Chorus releases proposed pricing for unbundled FTTP offering

The service gives retail service providers access to Chorus’ passive infrastructure

Chorus is seeking industry feedback on proposed pricing for its unbundled GPON fibre to the premises service, giving the industry until 7 May 2019 to respond.

The service gives retail service providers access to Chorus’ passive infrastructure — fibre optic cables, duct, and poles to which RSPs add their own electronics to create a broadband service for their customers.

It has been made possible by a recent amendment to the Telecommunications Act that enables unbundled fibre services to be offered by Chorus and other local fibre companies on commercial terms from 1 January 2020.

Chorus has proposed a monthly access charge of $28.70 per month to cover access to the fibre between the premise and the splitter, the point in the network where shared fibres are split into the individual fibres that go to each customer's premise. Typically up to 16 customers can be connected to each splitter.

In addition it proposes RSPs pay $200 per month to access the feeder fibre from each splitter to a central office where they can pick up the unbundled service.

For RSPs this means the cost of each unbundled connection will vary depending on the number of premises it has connected to each splitter.

Chorus chief customer officer Ed Hyde said release of the proposed pricing represented the latest step in a near year long process of industry engagement that has sought extensive feedback on the product and processes to enable unbundled fibre.

“Unbundling economics mean that it is most likely to appeal to the larger RSPs, so the proposed pricing released today seeks to strike a fair balance for all, by enabling RSPs who choose to unbundle to deliver their services, at the same time as ensuring a competitive playing field for all other RSPs," he said.

“We are also seeking to ensure Chorus’ own ability to generate a return from its billions of dollars of investment in fibre, which is essential for ongoing investment and maintenance of strategically critical infrastructure.”

Chorus said passive infrastructure costs accounted for 97 per cent of its capital investment in its fibre to the home network and the cost of the electronics the remaining three per cent.

“One of the most challenging aspects of developing this pricing is that the avoided costs through not providing broadband electronics are minimal," Hyde said.

“While I’m sure some RSPs will argue for even lower input costs, the economic and technical reality of unbundling a newly-built, world-class fibre network is much more challenging than unbundling much older, often fully depreciated, copper network assets that have a fundamentally different architecture."

Chorus said the network had been designed in anticipation of it offering unbundled fibre.

For example, providing sufficient space for RSPs to install their own broadband electronics at key points in the network and providing a second fibre to each premise to support the service.

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