Chapter 2 Part 1 – General Amendments
The Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011
(the Bill) consists of Part 1 – General Amendments and Part 2 – Other Amendments.
Both Parts 1 and 2 will amend the Telecommunications Act 1997 (Cwlth)
Summary of key provisions
Proposed Part 1 of Schedule 1 will amend the Telecommunications Act to
‘support the deployment of optical fibre and optical fibre-ready passive
telecommunications infrastructure in specified real estate development projects.’
Proposed Part 2 of Schedule 1 will amend the Telecommunications Act to
repeal proposed sections 372ZC and 372ZE to ensure there is no repetition in
the definitions of ‘optical fibre lines’ and ‘NBN Corporation’, should the
Telecommunications Legislation (National Broadband Network Measures-Access
Arrangements) Bill 2010 be enacted before the Bill.
A summary of the key provisions and discussions of issues raised through
the inquiry in relation to these provisions follows.
Proposed Part 20A – Deployment of optical fibre etc
Proposed Part 20A consists of proposed new Divisions 1 to 6 and
amendments to provisions in Part 21 of the Telecommunications Act.
Proposed Division 2 – Deployment of optical fibre lines
Proposed Division 2 of Part 20A requires the deployment of
optical fibre lines to specified building lots and building units.
Proposed section 372D provides that the Minister may make
exemptions by legislative instrument from the optical fibre line requirement in
sections 372B and 372C. This will enable the Minister to make conditional
and unconditional exemptions for the deployment of fibre for copper
Proposed subsection 372D(3) enables the Minister, through a
legislative instrument, to confer powers or functions on the Australian
Communications and Media Authority (ACMA) to determine whether conduct is
exempt in terms of laying fibre or copper. For example, ‘if such an instrument
providers an exemption where particular equipment requires a copper line, the
ACMA would be required to certify this.’
Proposed Division 3 – Installation of fibre-ready facilities
Proposed Subdivision A – Installation obligations
Proposed Subdivision A provides that where passive fibre-ready
infrastructure has been laid, that the installation of fibre optic lines ‘at a
later date, quickly, at lower cost and with minimum inconvenience to the
community’ may occur.
Proposed Section 372J enables NBN Co Limited (NBN Co) ‘to issue a
written statement if a new development is outside the long term fibre footprint
and will not have optical fibre lines installed by NBN Co or other NBN Co
contractor. This will provide a process for developers to gain information to
clarify whether their projects may be subject to these rules.
The Urban Taskforce Australia (UTA) raised the following concerns:
- ‘There is no
obligation on the NBN Co to respond to a request for such a statement in any
particular timeframe. In
fact there is no obligation on the NBN Co to respond to a request to issue a
statement at all.
- There is no right to
appeal to the Administrative Appeals Tribunal for any failure to respond to a
request or [for] an inappropriate response.
- There is no
obligation on the NBN Co to publish statistics on its performance in this
- There needs to be a
mechanism of review by the Administrative Appeals Tribunal of any subsequent
refusal or inability of the NBN Co to install optical fibre lines in relation
to the project.
The UTA suggested that provisions be included in the Bill which address
The Department of Broadband, Communications and the Digital Economy
In the absence of an exemption, the default under the Bill is
that a constitutional corporation would need to have fibre-ready passive
infrastructure installed in any new development in Australia prior to sale or
leasing. Some of these developments could in practice be in areas where NBN Co
will provide services by wireless or satellite. In these circumstances, it
could be wasteful to require the installation of fibre-ready passive
infrastructure in these areas.
The DBCDE also commented that in comparison to other providers, NBN Co
‘is in the best position to confirm a locality is in its long term fibre
footprint, it is logical that it should be able to confirm an area is not
covered.’ This power is not expected to affect other providers, ‘because if
they were to provide fibre in such an area, they would be able to deal’ with
passive fibre-ready infrastructure requirements in their contract with the
NBN Co is under obligation by the Government to perform its duties as
outlined in its Corporate Plan and in line with the relevant Government
policies. More broadly, NBN Co is established under Corporations Law and
operates under the Commonwealth Authorities Companies Act and so its directors
have a legal and commercial obligation to its customers and stakeholder
Ministers and through them to the Parliament.
