NSW govt digs in heels over NBN roll-out

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.

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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, Government, Government AU, Australia

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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Talkback

41 comments
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  • Any more to the story?

    It wouldn't surprise me that Barry o'Farrell would stoop to underhanded tactics like this but, where exactly are they planning on using power poles to run NBN cables?
    ravsta
    • Added comment

      I added some comment from Conroy that wasn't in the AAP. I hope that helps, ravsta.
      Josh Taylor
    • NBN on power poles

      I would think Castle Cove in Sydney will be at least one suburb where the NBN fibre will be above ground. The suburb seems to be largely built on rock so there are more overhead wires there already than one is likely to see elsewhere. The is no natural gas reticulated in that suburb either.
      Listohan
  • I don't blame NBN...

    http://mobile.itnews.com.au/Article.aspx?CIID=321024&type=News

    According to the above article, $30-$40 in other states vs $120/pole. Assuming that article is accurate, I'm not surprised that NBNco finds that price odd.

    Does NSW pay that much more for power?
    d0vr
    • Not sure about the figure

      But I have added comment saying that it is roughly six times what the other states are willing to charge.
      Josh Taylor
    • Power costs and substations

      I don't think overall power costs in NSW are higher but NSW does pay for substations they don't need.

      http://www.dailytelegraph.com.au/news/b-waste-as-infrastructure-gathers-dust/story-e6freuy9-1226504927741
      Keeper75
  • More...

    Bloody minded sabotage...

    Next O'Farrell & Co will be complaining, where's our NBN and why the hold up?
    RS-ef540
  • NSW Govt Price Gouging

    This is the worst reporting possible. NBNCo covers all the costs to install the fibre. To report that it will COST the NSW government $400 million and power prices will go up to cover it is the greatest pack of lies and FUD ever. Let's get this straight the $400 million they claim as a cost is the extra price the NSW government is trying to gouge out of all Australian taxpayers. They make money from the NBN leasing the poles it's just they are trying to charge $120/pole whereas normally it is $20 to $30 a pole.
    GoNBN
  • The NBN naysayers

    ... are apparently still trying to find a way to twist this to make it NBNCo's fault.

    I for one, can't wait to see just how ridiculous their response(s) will be ;)
    RS-ef540
    • Give them a chance RS. They might surprise us and finally prove they are not biased, that sort of mental gymnastics takes time to process...
      Hubert Cumberdale
      • If you can't afford it don't use it

        NBNCo asks for a price; price offered and rejected. Simple transaction; thousands done everyday. Oh wait the NBNCo now wants to set this price as well.

        Conroy's stated cost blowout is less than NBNCo wasted on their Fujitsu contract for some perspective!

        Funny to see two govts fighting over cost transfer. The public pays either way. Conroy upset that this time it will;-)
        Richard Flude
        • 

          Government has a duty to spend taxpayers' money responsibly. NBN Co are doing that by refusing to pay extortionate fees for access to poles, the NSW gov't are not doing that by asking for those extortionate fees.

          You're right, it is pretty simple.
          karl_w_w
          • "Government has a duty to spend taxpayers' money responsibly. NBN Co are doing that by refusing to pay extortionate fees for access to poles"

            Nailed it. +1.
            Hubert Cumberdale
          • Err but but

            Have you not been telling us on many occasions NBN Co is not using tax payers money????
            Blank Look
          • Both are govt corps

            Money paid by NBNCo is expenditure to them, but income to NSW govt corp that owns the poles!

            Given the impending privatisation of this infrastructure (supported Federally by Labor) the revenue could materially affect the sale price.

            The irony of your "responsibility" position is clearly lost;-)
            Richard Flude
          • 

            So your position is that people using the internet throughout the country should be subsidising NSW's power supply?
            karl_w_w
          • The same

            The NBN model is full of subsidies (state v state, country v city, high v low density, large v small data consumers, ...).

            Here the interest of NSW taxpayers isn't the same as Federal taxpayers. Why is one labelled irresponsible? Value of each depends on monopoly revenue obtained.
            Richard Flude
          • Interesting

            That was a rather long-winded way of saying yes.
            karl_w_w
          • Contradiction #2

            Richard.

            Where does suggesting a "transparent government subsidy" is better than cross subsidisation fit in with pseudo agreeing that it's quite ok for the NBN to cross-subsidise NSW power?
            RS-ef540
          • Pseudo agreeing?

            Why does a different standard apply to infrastructure projects based on whether they're owned by the State or Federally?
            Richard Flude