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Telecommunications Infrastructure in New Developments

Regulation Impact Statement – Department of Communications

On 27 May 2015, the Minister for Communications released the Government’s policy on the provision of telecommunications infrastructure in new developments. The new policy was effective from 1 March 2015. A Regulation Impact Statement (RIS) was prepared and certified by the Department of Communications under the Australian Government’s best practice regulation requirements, and has been assessed as compliant and consistent with best practice by the Office of Best Practice Regulation (OBPR). The RIS identifies the problem as one of competitive neutrality. NBN Co did not previously charge property developers upfront to build fibre-to-the-premises (FTTP) telecommunications infrastructure in new developments. In contrast, smaller alternative infrastructure providers competing with NBN Co. needed to charge developers upfront to recover their costs. As a result, there was an incentive for developers to use NBN Co rather than alternative providers, undermining business opportunities for those alternative providers. The RIS considers options to encourage sustainable competition and efficiency in the sector. It considers the interests of developers and consumers as well as the Government, NBN Co. and alternative infrastructure providers in evaluating the different policy options. The RIS concludes that the best option is for NBN Co to charge developers for the provision of FTTP infrastructure on a partial upfront cost recovery basis. It is expected partial charging will allow alternative providers to compete on a more level playing field with NBN Co, thereby improving efficiency and innovation in the servicing of new developments, while still delivering acceptable outcomes for consumers and developers. The Department of Communications intends to evaluate the effectiveness of the new policy within three years of implementation. The proposal is expected to have average annual regulatory saving of $61.3 million. The OBPR has agreed to this regulatory cost saving.