Conroy threatens naughty NSW with NBN powers


news Federal Communications Minister Stephen Conroy and the National Broadband Network Company have threatened to use Federal telecommunications powers to force the Coalition New South Wales State Government to provide access to electricity infrastructure NBN Co needs to roll out its fibre infrastructure in the state.

According to AAP, the NSW Government, as represented by Deputy Premier and Minister for Trade and Investment Andrew Stoner, believes NBN Co is not offering it equitable terms to access power line infrastructure for overhead fibre rollouts in areas where the cable cannot be laid underground, with Stoner believing NBN Co is offering $400 million less than the state needs to recoup its costs in the area. Negotiations between the two sides have reportedly broken down.

However, in separate statements released yesterday, both Conroy and NBN Co noted they would have no hesitation in resorting to the Commonwealth’s wider legal powers to gain access to the infrastructure.

“NBN Co has negotiated in good faith with the NSW Government for almost two years, but from the moment Barry O’Farrell became Premier, they have been frustrated at every turn,” Conroy said yesterday. “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. It is time for the O’Farrell Government to stop slowing down the rollout and come to an appropriate commercial arrangement so the people of NSW can get the NBN as soon as possible.”

“In the interim, NBN Co is prepared to use Commonwealth powers to gain access to the poles it needs now to continue the rollout to the areas of Gosford, Long Jetty and Lidcombe, until sensible commercial arrangements can be finalised with the relevant utilities.” In a statement entitled “NBN Co determined to keep NSW rollout on track”, NBN Co chief executive Mike Quigley said the company would not hesitate to use “powers in the Telecommunications Act” to get on with the job of rolling out the infrastructure.

At the heart of the debate is the NSW Government’s claim that NBN Co is not offering it an equitable return for access to the infrastructure, with the state wanting to defend NSW residents and businesses from further increases to electricity prices.

Conroy yesterday claimed that the NSW Government’s argument in the area was “misleading” and constituted an “absurd and ridiculous claim without any basis in fact”. “The truth is that the O’Farrell Government is trying to gouge Australian taxpayers, delay the NBN rollout and make it more expensive,” he said. “Every other state and territory has finalised sensible commercial arrangements with NBN Co for access to power poles, but the NSW Government wants to charge almost six times as much. NBN Co is seeking to rent access to the poles only and will cover all design, preparation and installation costs.”

This is an argument which NBN Co also supports.

“Putting fibre cables on power poles in NSW brings in more money for the state, not less,” said Quigley yesterday. “Where we have an issue is that whereas we’ve negotiated fair and reasonable terms with other utilities in other states, the NSW Government wants to charge us far in excess of anybody else. That’s unfair to taxpayers.”

“Sharing infrastructure is meant to save taxpayers money. It avoids us having to build more of it. It allows us to roll out the NBN more quickly. And it lessens disruption to communities. And NSW will not be left short-changed. If we cause financial loss or damage to a utility’s property then under the Act we’re obliged to provide then with a reasonable amount of compensation.”

Up until now, NBN Co has been able to rollout some services in NSW using access to power poles under temporary arrangements due to expire early in 2013. The actual cables being used range in diameter from 9mm by 5mm to 15.2mm by 8.2mm and are known as “ribbon fibre”. The legislation which the Federal Government would use to override the NSW Government in this case is Schedule 3 of the Telecommunications Act, which gives telcos the ability to access infrastructure for the purpose of installing ‘low-impact’ facilities.

The New South Wales Government has not provided a detailed statement outlining its rationale and pricing for access to its infrastructure.

So who’s right here? To be honest, it’s hard to know without getting a much closer look at the negotiations between NBN Co and the NSW Government (probably represented by its energy utilities). At first glance, NBN Co looks like the white knight and the NSW Government looks like it’s playing politics. However, I suspect that it’s a bit more complex than is being suggested.

For starters, the statements coming out of Conroy and NBN Co yesterday with respect to this issue could best be described as a little shrill and simplistic. Getting access to electricity power poles to deploy additional infrastructure is a huge deal. I know a few people who work for some of the big electricity networks, and it’s safe to say that the way these networks function is highly controlled and regulated, for the simple reason that the electricity which flows along the large grid lines (I don’t know the technical terms) is highly dangerous. It’s not a simplistic matter for the utilities to allow other parties to access these networks and there are substantial costs.

