NBN backflip after legal threat, health risks

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By Fran Foo

THE threat of compensation claims and the prospect of putting lives at risk during blackouts led to major changes to the NBN policy.

The government caved in to pressure after a vocal telecommunications industry urged it to adopt a higher number of access points than NBN Co originally wanted.

NBN Co, the company charged with building the $36 billion fibre network, had initially planned on building only 14 points of interconnect (POIs) where other telcos connect into the NBN.

Telecommunications companies railed against the idea, as they wanted up to 200 access points to keep their businesses viable.

In October, AAPT chief Paul Broad voiced his concerns to The Australian, raising the compensation issue.

“If they have seven or 14 POIs, then they are going to have to overbuild all of us, so they had better start writing cheques for compensation. All they will do with that small number is re-monopolise the industry,” he said.

“If you want to enhance competition and you want consumers to benefit, then you use the fibre in the ground that is there already. That means you should have about 500 points to start with, because that’s how many exchanges the telco industry has equipment in at the moment.”

On December 8, The Australian reported that AAPT was examining its legal options and could claim more than $1bn in compensation if the number of POIs were not sufficiently increased.

The government then accepted the regulator’s recommendation to build 120 access points.

A compulsory back-up battery system was never on the cards under NBN Co’s original plans, but a report in The Australian two months ago forced a rethink.

NBN Co had planned for all network users to pay for the back-up system, including a lead acid battery, from their own pockets.

Once the report highlighted that NBN users without back-up would not be able to use their telephones during a blackout — potentially putting users in a life-threatening situation — the government intervened and told NBN Co to make the scheme mandatory.

Source: www.theaustralian.com.au