However, the committee notes the concerns raised by the UTA in regard to
the responsive issue of statements. The committee suggests that internal
customer service protocols should be put in place within NBN Co to ensure that
the timeframe for issuing statements is completed within benchmarked customer
According to the DBCDE, the proposed sections in Division 3 are intended
to require developers to put in place passive fibre-ready infrastructure to
enable fibre to be laid to facilitate the rollout of the National Broadband
Network. The committee acknowledges that this is the intent of proposed
Division 3 and also notes that NBN Co will need to issue statements to ensure
eventual efficient fibre deployment.
The committee proposes that NBN Co should commit to specific timeframes,
to publish its performance against those timeframes, and that these commitments
be subject to regulatory oversight.
Proposed Subdivision B – Sale of building lots and building units
Proposed Subdivision B ensures that fibre-ready facilities are
installed in new developments to enable fibre rollout to occur quickly,
economically and with less disruption than a full retrofitting.
Constitutional corporations (eg. Pty Ltd and Inc. business entities and
statutory authorities) may not sell or lease lots or units in new developments,
‘unless there are fibre-ready facilities installed within or in proximity to
the lots or units.’
This restriction does not apply if there is an exemption arising either
legislative instrument made by the Minister under proposed section 372K;
- a contract for the installation of lines or fixed-line facilities being in place,
or the installation of lines or fixed-line facilities having commenced, or
civil works otherwise having commenced in a development as provided for under
proposed section 372P; or
- a statement has been
issued by NBN Co under proposed section 372J in respect of the particular
- There is no restriction on the ‘off-the-plan’ sale or lease of lots
Proposed subdivision C – NBN Co may issue statement about the
non-installation of optical fibre lines
Proposed subdivision C provides that NBN Co may issue a statement
about the non installation of optical fibre lines. The purpose of this is to clarity
whether a new development is outside the NBN’s long term fibre footprint. Where
a new development is outside the long term fibre footprint, it would not be
necessary for fibre-ready facilities to be installed.
Proposed section 372JA provides that NBN Co is obliged to
maintain a register (by electronic means that is accessible to the public) of
all statements issued in accordance with proposed subsection 372J(1). This
will enable developers and their customers ‘to ascertain whether the
fibre-ready facility requirement and, for constitutional corporations, the
fibre-ready installation requirement, apply in relation to a particular
Proposed Subdivision D - Exemptions
Proposed subsection 372K(1) enables the Minister (by legislative
instrument) to exempt certain new developments from:
- the fibre-ready
facility requirement; and
- the fibre-ready
installation requirement for constitutional corporations.
These exemptions could be used to exempt a project that may still be
receiving one or more basic utilities outside the proposed long-term coverage
of the rollout of the NBN by an NBN corporation. ‘Section 589 of the Act
would enable the Minister to incorporate by reference coverage maps or other
guidance prepared by an NBN corporation and the like to specify or ascertain
Proposed subsection 372K(1) would enable the Minister, where
appropriate ‘to permit the installation of fixed-line facilities other than fibre-ready
facilities where appropriate.’
Proposed subsection 372K(9) provides that an instrument
under subsection (1), (3), (5) or (7) may confer functions or powers on
the ACMA. For example, ‘an exemption instrument could provide for the ACMA to
determine whether specified circumstances under which an exemption was to
operate (such as remoteness or that a locality was outside NBN Co’s long term
fibre footprint) were applicable.’
Proposed Division 4 – Third party access regime
Proposed Division 4 establishes a ‘framework for carriers
to seek access to non-carrier fixed-line facilities with a view to supporting
the rollout of optical fibre.’ The provision of access may be commercially
negotiated or failing agreement, arbitrated by an agreed arbitrator or the Australian
Competition and Consumer Commission (ACCC) as the default arbitrator.