Quigley’s blanket statement that putting fibre on power poles in NSW will bring extra revenue to the state is quite disingenuous, in my opinion. It’s just more complex than that, and I don’t think state-owned corporations like Ausgrid enjoy opening up their infrastructure to other parties.

Then there is the fact that in NSW, NBN Co isn’t dealing with the same sort of highly politicised ministers which it may have been dealing with in other states. Deputy Premier Stoner, for example, has recently demonstrated a very strong understanding of and commitment to the state’s technology sector. While he is a member of the Nationals, and the Liberal/National Coalition, I’m betting that Stoner wouldn’t simply stand in the way of the NBN being rolled out in NSW for political reasons. The fact that he has gotten involved in this issue at such a high level demonstrates that there are probably kernels of truth on both sides here and that Stoner, as is his practice, is communicating closely with the NSW bureaucracy. I don’t think this is purely political.

I’m personally betting that the idealistic, modern, non-bureaucratic entity that is NBN Co is trying to cut through red tape and expedite the NBN rollout in NSW, but is coming up against a bureaucratic culture in the energy utilities and NSW Government that is, frankly, there for a historical reason: The treacherous and costly nature of electricity networks. To put it bluntly, telco people usually do butt heads with energy utility people, even though you’d think they were cut from the same cloth. Energy utility people are usually much more conservative in nature, owing to the much more dangerous nature of the technology which they work with.

If I as to make a guess, I would say that NBN Co is probably right in that NSW is trying to charge far too much for access to power pole infrastructure, while NSW is probably also right in that NBN Co is not wanting to pay enough for access and probably doesn’t understand the issues as well as it thinks it does. Why hasn’t this standoff happened in other states? It’s tough to say, but I would bet the agreements which NBN Co has with the state governments and utilities would vary between states and that the devil’s in the details.

I’d love some sparkies (electrical engineers) to chip in with their opinion on this one.

Image credit: Alex Dawson, Creative Commons


  1. With no additional evidence to back me up, I’m going on the NSW government playing politics.

    I simply can’t believe that the government/NBNCo pulled off a series of stunning coups in all the other states for those prices, when the NSW government wants to charge 4 times the price.

    It’s feasible, but IMO … unlikely. Hopefully more comes to light if it sees this go through the court process.

    • Man, my english is terrible.

      Last sentence should read …

      “Hopefully more comes to light if we see this go through the court process.”

  2. Renai you are being much to easy on the NSW Government and have fallen for their crap. Their press release is worded to give the impression that it is going to COST NSW taxpayers $400 million dollars and their electricity prices will have to go up to pay for it. It takes political spin to a new level to put out as big a lie and associated FUD as this.

    Currently other states are charging $20 to $30 a pole and NSW wants to charge $160 a pole. The $400 million quoted is the money they wouldn’t get if they had been allowed to price gouge NBNCo and hence all Australian taxpayers. Sure there might be minor costs involved for NSW but that’s what the $20 a pole is for. NBNCo does all the work and the NSW Government makes money but still complains as they think they can charge with whatever they want.

  3. Dozens of companies negotiate every year to get access to these poles. Sure, not as many of them, but even so. Also, Telstra have access to them by agreement as their cabling is already there. And NBNCo. have an agreement with Telstra to use their infrastructure- one would assume that includes agreements in using their pole access.

    On the electrical side, I don’t believe the access these companies need to roll out on pole is the same level needed to physically deal with the high voltage lines. The NBN cable will sit below or with the copper, so it shouldn’t ever involve going within a mere of the electrical line. There is different regulations covering those who use the poles and those that actually work on the cabling. I wouldn’t for see the former being as strict as those of the latter.

    Sorry Renai, but NSW Government has been against the NBN from the start and even things they haven’t been able to do a thing about (opt out Build drop) they’ve made a big deal of. I agree with Murdoch- this appears to be nothing more than grandstanding. Why have we not heard a single peep from other states otherwise? Surely if NBNCo. were massively underestimating and pushing that cost, there would’ve been SOME disagreement elsewhere??

