Homebuyers in new developments might have to fork over thousands of dollars to get connected to the NBN – fees the rest of the community won’t have to pay.
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This proposal forms part of a federal government policy document on the building of national broadband infrastructure in new developments – also known as greenfield sites.
The policy, which is up for discussion, proposes charging retail providers a $300 one-off connection fee to each home in a new development.
The government document anticipates this will be passed on to the homeowner.
Also, there is a proposed ‘‘deployment charge’’ of $600 for houses and $400 for apartments. This would be paid by the developer but likely passed on to the homebuyer as part of the house price.
Developers will also be liable for ‘‘backhaul costs’’ – the cost to connect the development to the existing broadband network infrastructure. This equates to up to 50per cent of the first $1000 in costs per lot and 100per cent of any costs after that. Again, this cost is likely to be passed on to the home buyer. All up it would mean at least $1400 in charges those in existing homes do not pay.
In a submission to the document, the Urban Development Institute of Australia (UDIA) slammed the charges.
‘‘This will negatively impact on housing affordability and economic activity in the sector, and will unfairly burden new homebuyers with paying for infrastructure that the rest of the community gets for free,’’ the submission states.
‘‘Fundamentally, UDIA believes that savings to the government in rolling out the NBN must come from improving efficiency and reducing costs, not by inequitably and unjustly cost shifting to new homebuyers.’’
The UDIA also criticised the back-haul charges, because of the unfairness to new homebuyers but also the potential disincentive it offers for developers of new sites.
‘‘It is likely that in cases where backhaul must be brought to a new greenfield area, the first developer to that area will have to cover the cost of backhaul to the area, whilst subsequent developments are able to free ride off that initial investment,’’ the submission stated.
‘‘This creates a first-mover disadvantage that is likely to discourage developers from developing new areas, distorting investment, consumer purchasing decisions, and the supply of new housing.’’
A spokesman for the federal Department of Communications said the charges were aimed at improving the existing arrangements that ‘‘stifled competition by unfairly tilting the playing field against private infrastructure providers’’. He also disputed the UDIA’s claim of unfairness.
‘‘It is standard practice for developers to pay for utilities, such as water, gas and electricity, to service their developments. People in new developments are getting new infrastructure whereas people in brownfields areas already have infrastructure which they have contributed to, typically by paying the cost of being connected to a network at some stage.’’