Proposed Division 4 also enables the Minister to:
- issue exemptions
through a legislative instrument.
- confer functions or
powers on the ACCC in relation to an exemption.
Proposed subsection 372NA(1) enables the ACCC to make a code (by
legislative instrument) which sets ‘out conditions that are to be complied
with’ in relation to the provision of access under Division 4.
The ACCC commented that the facilities access regime which would be
established under the Bill is ‘very similar to the facilities access regime
currently available to carriers under Schedule 1 of the Telecommunications Act.’
In addition, the ACCC stated that while it could make a code relating to
access, commercial agreements have been preferred to the current facilities
access code made by the ACCC in 1999 under Schedule 1 of the Telecommunications
Act. The ACCC stated:
Under the Bill, the ACCC may, by legislative instrument, make
a code relating to access. The development of this type of code would require
the ACCC to balance the benefits that might be available to the relevant
stakeholders from such a code with any regulatory burden. In the main,
commercial agreements have been preferred to the current facilities access code
which was made by the ACCC in 1999 (the 1999 Code) under Schedule 1 of the
Telecommunications Act 1997. If it decides whether to make a code under the
Bill, the ACCC would also consider whether to modify the 1999 Code or issue a
The committee acknowledges the ACCC’s comments that even though proposed
Division 4 specifies the ACCC may make a code for the facilities access regime,
‘commercial agreements’ are preferred format. In addition, the ACCC has stated
that it may revise or replace the 1999 Code established under the Telecommunications
The committee acknowledges that the ACCC is required to fulfil its
obligations under proposed Division 4 and supports the ACCC’s role as stated in
Proposed Division 5 – Exemption of certain projects
Proposed Division 5 sets out exemptions for pending projects
which meet certain criteria from the optical fibre line requirement under
proposed Division 2. A limited exemption is provided from the ‘fibre-ready
facility requirement’ and the ‘fibre-ready installation requirement’ under
proposed Division 3 for pending projects which meet certain criteria.
Proposed sections in Division 5 enable exemptions in certain
circumstances where it would be unreasonable to apply the rules contained in
the Bill. Such circumstances include where contracts have already been entered
into by developers, or where it would be too costly or inconvenient for
developers to halt works or the ‘installation of fixed lines or facilities in
The UTA put the view that the transitional arrangements in proposed
section 372P (included under Division 5) relate to those projects which were
underway before the commencement of the legislative provisions and offer no
protection for businesses. The UTA stated:
They offer no protection for businesses who, after the
commencement of the legislation, act in reliance of an absence of a legislative
instrument, or an existing legislative instrument, which may be later amended.
Additionally, they offer no protection from businesses who have been acting in
reliance on their existing land use approvals, and made irreversible investment
decisions, but nonetheless, have not reached the thresholds set out in the
Additionally, the UTA does not support Ministerial authority under the
Bill to vary the conditions of a legislative instrument. The UTA stated:
This power is inconsistent with the approach taken for land
use approvals (such as development consents/planning permits, mining leases,
etc) generally which, once issued, cannot normally be varied other than by application
of the benefitting party. Where a development consent has already been issued,
a subsequent change in policy on, say, dwelling density, does not impact on the
consent. It may affect new consents, but not old ones. Similarly, changes to
the building code cannot affect projects that have already received final
The UTA puts the view that the ‘risk premium required to secure debt and
equity finance to develop land will increase if the conditions relating to a
development may be varied at will by the regulator.’ The UTA stated:
The Minister’s power to unilaterally vary conditions could
even reduce the development potential of some land and reduce or remove
feasibility of some projects.
The UTA suggested that an investor requires certainty and in this
respect that proposed section 372P be amended to:
- provide that the
civil penalty provisions will be taken not to have been contravened where:
- a legislative instrument is imposed after a development consent/planning permit
has been issued; or
- a legislative instrument is amended after a development consent/planning permit
has been issued;
- and the conduct of
the person would have not been in breach of the civil penalty provisions if it
had been carried out at the time the consent/permit was issued.
