NBN needs to be legally bound to prevent overbuilding: OPENetworks

Fibre network provider OPENetworks has accused NBN of overbuilding in areas that are already well serviced by high-speed FttN, FttP, and FttB broadband, and called for the government to pass laws preventing it from doing so.
Written by Corinne Reichert, Contributor

Wholesale fibre broadband network builder OPENetworks has accused the company charged with rolling out Australia's National Broadband Network (NBN) of "overbuilding" numerous sites that are already serviceable by high-speed fibre infrastructure.

The overbuilding accusations, first reported by The Australian on August 15, were levelled at NBN by OPENetworks, which has been providing wholesale fibre-to-the-premises (FttP), fibre-to-the-node (FttN), and fibre-to-the-basement (FttB) services for NBN for several years.

The company claims that NBN has been building out its own network to areas already serviced by OPENetworks, despite the cost to taxpayers and "contrary to competition policy".

"The full list of targeted sites is available, and it includes several sites where OPENetworks has the only FttP or FttN/B/R and provides 'super-fast broadband' services of at least 100/40Mbps," OPENetworks managing director Michael Sparksman said in a statement on Monday.

"The list includes networks at the Gold Coast, Sydney, and Melbourne, where not far away, many premises have poor broadband services and NBN Co has had to build a long way into our network's footprint or buildings to duplicate the open-access network."

Under the federal government's Telecommunications infrastructure in new developments: A new approach to competition [PDF], which came into effect on March 1, 2015, the Department of Communications designated that NBN cannot build over areas that already have adequate services provided by another fibre network.

"Wherever a network provides NBN-comparable services -- including wholesale-only operation, open access, and fulfilment of the IPOLR role -- there is no policy basis and little commercial reason for NBN Co to overbuild," the government said.

In order for a network to be designated as being "adequately served", it must fulfil a number of conditions: Provide an FttP connection that supports voice; is upgradeable; offers a wholesale or retail connection to all premises in the area; and complies with Parts 7 and 8 of the Telecommunications Act 1997, which mandates open, non-discriminatory, wholesale-only supply, inclusive of a Layer 2 bitstream service.

Only contractors Opticomm, Pivit, Places Victoria, and NT Technology Services have been granted this designation -- no OPENetworks network has.

While the government is no longer formally applying this policy, networks that were previously given this status retain the privilege. For all other areas, the new policy provides that "NBN Co must advise shareholder ministers in advance of construction if it considers there is a commercial case to materially overbuild an existing network providing NBN-comparable outcomes."

While this is set to be further detailed in a new Statement of Expectations, with indications that each network would be examined on a case-by-case basis, "given the cost inherent in undertaking capital expenditure in areas that already have high-speed broadband", the explanatory document has not yet been published.

As it currently stands, however, NBN may roll out its network without permission to any areas that were not previously designated as being "adequately served" -- including to all OPENetworks-serviced areas.

Sparksman called the policy "nonsense", claiming that "the removal of the process to protect areas or buildings otherwise well serviced or declared by the minister as 'adequately served' makes no sense if any existing building, area, or place without that designation is fair game for NBN Co overbuilding".

"If there is no such reservation and NBN Co really can overbuild anywhere it pleases, as long as the building or area is complete, then why have a process that is specified in the TIND policy?" he added.

He said the government needs to be more transparent on the policy, and release clear-cut guidelines.

"The minister for communications has to convert policy into law by directing NBN Co in writing to stop overbuilding rival networks and to focus on places without reasonable broadband at affordable prices."

In June this year, NBN recontracted a series of construction partners in a newly designed process, with Visionstream, Transfield, Downer, Fulton Hogan, and WBHO being the first companies chosen.

The contracts are set to roll out the network to 4 million premises using a mixture of FttN, FttB, and FttP. The value of the contracts has not been disclosed; however, Visionstream revealed that its contract could amount to more than AU$270 million over the next five years, with room for additional works to be ordered.

NBN CEO Bill Morrow said the contracts would provide improved flexibility, competition, and pricing in the sector.

"What this means is that the performance of our construction partners, the quality of their work, and their adherence to safe work practices will determine how much additional work they will receive," Morrow said in a statement.

"We have worked closely with the industry to reduce the complexity of our contracts to make them easier to administer, and to reward good work as we gear up to accelerate the rollout."

Water damage accusations

OPENetworks has also levelled accusations at NBN contractor Visionstream for recently causing water damage to its equipment while installing NBN fibre in a Queensland region, which it said resulted in a loss of power for several hours.

Sparksman described the actions of Visionstream as being "beyond careless" and "incompetent", saying it had resulted in damage to the company's reputation as a provider.

"Visionstream shoved a high-pressure hose up the conduit from the street pit that goes into the room where our electrical network equipment is located. They wanted to pull an NBN Co cable through that conduit to the same room where they had installed the NBN Co equipment. They knew where the conduit finished in the room, because they'd already put the NBN Co equipment in it -- but they put the NBN Co equipment in a waterproof cabinet," Sparksman told ZDNet.

"They knew or ought to have known what would happen when they blasted water and mud through that conduit and created a fountain in a communications room full of electronic equipment.

"Fortunately, for OPENetworks ... our equipment was also in a cabinet, and so we only lost power and important connections to our customers for several hours. It was a severe outage for our network that is otherwise very reliable. After drying our equipment and some other work, our technicians have been able to restore OPENetworks services and connections."

He added that "It is difficult to image how it might not have been done on purpose."

NBN has disputed the allegation that Visionstream's water damage to the equipment belonging to OPENetworks was done on purpose, labelling the argument "rubbish".

"Yes, it appears that an NBN conduit was being installed in the communications room, and at the same time there was water damage to the equipment of another company," the company said in a statement to ZDNet.

"But I'm informed our contractor acted immediately. It followed all safety procedures. And it liaised with OPENetworks to restore services.

"Clearly, there was no deliberate intent."

Visionstream also refuted the accusation, telling ZDNet in a statement: "Visionstream rejects these allegations and prides itself on its excellent operational, environmental, and safety track record."

Sparksman, however, brought it back to the original issue of overbuilding.

"In addition to direct technician costs, our main issue is the huge reputational damage caused by the NBN Co contractors just when NBN Co was seeking to take advantage and attract customers by overbuilding our otherwise very reliable network," he argued.

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