Should an OC use NBN or another provider for connecting to optical fibre?

What’s happened to the NBN?

In 2009 the then federal government announced a plan to build a brand new wholesale-only, open-access network to deliver high-speed broadband and telephony services. This National Broadband Network (NBN) was to be built bya government enterprise, NBN Co. It aimed to lay optical Fibre-to-the-Premises (FTTP) connections to 93% of Australian homes and businesses, delivering Internet speeds initially of 100 megabits per second (Mbps). Planned for completion in 2020/2021 this represented the largest infrastructure project ever to be undertaken in Australia.

While the NBN conceptattracted strong and continuing public support building this new network has faced significant commercial, technical, management and cost issues. The new federal government elected in September 2013 initiated a strategic review of the NBN. The Review found that the rollout of the FTTP network was almost 50% percent behind schedule; that it would cost significantly more and that it would not be completed until at least five years later than originally envisaged. This delay and cost blowout would also result in much higher retail Internet prices for businesses and consumers, as NBN Co. was required to achieve a commercial return.

In December 2013 the government announced that it had accepted the recommendation of the Strategic Review to instead implement a “multi-technology” approach to the NBN. This involves a mix of FTTP (mainly in high revenue potential areas such as business districts), fibre-to-the-node (FTTN), which will rely on existing copper wires for the final link to individual premises, and use of the hybrid fibre-coaxial (HFC) cables which had been deployed during the 1990s by Foxtel and Optus to deliver pay TV. The monopoly role of NBN Co would also end, with competitors being allowed to offer wholesale and retail broadband services using their own infrastructure. The Review concluded that this approach would deliver speeds of at least 50 Mbps and up to 100Mbps to everyone by 2019. The government argues that it will result in faster completion of the NBN, at lower overall costs as well as cheaperretail prices.

How do changes to the NBN affect multi-dwelling units such as strata buildings?

The recent strategic review of the NBN found that almost 180,000 of 227,000 established premises passed so far by fibre are either still waiting for broadband services or are unable to connect. The review also found that althoughmulti-dwelling units, such as apartments and commercial buildings, represent around 30% of all premises passed by fibre very few had actually been connected so far, as NBN Co “had not determined the appropriate approach to cabling such diverse buildings”. In other words under the original NBN model is it very likely that most stratas, especially in older buildings, would be among the last to be connected to the network due to the complexity, diversity and cost of running fibre to individual units.

It is too early to be definitive on how planned changes to the NBN rollout will impact multi-dwelling units. However a number of Internet Service Providers (ISPs) have foreshadowed their intention to take advantage of the new NBN model to offerFibre-to-the-Basement (FTTB) broadband services to multi-dwelling units. FTTB runs optical fibre to the basement of buildings and uses existing copper within the building to deliver connection to individual units.

Trials have shown that FTTB can provide speeds of up to 100Mbps download and 40Mbps upload. Some ISPs have indicated that their planned FTTB services will include features such as unlimited downloads, home phone line rental, unlimited local and standard national calls to landlines, a certain number of international call minutes per month and a Wi-Fi modem, at prices comparable to current ADSL2+ plans. NBN Co is also understood to be considering using a similar approach, although the timing and pricing is unclear. NBN Co and ISPs may also decide to offer FTTP to multi-dwelling units in some circumstances.

An ISP has approached our OC offering to provide broadband services to our building. What do we do?

The OCN is not in a position to make recommendations about specific broadband service offers. In any case due to the wide variation in individual circumstances it is unlikely that one particular service or technology solution would be appropriate for everyone.

However the OC can take a methodical approach to assessing any offer, enabling the OC to make a considered, fact-based decision on whether the offer is in the interests of its lot owners:

  • Ensure that all member of the Executive Committee have a shared understanding of basic concepts underlying broadband services (Appendix 1)
  • Undertake an Audit of building telecommunications infrastructure so that the OC is aware of any site or other physical considerations (such as space limitations) which may impact on the design or layout of equipment necessary to support broadband services (Appendix 2)
  • Conduct a Survey of Lot Owners to determine their current arrangements for Internet access as well as their likely attitude to taking up the offer of upgraded broadband services (Appendix 3)
  • Open up a dialogue with the ISP to confirm the exact nature of the offer as well as the contractual terms and conditions being proposed (Appendix 4)

At the end of this process the OC should be well placed to make an informed decision. The OC wouldbe wise to consult further with Lot Owners as it makes its investigations. The OC would need toobtain owners’ approval at a General Meeting before entering into a formal broadband contract with the ISP.