The UTA was also critical that the proposed legislative instrument was
not available to industry or the wider community as part of the accompanying
documentation to the Bill.
The committee notes the concerns presented by the UTA and believes these
issues should be reconciled with the proposed provisions and relevant policy to
ensure there is no unintended consequence arising.
The committee believes that the issue raised in regard to the possible
impact on risk premiums of regular changes in development regulations requires
further investigation and that appropriate measures be put in place to
anticipate this type of outcome and rectify any negative consequence.
Proposed Division 6 – Miscellaneous
Proposed Division 6 creates new definitions to support the
operation of proposed Part 20A as well as the legislative instruments made by
the Minister therein contained. Proposed Division 6 clarifies that State and
Territory laws ‘operate concurrently with proposed Part 20A of the Act to the
extent that they are not inconsistent with the Bill.’
Proposed section 372W – Fibre-ready facility creates a definition
of ‘fibre-ready facility’ and covers the two categories of:
- an underground fixed-line
facility that is used in connection with an optical fibre line as specified by
legislative instrument; and
- any other fixed line
facility used in connection with an optical fibre line as specified by
The purpose of this is section is to enable the Minister to ‘specify
other types of fixed-line facilities, including above ground facilities, as
fibre-ready facilities individually or by class.’ The Explanatory Memorandum
Because fibre-ready facilities are for use in connection with
optical fibre cabling they will necessarily need to be designed and installed
with that purpose in mind. In the case of underground fibre-ready facilities,
for example, this would include ducting with gentle enough angles to allow the
ready deployment of fibre. More detailed specifications could be set out in
industry codes or standards, carrier specifications or in a Ministerial
The Greenfield Fibre Operators of Australia (GFOA) is opposed to
Ministerial authority to set standards and specifications according to NBN Co
requirements as this could limit competition. The GFOA explained:
... the Minister wants NBN Co to be a monopoly and that he
will therefore either set standards and specifications that only suit NBN Co
network design and business or be silent and allow NBN Co standards and
specifications to become the default standards and specifications as uncertainty
overcomes the property development industry.
In addition, GFOA commented that these standards prohibit innovation in
Greenfield developments and do not permit affordable deployment of free to air
television (FTA TV), Pay TV (television) and the like. The GFOA stated:
NBN Co standards and specifications are not suitable for
other innovative [Fibre-to-the-Premises] FTTP networks in Greenfields or
networks which permit the affordable deployment of FTA TV, PayTV, utility management
and other community services.
This issue is discussed further in Chapter 3.
OptiComm was of a similar view and stated:
The legislation SHOULD NOT stipulate NBN Co standards (which
have never been peer reviewed) as industry wide standards. Communications
Alliance standards are designed to provide a broader range of options and
encourage innovation within the industry.
TransACT stated it was concerned about the Minister’s authority to set
NBN Co specifications and standards by legislative instrument and would prefer the
Communications Alliance (CA) to set the standard, but that timing may be an
issue in this case. TransACT stated that it:
... is concerned about the potential for the Minister, under
these provisions, to specify NBN Co specifications or guidelines by legislative
instrument, thereby imposing inflexible and anti-competitive requirements on
infrastructure competitors of the NBN Co. While TransACT would prefer to see CA
industry endorsed codes or standards applied in the Bill it understands that
timing may preclude that from occurring.
TransACT suggests that provisions should be included in the Bill which
allow a developer to adhere to the chosen or alternate fibre providers
specifications or guidelines. TransACT commented that ‘in this instance, these
guidelines are well established, as.... fibre infrastructure providers have
been successfully adhering to relevant CA codes for more than five years.’