  4. Why not say that NSW where such obstacles arise will not get the NBN until its Government comes to the party and then sit back and let the community kick them into line.

  5. Fully support Conroy in bulldozing incalcitrants!
    We need the NBN yesterday, and not some half-baked wifi alternative that would never be as good.

  6. How about suspending the NBN roll-out for NSW and using the funding to accelerate the other states roll-outs till Barry O’Farrell comes to his senses and stops trying to rip off all Australians

    • How many people would place “I like O’Farrell” placards in their front garden if NBN did just that on NSW. NSW would really be miffed if the NBN suddenly ceased to expand within their border whilst the rest of the Nation began to hook up big time to fast net access without all the crap we go through with the copper. As more connect and utilise, the spin put out by the Libs will get very wobbly.

      • I would love to see a hardline approach to communities of any size that try to play political games with the NBN.

        I beleive that NSW should be scheduled for satellite coverage until such time as they negotiate in good faith. If they don’t negotiate in good faith, then let them have satellite.

        • How come everyone is NSW should be blamed for our stupid politicising government??? I want my NBN and I’m just as entitled to it as the rest.

          Come on people, get serious, NBNCo. aren’t going to do that. This is nothing more than grandstanding- the little man jumping up and down because he has an inferiority complex.

          • Well, it may encourage NSW to vote differently. Or start a lynch mob. I’m pretty sure that the politicians would get the message either way.

        • I say HL approach is to use the law to steamroll the NSW gov into submission!

          Frankly I dont see how the NSW gov has any credibility in this at all when EVERY SINGLE other state Gov came to a mutually acceptable price for access to the Power Poles … including the Liberal run states!

  7. I agree that the NSW Government is playing politics.

    I also think there’s a bit of truth in the idea that power infrastructure costs more to build and maintain in NSW so the “fair” cost of access might be a bit more than the $20-$30 mark.

    Not that that’s a good thing mind you. Its just that NSW is mired in bureaucracy and almost anything infrastructure related costs 2 to 3 times as much as it should – witness the bloated cost estimates for rail projects.

    Mind you its amusing to think that the previous Labor government finally went down because it couldn’t kick enough heads in the bureaucracy and it looks like this government is suffering the same fate :)

    Plaudits to NBNco for having a fresh point of view. Maybe they’ll inspire other projects to get their costs under control. Maybe the NBNco will be a good model for a high speed railway one day.

  8. What are Optus and Foxtel currently paying, don’t think Rupie would pay Barry’s rates and not have him voted out.

    • Not sure, but I don’t think the NSW Govt. like those birds that sit for FREE on the power lines… Bludgers.

  9. Surely this puts an end to the question:

    Peter Achterstraat’s audit of the state’s finances found that data entry errors, mistakes in spreadsheets and poor reconciliations were responsible for much of the disparity in projections.

    When the Treasurer Mike Baird delivered the budget in June, he forecast a deficit of $337 million.

    But Mr Achterstraat says with the corrected figures, the budget is in surplus by $680 million.

  10. As a fellow of the Institute of Engineers in Australia, who has a long and detailed knowledgeof all aspects of electical transmission systems, it is my opinion that most of the comment concerning the difficulty and ‘danger’ inherent in access to power poles in this piece is just drivel. As commented by another above, Foxtel and Optus were granted access to hundreds of thousands of power poles in Sydney to string their cables, and this was done with startling speed, and no outside supervision at all. Stringing NBN cables from post to post under power lines is no more complex or dangerous, and a lot less time consuming than cutting foliage that gets within 2 metres of power lines. This latter activity is done continuously by contractors, again with no supervision or involvement with the ‘owners’ of the poles and wires. O’Farrell and Stoner’s arguments are false and specious. In other words, they are lies. They are trying to help Abbott by surrounding the NBN rollout with supposed difficulties. The statement that receiving money, for an activity that will cost the power pole owners nothing at all, will increase power bills is so obviously false that it is laughable.

    cheers, Alan H BE MBA FIEA

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