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.