Telstra responded to the issues GFOA raised in regard to standard
setting and commented that the concerns raised by the GFOA are not relevant to
the content of the Bill. Telstra stated:
Any concerns relating to standard setting in this area has
already been addressed in previous legislation. The standard making powers in
the Bill refer to standards ensuring the interoperability of customer
equipment with the NBN or other superfast networks, rather than with the
standards required of the network builder. The Telecommunications Legislation
Amendment (National Broadband Network Measures – Access Arrangements) Act 2011,
in amending Part 21 of the Telecommunications Act 1997 provided the Australian
Communications and Media Authority (“ACMA”) with powers to make technical
standards relating to layer 2 bitstream services. There are general powers for
the making of Codes and Standards under sections 117 and 118 of the
Telecommunications Act which can be used by the Communications Alliance and the
ACMA to make the type of codes and standards that the GFOA Document is
referring to. Hence concerns raised by the GFOA Document are not relevant to
the content of the Bill.
The DBCDE stated that the Bill does not set out technical specifications
for fibre infrastructure in new developments, but rather gives ‘the Minister
some powers to make instruments to do so with regard to passive infrastructure
and to optical fibre lines in specified developments’ if necessary. The DBCDE
For fibre infrastructure to be able to serve its purpose
(e.g. to allow the ready deployment of fibre) and operate at an appropriate
level (e.g. in terms of speeds) across the many new developments constructed in
Australia each year, some degree of standardisation may be required. These
provisions provide a reserve power to fast-track this standardisation process
if required, noting that normal standardisation can sometimes be time consuming
and subject to gaming.
The Government’s policy in relation to specifications was set
out in the 9 December 2010 Policy Statement: NBN Co will provide specifications
for use where a developer wishes to use NBN Co. The specifications will also be
provided to the Communications Alliance with a view to having these specifications
endorsed for general use by industry as soon as possible.
This policy is also reflected in the Government’s Statement of
Expectations for the NBN and NBN Co.
The CA has indicated it has worked closely with NBN Co since it was
established and a range of telecommunications companies across Australia to:
Define the reference architecture of the NBN, designing
wholesale product descriptions and a range of other technical and operational
The CA stated it is presently reviewing all of its standards, codes and
guidelines documents to identify which will need to be revised ‘to take account
of the changed industry circumstances flowing from the NBN rollout.’
The CA advised:
The Operations Working Group, for example, is reviewing the
NBN Co Pit and Pipe specification to determine whether it would be appropriate
to define a Communications Alliance standard for fibre deployment. It is
anticipated that a range of other NBN-related issues will be reflected in
revised standards codes and guidelines during coming months.
The DBCDE has stated that the Bill does not set out technical
specifications for fibre infrastructure in new developments, but rather gives
‘the Minister some powers to make instruments to do so with regard to passive
infrastructure and to optical fibre lines in specified developments’ if
The committee also acknowledges the points made by Telstra that the Telecommunications
Legislation Amendment (National Broadband Network Measures – Access
Arrangements) Act 2011, in amending Part 21 of the Telecommunications Act 1997
provided the Australian Communications and Media Authority with powers to make
technical standards relating to layer 2 bitstream services.
The committee is of the view that a number of comments made by
contributors in this part are not relevant to the Bill. The committee has
outlined further the concerns of contributors in this area in Chapter 3.
Amendments to provisions in Part 21 – Technical regulation
The proposed amendments to provisions in Part 21 enable the ACMA
to ‘set standards for customer equipment and customer cabling to be connected
to the NBN or other superfast telecommunications networks.’ The Minister is
also enabled ‘to direct the ACMA to make technical standards under Division 3
and update directions powers in Division 9.’
The proposed amendments to provisions in Part 21 will ensure that ‘the
ACMA has sufficient powers to make technical standards’ if so required. This
will ‘assist with the operation of the NBN or other superfast
Comverge Networks suggested that the Bill should not include provisions
for standard setting by the Minister, rather it should be a body such as the CA.
