Reverse handout: Regional group wants to co-invest in NBN

The Australian government may have signalled that the age of entitlement is over, and that it would no longer be co-investing in equipment upgrades for businesses, but what if the reverse were to happen, and businesses stumped up the cash to deploy government-owned infrastructure?

That is the scenario being put forward by Regional Development Australia — Northern Rivers (RDA-NR) in its submission (PDF) to the government's broadband cost-benefit analysis panel, headed up by Michael Vertigan, which calls on the government to allow regions to accelerate rollout plans by deploying their own infrastructure.

"To progress fast-tracked access to NBN-speed broadband, Northern Rivers business, local councils, and individuals have expressed a willingness to co-invest with government, working with private sector providers to build critical infrastructure," the RDA-NR said.

The Northern Rivers committee of the federal government-backed organisation recommended that changes in legislation, regulation, and policy were needed to open the telecommunications market and allow the private sector to install new infrastructure and have access to the NBN backhaul network. "To enable this to happen, changes are required to remove all the bottlenecks and artificial barriers that prevent the region accessing existing optical fibre infrastructure and gaining access to NBN speeds and NBN pricing.

"To overcome this natural bottleneck in the establishment of the NBN, we support the view that private sector providers should be licensed to lay optical cable to a prescribed standard, including being granted access to existing exchanges and physical access infrastructure," the RDA-NR said.

The RDA-NR said that ownership of any co-funded infrastructure would eventually be ceded back to NBN Co, with an incentive model used to help business, local councils, and individuals fund their upfront capital costs.

"Naturally, if local business, local councils, and individuals are funding their own enabling infrastructure that would later be managed or owned by NBN Co, there would be an expected financial return in some form of rapid depreciation allowance, direct deduction, reduced service access prices, or some other form of return on investment schedule."

Fast tracking the NBN rollout into the Northern Rivers region of NSW was needed to combat high unemployment, attract business into the region, and match the NBN connectivity offered by its neighbouring regions of Coffs Harbour, Gold Coast, and New England.

"The lack of modern commercial-grade broadband has had a significant impact on our region's economic and social capacity and resilience," the RDA-NR said.

"Lack of employment opportunities has progressively driven prime age adults, (25yr to 45yr) out of the Northern Rivers. Attracting businesses that will employ this demographic and draw this demographic back to the Northern Rivers is critical to growing the region's commercial base and reinvigorating its urban and village communities."

RDA-NR pointed out that at the present time, the only broadband on offer across the region was ADSL1 out of the Byron Bay exchange.

"In 2014, it is completely unacceptable and an extreme deterrent to setting up a new business when the fastest broadband available to businesses in some urban parts of our region is ADSL1," the RDA-NR said.

The RDA-NR is not alone in wanting the NBN to open access; telecommunications provider TPG argued in its submission (PDF) that it should be allowed to build out its fibre network to compete against NBN Co in competitive areas.

"Infrastructure-based competition delivers the best outcome to end users. The NBN was not intended to be a fixed-line monopoly, and it should not be a fixed-line monopoly. Carriers (other than Telstra) who had invested many hundreds of millions of dollars building 'superfast' networks prior to 2011 were, and should remain, permitted to make use of those networks to compete with the NBN and other broadband providers," TPG said.

A similar view was echoed by the Australian Competition and Consumer Commission (ACCC), which, in its submission (PDF), also backed a return to infrastructure-based competition.

"Where it is economically efficient, infrastructure-based competition is likely to promote the long-term interests of end users. Where efficient network duplication can occur, competition between networks can drive dynamic efficiencies in terms of product differentiation, innovation, and timely investment," the ACCC said.

However, the RDA-NR was firm in its assertion that prices for the NBN in regional areas mirror those available for metropolitan customers.

"For regions like the Northern Rivers, reasonably priced commercial-grade communications infrastructure is as essential as roads and bridges," RDA-NR's submission said.

"For regional centres to continue to grow, cross-subsidisation of regional service delivery should be factored into the service delivery model."