Chorus, which is building around 70 percent of the government’s $1.35 billion Ultra Fast Broadband network, has failed to release its cost strategy for non-standard UFB installations by September as it earlier indicated.
Chorus is still in discussions with the industry and “working through it”, spokesperson Robin Kelly told Computerworld as it went to press.
Crown Fibre Holdings’ (CFH) contract with Chorus only covers the cost of fibre installs up to 15 metres from the kerb to the home or business. This differs to contracts with Local Fibre Companies (LFC) Northpower, Ultra Fast Fibre, and Enable where the minimum is 30 metres.
This raises the question of who pays for installs that fall outside of the minimum; the government, Chorus, Retail Service Providers (RSP), or consumers.
TUANZ CEO Paul Brislen says the price of non-standard builds should be absorbed by Chorus. Any attempts to charge it to customers would put another barrier to the adoption of the technology, and charging the RSPs would be charging customers by proxy as the carriers would recoup costs by increasing their prices.
Telecom and Vodafone have yet to release any UFB pricing details, lagging behind smaller players like Orcon and Slingshot.
Last month Telecom CEO Simon Moutter told Computerworld that the large upfront costs for a non-standard install would make it a “tough sell” to consumers. His counterpart at Vodafone, Russell Stanners, says connecting to fibre has been a poor experience for customers.
Brislen says without clarification of who pays for the costs it would be difficult for the larger RSPs to release their pricing.
“There’s a big disconnect between Chorus, Crown Fibre Holdings, and the rest of us,” says Brislen. “There’s a lack of understanding how important this issue is to the RSPs at a ministerial level.”
Brislen says the lack of clarity around who pays for the non-standard installs is due to shortcomings with CFH’s contract with Chorus.
“They should have negotiated a better contract,” says Brislen.
“Chorus has a lot of incentive not to roll this thing out. They have all the copper in the ground and want to get full use out of its life.” says Brislen, who says he wants the government to release more detail about its contract with Chorus.
Rohan MacMahon, strategy director at CFH, says the government discussions are ongoing.
“Minister Adams has indicated that the government appreciates the importance of resolving this issue as quickly as possible,” says MacMahon
As for claims that CFH’s contract with Chorus was poorly negotiated, MacMahon says aspects of the contract are favourable to consumers for such “complex matters” as that involved in the UFB.