Minister coy on UFB cost figures

TOM PULLAR-STRECKER
Last updated 05:00 17/09/2012

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The Government has acknowledged for the first time that it has an estimate of the number of households that may be hit with "non-standard connection charges" to hook up to the ultrafast broadband network.

However, Communications Minister Amy Adams refused an Official Information Act request to release the figure.

She said it was commercially sensitive and making it public could prejudice negotiations between the Crown and companies building the $3.5 billion ultrafast broadband (UFB) network.

The Commerce Commission dropped a bombshell on the industry in December when it revealed that a "significant" number of home owners with awkward access might have to pay hundreds or even thousands of dollars to connect to the UFB network, even though it was "usually presumed there would be no charge".

Chorus won the contract to build 70 per cent of the network. Under its contract with Crown-owned UFB investment vehicle Crown Fibre Holdings, it is entitled to charge telecommunications retailers the extra cost of laying fibre to premises that can't be wired up using either a 15-metre underground duct or a 30m single-span aerial cable drop.

Other UFB network builders are being more generous about how they define a non-standard connection but can still impose charges in some instances, the commission revealed.

Telecommunications retailers have warned they will have little choice but to pass the charges on to consumers, either upfront or by requiring them to sign up to fixed-term contracts that would include a component to recover the fees. Chorus has agreed to waive the charges until the end of the year.

Adams signalled in June that she was optimistic a longer-term accommodation could be negotiated that most people would be happy with, while Chorus spokesman Robin Kelly said it was keen to work with the industry to find a "pragmatic solution".

Vodafone chief executive Russell Stanners told BusinessDay last week that it was still waiting for clarity on the outcome of the talks between Crown Fibre and UFB network-builders on the long term treatment of non-standard installs, before it would begin retailing UFB services.

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- © Fairfax NZ News

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