The Gillard Government today released a statement that sets out its expectations of NBN Co as it rolls out the National Broadband Network (NBN).
The Statement of Expectations also comprises the Government's final response to the Implementation Study, which was publicly released on 6 May 2010.
The Minister for Broadband, Communications and the Digital Economy Senator Stephen Conroy said the Statement of Expectations puts in place the final pieces of how the NBN will be implemented.
"Today represents another significant milestone in the delivery of the NBN and it means we can get on with delivering Australia's largest nation-building project in our history," Senator Conroy said.
Statement of Expectations:
The Statement of Expectations provides NBN Co with the Government's policy implementation objectives for the NBN.
The Statement covers the Government's expectations in relation to, among other things, coverage and premises to be served, NBN Co's role in new developments, the legislative and regulatory framework, ownership arrangements, funding, planning, reporting and performance management.
Some of the most important decisions recently finalised were on the number and locations of the Points of Interconnect (POIs) to the NBN, and on battery back-up arrangements.
The ACCC advised the Government that a semi-distributed network design, where the NBN will extend to meet, but not overbuild competitive backhaul routes, would be the best outcome for competition and in the long-term interests of end users. This approach was generally supported by industry in consultations with the ACCC.
The Government has accepted the ACCC's advice and as a result, NBN Co will establish approximately 120 POIs: 80 in metropolitan Australia and 40 in regional Australia.The ACCC will closely monitor the level of competition on backhaul routes and address any failure in these markets to deliver competitive outcomes by using its new upfront price determination powers where needed.
The Government expects this approach will deliver a uniform national wholesale pricing outcome and support retailers' ability to offer uniform prices at the retail level.
The Government intends to undertake consultation with stakeholders, including emergency services, on the appropriate way of ensuring access to battery back-up services for those who need them.
The Government has indicated that in the interim it expects NBN Co to provide battery back-up to all premises in the fibre footprint to ensure a standard telephone will continue to provide voice services during blackouts.
The Statement also outlines key decisions in relation to NBN Co's role in transforming the industry structure. To ensure NBN Co operates on a level regulatory playing field the Government will be making an amendment to the Telecommunications Legislation Amendment (National Broadband Network Measures - Access Arrangements) Bill 2010.
This will require new fibre networks built after 1 January 2011 for residential and small business purposes to be wholesale-only as well as offering a Layer 2 service on an open-access basis. The Government will consult with industry in finalising the detail of such an amendment.
NBN Co will retain the option of overbuilding infrastructure built after 1 January 2011. The Government has also already indicated it will consider the introduction of a levy, if necessary, to prevent opportunistic cherry picking.
The statement also outlines that in consultation with NBN Co, industry and community, the Government will explore practical legislative options that support the NBN rollout, including changes to the Telecommunications (Low-Impact Facilities) Determination. Any changes will give adequate weight to industry and community sensitivities and consider NBN Co's 'on the ground' experience.
The Government will also present to the Council of Australian Governments a proposal for state and territory governments to streamline their planning and development processes to implement a nationally consistent approach.
Additional policy decisions addressed in the Statement are:- The role NBN Co, overseen by the ACCC, will have in delivering uniform wholesale national prices.- The definition of 'premises', which NBN Co needs to connect to achieve the Government's coverage objectives.- That NBN Co will be the wholesale provider of last resort for fibre connections in new developments.- That NBN Co will conduct a home-run fibre trial in a new development by early 2012 and, in consultation with the ACCC, provide a report to Government.- Performance and monitoring arrangements including that NBN Co develop a charter that outlines how it will conduct its affairs to best meet the need of stakeholder groups.- NBN Co is also to develop a comprehensive strategy for engaging with individual consumers during the rollout, including handling complaints.
Government response to the Study:
The Implementation Study was prepared by McKinsey and Company and KPMG and confirmed high-speed broadband for all Australians was achievable and could be built on a financially viable basis, with affordable prices for consumers.
The detailed and rigorous Study into the NBN made 84 recommendations for the Government to consider. Those recommendations covered technology, financing, ownership, policy framework, and market structure.
The Study was informed by comprehensive stakeholder consultation with industry, vendors, consumer groups, the finance sector, and international experience and trends. Since receiving the Implementation Study, the Government has taken decisions progressively on its recommendations and provided NBN Co with directions to implement those decisions.
"In the period since the Study was delivered, and following consultations with NBN Co, industry and other stakeholders, a number of events have occurred that have had a bearing on how the Government has responded to the Implementation Study and its key recommendations," Senator Conroy said.
"Three events stand out: the Financial Heads of Agreement between NBN Co and Telstra; the Commitments to Regional Australia agreed with the Independent Members Tony Windsor and Rob Oakeshott following the Federal election; and the joint ACCC/NBN Co consultation process on the number and location of the POIs to the NBN conducted in October and November 2010."
A large number of the recommendations were also responded to by the NBN legislation introduced into Parliament on 25 November 2010 and by the Fibre in New Developments policy statement on 9 December 2010.
In July 2010, in line with the Implementation Study recommendation, the Government set NBN Co an objective to reach 93 per cent of premises with fibre technology by the end of the rollout period.
The Government also requested NBN Co to build the wireless network that will deliver fixed wireless services, delivering peak speeds of at least 12 Mbps, to premises in the 94-97 percentile of premises.
The Government expects NBN Co to maximise the use of existing infrastructure where it is efficient and economic to do so in the delivery of the fixed wireless network.
The Statement of Expectations is available at: www.dbcde.gov.au/nbn