Conroy confirms developers won’t have to pay to connect homes to NBN

Property developers have welcomed an announcement from communications minister Stephen Conroy confirming developers will not be forced to carry the cost of connecting new houses to the National Broadband Network.

Instead, Conroy said yesterday that from January 1, the NBN Co. will front the cost of connection for all new broad acre developments and infill developments where fibre is ready for service. For infill developments of less than 100 premises, Telstra will be responsible for delivering copper infrastructure.

The decision ends months of speculation and argument from the housing and construction industries, which threatened to even stop working unless the Government made it clear who would be paying for connecting new homes to the network.

“Given the importance of the task, the Government has decided to phase in the introduction of NBN Co’s provider of last resort obligations announced on June 20, 2010,” Conroy said yesterday.

The decision was met with praise by the Urban Development Institute of Australia, the Residential Development Council and the Housing Industry Association, all of which say the decision will create certainty for developers in creating new estates.

Kristin Tomkins, senior executive director of building, development and environment at the Housing Industry Association, says the decision makes it clear that developers will not be charged for connecting homes to the network.

“This announcement is a confirmation of the Government and NBN Co. announcement back in July, but it defines the detail we have been looking for and we are quite pleased to have that information.”

“Our position has been that it would be unfair for new developers to pay for connecting the network when existing developments would be connected for free… so we are pleased to have that information provided to us now.”

National president of the UBIA, Peter Sherrie, said in a statement that the decision was made after consultation with the Government and that it was a “sensible solution that benefits new home buyers”.

Industry analysts were concerned that forcing developers to front the cost for connecting new homes would see those costs passed onto new home buyers.

The Government points out that while the NBN is being constructed, over 1.9 million new homes will be built.

The new decision means the NBN Co. will be responsible for the installation of fibre in all broad acre developments, all infill developments where fibre is ready for service and connection, and newly approved infill developments of 100 or more premises.

For infill developments of less than 100 premises, Telstra will be responsible for delivering infrastructure and services.

Developers must contact NBN Co. so fibre can be arranged and then installed in the new developments.

But Conroy also points out that these arrangements are not exclusive, and that any developer can request any provider service their estate. Only NBN Co. and Telstra must respond to request for connections.

The only costs developers will meet will be fees for ensuring that trenching and ducting are installed, and fibre-ready to NBN Co.’s specifications.

Residential Development Council executive director Caryn Kakas also said the decision ensures that costs won’t be passed on to buyers.

“The Residential Development Council has been working constructively with the Federal Government and NBN Co. for some time in order to get things right and it’s great to see that there will be no additional costs to consumers for the installation of broadband.”

Conroy said the Government will now work with the states and territories to ensure the plans are rolled out and explained to developers.