Australia: National Broadband Network - Statement of Expectations and Corporate Plan released

On 20 December 2010, the Government released a Statement of Expectations for NBN Co and its final response to the Implementation Study. The Statement covered key areas of network design and coverage, confirmation of funding arrangements and provision of calls to emergency services.

The release of the Statement coincides with the Government's release of the NBN Co Corporate Plan.

Network footprint - POIs

Following the joint ACCC/NBN Co consultation process, the Government has accepted the ACCC's advice that NBN Co establish approximately 120 points of interconnection (POIs) to the National Broadband Network (NBN); comprising 80 in metropolitan Australia and 40 in regional Australia (semi-distributed model). This will extend the NBN to meet, not overbuild, competitive backhaul routes. Scrutiny and pricing determination powers recently given to the ACCC with the passage of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2010 (Cth) may be used by the Commission, if necessary, to declare prices in order to promote effective competition over these routes.

Network footprint - Greenfields

The Government expects NBN Co to provide fibre-to-the premises technology to multi-dwelling units that fall within the fibre footprint. The Government has foreshadowed further review and/or the imposition of a levy if issues arise in connection with access to multi-dwelling buildings or cherry-picking.

Network footprint - Architecture

The Government's preferred position is for the provision of wholesale services by NBN Co to extend to layer 1 unbundling (in addition to the layer 2 bitstream service). This would require network design to conform to home run topology, rather than the Gigabit Passive Optical Network system proposed by NBN Co as the most practical solution for brownfields network areas. The Government has accepted this position but has also requested a trial of home-run fibre in a new development in early 2012.

Funding

NBN Co will be funded with Government equity until it has sufficient cash flows to support private sector debt. An equity agreement will be entered into with NBN Co for the rollout period with equity funding based on the expected $27.5 billion funding requirement advised by the NBN Co.

Uniformity - planning and pricing

The Government will present to the Council of Australian Governments a proposal for State and Territory governments to streamline their planning and development processes to implement a nationally consistent approach.

Further consultation

The Government will undertake further consultation to:

• require new fibre networks built after 1 January 2011 for residential/small business purposes to be wholesale-only as well as offering a Layer 2 service on an open access basis; and
• ensure access to battery back-up services for telephones during a power outage.

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