whole country. They see copper as an outmoded technology which they don’t want to continue investing in.”
But Kennedy was keen to add that installing fibre was a sensible approach and said greenfield developments often lacked the ducting required for both fibre and copper infrastructure.
“If anyone might be concerned it’ll be Telstra, but I think that everyone in the industry would agree that continuing to put copper into new estates is a practice of diminishing returns.”
Nominations for the 2012 ARN IT Industry Awards open on Tuesday, June 12.
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Comments
Michael
Why government is dictating technology at the first place? Why government is finding hard to establish level playing field and let the market decide? The more politicians are interfering with the free operation of the markets, the worse everything are becoming. Just look at the insulation fiasco.
I think the best thing for Australia is for government to butt off by deregulating telecommunications market and freeing companies to invest wherever they choose risking their own money.
This will remove rent-seekers and allow general competition. It will be much better for telecommunications services in Australia. Just look what free market did in unregulated wireless area to see what an unregulated fixed-line area can be.
Pat
@Michael
My understanding is that the government is stepping in because Australia is years behind overseas technology in terms of internet speed etc.
New tech can be seen by industry as high risk, and crusty conservative companies (like telstra) will just continue to do what has made cash for them for years.
I think this is another case of privatisation slowing the advancement of technology. Currently i think the gov owns exsisting infrastructure and is spending $$$ to upgrade to the new standard. I would think it's reasonable that new estates should meet this standard?
as a side note, I don't see how local contractors importing inferior (non-compliant with Australian standards) insulation form international suppliers is the government's fault....but that's off topic.
Chris
Why is government interfering you ask? Because left up to Telstra (which it has been in the past), we have been left with overpriced and substandard internet and Telstra have had the ability to provide world class connectivity to Australia for almost 2 decades. But a series of poor decisions by them have left us where we are today. So if it's up to our government or Telstra, I will let our government have a go.
Samuel
Finally, Senator Conroy does something intelligent with his portfolio. Replacing copper cable with fibre is expensive and disruptive to anyone that uses the copper, so forcing the fibre to be there in the first place is great for the NBN, and great for internet services in general.
As for Micheal's comments, deregulation of the financial industry has worked so well in recent years. The government needs to be concerned about the services that are provided to the people, and fibre is better than copper for telecoms. The customers will benefit from this more than they would benefit from companies going after quick and easy money in old tech.
DD
Look at what the free market did to America..
Mark Jelic
The previous comments have touched on the correct answer:
DD: The completely free market is not the way to go - correct, look at what a mess it is in America. My iPhone does not work in country areas because many companies use analogue networks. And in built up areas, we as humans are getting three times the radiation from overlaid 3G networks, when one network, covering a wider area, owned by the government, would be better for all of us.
Pat: Correct, privatisation of Telstra did and still is slowing the advancement of technology. The government should have done it right in the first place, and split Telstra into Infrastructure and Retail, sold off the retail aspect only. Government should be in the ultimate holder of our essential infrastructure. Just like roads, the government should be the owner of the cables, with private companies making the "roads" the most efficient way.
But creating the NBN without buying the pipes in the ground off Telstra is not right either. It is not right to force a private company essentially help set up a competitor without compensation. The government should right the wrongs of the past and buy the infrastructure off Telstra once and for all, or they will simply just be adding to the mess, and ultimately the NBN will fail because copper is cheaper than fibre.
But typical of government, they are repeating the mistakes of the past, and have already started talking about the NBN doing retail. Just stupid.
Adam
Why on Earth would you want to roll out copper to new estates? If the free market is doing this due to cost pressures, then it is a very nearsighted approach designed to do nothing but boost developer's bottom lines.
If the government is subsidising the deployment of a fibre network over the next decade then how installing an old technology, which tax payers are going to pay to tear up in the near future, be in the community’s best interest.
The government is right to step in and mandate the standard for data, just like they would for road access, water, power etc.
Sean
friends of mine have two lines connected to the house with copper lines and they are on a rim multiplex and the lines in the street goes down when it rains and they are not far out of brisbane and they are on tank water and a biocycle and the house around the corner don't have trouble with phone lines and they have town water and sourage as well it shows you what happend's in housing estate's
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