NSW govt digs in heels over NBN roll-out

Summary:Negotiations between the Australian government and the New South Wales government over the use of power poles for the NBN roll-out have broken down.

NSW consumers could be left to pick up a AU$400 million bill due to the breakdown of negotiations over the roll-out of the National Broadband Network (NBN), the state government has claimed.

For the NBN roll-out, 25 per cent of services are expected to be delivered to existing premises using aerial deployment that will require the use of power poles. NBN Co has had temporary arrangements in place while in negotiations with the NSW government but these are due to expire early next year.

ZDNet understands that the New South Wales government was asking for as much as $120 per pole, per month. In total more than three to four times that which was asked for by other energy providers in other states and territories.

The New South Wales finance minister Greg Pearce said NBN Co was refusing to pay the full cost for installing the fibre network in NSW.

That would leave a shortfall of up to AU$400 million over 20 years, he said.

"The NSW government has negotiated in good faith for two years," Pearce said.

"We have come down several times on price for accessing the (power) poles, and we simply will not go any further.”

"The NSW government can simply not accept such terms, which would mean families subsidising the NBN through their electricity bills."

Pearce said that the federal government should pay for the NBN roll-out because it was federal policy — and he was furious that Commonwealth laws could be invoked to gain access to NSW power poles.

The federal government has accused NSW of trying to charge more for access to its network than any other state.

"The O'Farrell government is trying to gouge Australian taxpayers, delay the NBN roll-out, and make it more expensive," Communications Minister Stephen Conroy said.

"Every state and territory has finalised sensible commercial arrangements ... but the NSW government wants to charge almost six times as much."

Pearce said in a statement that it was all about cost-shifting.

"That NBN Co has walked away proves one thing — the federal government has decided to shift the cost of the NBN onto NSW residents so it doesn't have to pay for its own project," he said.

Conroy said that the government had negotiated with the other states and territories — apart from Western Australia where access to the power poles is not required — and the NSW Government was looking to charge six times more.

"NBN Co is seeking to rent access to the poles only and will cover all design, preparation and installation costs. If NBN Co were to accept what was on the table, it would cost Australian taxpayers an additional $175 million over the life of the NBN, almost six times what utilities in other states and territories are charging."

Conroy said that NBN Co is going to use Commonwealth powers to gain access to poles in the roll-out areas of Gosford, Long Jetty and Lidcombe for 2,600 premises until "sensible commercial arrangements can be finalised with the relevant utilities."

NBN Co uses fibre ranging from between 9mm by 5mm in diameter to 15.2mm by 8.2mm in diameter.

Updated at 2.55 p.m. October 29, 2012: added comment from Conroy.

Topics: NBN, Australia, Government, Government : AU

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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