Chorus pushing costs onto RSPs: TelstraClear

TelstraClear CEO Allan Freeth says Chorus is trying to make Retail Service Providers pay for some connection costs in the UFB build

TelstraClear is refusing to sign a wholesale agreement to provide retail services on Chorus’s Ultra Fast Broadband network because it says Chorus is trying to push some of the connection cost onto Retail Service Providers.

“What they’re trying to do is shift a series of costs that are now sitting on them, across to the Retail Service Providers,” says TelstraClear CEO Allan Freeth.

“They’re issues to do with connection. Under the Act Chorus gets money for a connection 15 metres from the boundary and five metres internally [inside the home]... what happens when you are 15 metres in and your house is still six metres away, who is going to pay for that, because Chorus don’t want to?”

Computerworld understands the issue has arisen during a trial of fibre to the premise that Chorus is conducting in the Auckland suburb of Albany. This is an area in which Chorus has completed the UFB build and has been paid by Crown Fibre Holdings (CFH) $1,118 for each premise passed, in a mix of debt and equity securities as per its arrangement.

Under the CFH agreement, Chorus must pay the cost of a “standard installation cost”, which is defined as follows:

• 15m of buried cable from the boundary; or

• One span of overhead fibre cable from an existing pole; or

• 100m of fibre cable in an existing pipe or new pipe in a provided trench; or

• 5m of internal fibre cable from the point where the lead-in enters the premises (external termination point).

Computerworld asked Chorus who will pay the extra cost if a house – such as one located in a back section – is more than 15 metres from the curb?

“It’s too early to say,” spokesperson Robin Kelly says in an email. “We’re working with the industry to agree the best way to address issues such as non-standard installations and our free introductory offer (to all RSPs) is helping to develop this approach.”

Crown Fibre Holdings CEO Graham Mitchell says he doesn’t view this as “an issue going forward” as it affects a “low, low percentage of properties.”

In contrast to the Chorus agreement, the Local Fibre company Ultra Fast Fibre, which is rolling out network in the central North Island, must foot the bill for the connection from the curb to the house regardless of how long it is.

“We all have different contracts with the government,” says Ultra Fast Fibre CEO Maxine Elliot. “For better or for worse, the contract that we have with the government for residential is our connections are free and then we provide 10 metres within the home. Ten metres will be a lot for most houses.”

Kelly says more than a dozen RSPs have signed UFB wholesale agreements. However Computerworld understands that Vodafone has yet to sign. When approached about the agreements, a spokesperson replied: “Vodafone are involved in ongoing negotiations and unfortunately cannot comment any further at this point.”