Comverge Networks stated:
Essentially it has taken the country years to evolve away
from the old days of Telecom setting the monopoly standards to a broad-based,
albeit fractious industry grouping collaboratively arriving at standards. At
this stage there are numerous bodies capable of setting these standards,
including the Communications Alliance who are standing ready and able.
While we acknowledge and intensely disliked the frustrations
in the process this is far better than forcing the industry to accept what we
believe would be throwback and feature specific standards proposed by NBN Co.
To illustrate by referring to a similar field (not standards), we highlight
that the basic services proposed by NBN Co tie the country to the days of xDSL
(as opposed to a modern fibre network) and further note the mandatory bundling
of data and voice services is not a practise seen on the more open style
networks operated by the industry.
Comverge Networks recommended:
... that the Bill ensures the continuing collaborative standards
setting process with those numerous clauses allowing the political setting of
standards to be struck out.
The comments made by the DBCDE and Telstra in reference to proposed
Division 6 also apply to proposed Amendments to Part 21.
The committee acknowledges the view put forward by Comverge Networks
about the standard setting role of the CA.
General comments about the Bill
Several contributors to the inquiry were generally supportive of the certainty
the Bill provides to developers.
Telstra stated that the Bill provides clarity on the obligations of
developers and infrastructure providers in new developments which ‘will
facilitate a more streamlined application of the Government’s policy objective
of achieving fibre rollout in new developments.’ Telstra stated:
As the Universal Service Provider for Australia, Telstra has
a substantial interest in achieving such certainty. Telstra requires certainty
of its obligations and role in providing standard telephone services to
Australians on request. Telstra is also aware that the developer community is
seeking policy clarity to enable them to plan and build new homes and business
premises for the broader Australian community.
The Housing Industry Association (HIA) stated that it supported the
following elements of the Bill.
‘fibre-ready’ infrastructure in new developments where the NBN Co roll-out has
not yet proceeded to the area; and
- Incorporating full
fibre infrastructure in new developments where the NBN Co has completed its
roll out and provided services to existing homes to the area (as is currently
the case for copper facilities).’
The UDIA welcomed the ‘regulatory certainty that legislation will
provide’ and stated that in general ‘the development industry is very
supportive of the opportunity for improved telecommunications services to be
made available in Greenfield sites offered by the NBN.’
The HIA stated that the operation of the legislation and the impact on
new developments with less than 100 premises and on those with greater than 100
premises that elect to wait for the NBN may slow down land release across
Australia. The HIA recommended that supporting regulations and other
information be provided to the relevant stakeholders in a timely manner. The
Uncertainty around the operation of this legislation and the
subsequent impact on developments with less than 100 lots/dwellings and on
developments with more than 100 lots that elect to await the delivery of fibre
by the NBN, has the potential to slow down the release of much needed land
supply in all regions of Australia. Therefore the Bill, supporting regulations
and other information needs to be provided to the residential building and
development industry in a timely manner to ensure there is no negative impact
on housing affordability as a consequence of delayed processes.
TransACT commented that the potential impacts of the Bill within the NBN
framework need to be considered. TransACT stated:
TransACT believes that the Committee needs to consider not
only the potential impacts of specific provisions within the Fibre Deployment
Bill, but the greater impact of how this piece of legislation, together with
the government’s overall NBN policy framework, looks to enshrine the NBN Co as
the monopoly provider of fixed-line services in Australia potentially
displacing the private sector from the market.
The committee notes that there is general support for the Bill. The
committee acknowledges the broad concerns highlighted by various contributors to
the inquiry, especially the Greenfields fibre providers.
Some of the issues raised throughout the inquiry relate to the
Government’s policy which underpins the Bill and so do not have any legislative
consequence associated with the Bill.
The committee acknowledges that the Bill will provide certainty for
developers with the broad aim of requiring the installation of passive fibre
infrastructure in new developments in anticipation of the arrival of the NBN.
The committee recommends that the Telecommunications
Legislation Amendment (Fibre Deployment) Bill 2011 be passed.