Only 45% accept free NBN fibre connection

update Only 45 per cent of the 5000 households included in the first phase of the Tasmanian portion of the National Broadband Network have consented to NBN Co conducting free installation of a unit on the outside of their dwelling, which would allow them to connect to the network.

NBN Co confirmed the figure, which had been revealed at a press conference in Tasmania on Tuesday for the opening of a network operation centre. Monday was the last day that the Tasmanian households included in this first stage of the National Broadband Network could agree to the installation.

"Many people predicted we would be as low as 15 per cent take-up, but we always believed there is an enormous latent demand, particularly in Tasmania, which has had some of the poorest broadband services, some of the most expensive and the slowest," The Mercury quoted Communications Minister Stephen Conroy as saying.

According to The Mercury, Senator Conroy said it was up to retail service providers to convince people to sign on to the service. "The challenge now is for the retail service providers to put offerings in place to attract customers," he said. "That is their measure of success — our measure of success is connections and rolling this service out to all Tasmanians."

The 45 per cent who chose to be connected initially, won't have to pay for being hooked up, according to NBN Co spokesperson Rhonda Griffin.

Any household in the stage one Tasmanian NBN roll-out that wanted to connect after the free connection period would need to order a "demand drop" instead of NBN Co automatically doing the "drop" as the network was rolled out, Griffin said. They would order the drop at the same time as ordering a commercial internet service, she said.

The initial "drop" involves NBN Tasmania running a fibre-optic cable to each consenting household and installing a premises connection device. Once connected and installed, a household can then order a service — if they choose to — through a retail service provider. The retail service provider or the end user is then required to organise the internal wiring of the service and send their own technician out to do that at a time negotiated with the household.

There would be a cost for the retail service provider to pay for the "drop" for the 55 per cent who didn't initially connect, Griffin said, but she would not reveal what that cost would be.

"I can't say what's going to be the cost because it's up to the [retail service providers] what they charge," she said. "All I'll say is it is all part of our wholesale access agreement."

Service providers were responsible for how they priced the drop to customers, she said.

Those who hadn't participated in the free connection would most likely be required to pay a fee to a retail service provider to be hooked up, according to internet service provider iiNet chief regulatory officer Steve Dalby.

Dalby said iiNet would not charge any connection fees in the first instance for the consenting 45 per cent who chose iiNet. Primus and Internode are the other options for the first stage of the Tasmanian NBN roll-out. However, customers who didn't consent to being connected could incur an extra fee if they signed up later.

"Some time down the track if a customer says they've changed their mind, a new tenant moves in, or the property changes hands and the new owner wants to be connected, there will be an application process which will generate a charge," Dalby said.

"There will be a charge to us because NBN Co will provide that 'drop' to the outside wall. We would either decide to pass that on, or depending on our retail policy at the time, it might be [to] subsidise it or it might be part of a connection fee [where you] sign up for 12 months [and] get a free connection."

Update at 2:10pm, 4 June 2010: NBN installs a premises connection device, not a network termination unit when conducting the "drop". The premises connection device houses the passive fibre connection from the street to the home. The network termination unit is the active network connection.