Tony Dooley

Developer obligations to provide telecommunications facilities when selling property

Tony Dooley

11 May 2016

Competition and Consumer Law

The National Broadband Network (‘NBN’) has resulted in a raft of new laws designed to facilitate the rollout of the ubiquitous new network. Amongst them was the inclusion of Part 20A in the Telecommunications Act (‘the Act’), which placed additional obligations on developers selling land or buildings. Developers cannot rely solely on meeting local council planning requirements, but are also required to install sufficient infrastructure to enable a telecommunications carrier to easily install lines into new properties. This is known as making the properties ‘fibre-ready’. The relevant infrastructure is usually a network of concrete pits and underground plastic pipes. It is not necessarily the case that NBN Co will install the actual lines into the pit and pipes, and often developers will engage another carrier to install and operate this infrastructure.

Importantly, section 372G(4) of Part 20A of the Act prohibits corporations from selling building lots or units unless a fibre-ready facility is installed in close proximity to the property. ‘Fibre-ready facility’ is defined in section 372W of the Act, and for single dwelling units, will usually be an underground conduit that can be used for the connection of an optical fibre line. ‘Close proximity’ is defined in section 372Y of the Act and requires that a fibre-ready facility is installed in sufficient proximity to the property to enable a line to be readily connected to the building lot or unit. Installing the fibre ready facility before or during the construction stage is far cheaper than after a building is finished, when underground boring may be required to install conduit beneath concrete driveways or structures.

Section 372G(4) of Part 20A is a civil penalty provision and pursuant to section 570 of the Act is subject to a penalty of up to $250,000 for each contravention, that is, for each building lot or unit that is sold without being fibre-ready.

We have seen examples of developers that have failed to install fibre-ready facilities, saying that the homeowner or a carrier is responsible for the installation and cost of the facilities. This is wrong and making such statements can place the developer in more trouble, as it could breach consumer legislation applicable to the sale of land. Sections 30(1)(g) and 152(1)(g) of the Australian Consumer Law (‘ACL’), prohibit persons in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land, making false or misleading representations concerning the existence or availability of facilities associated with the land. Substantial pecuniary penalties, in excess of $1 million, may be imposed for the breach of these subsections of the ACL.

Accordingly, developers must install fibre-ready facilities before selling land and ensure that representations made about the availability of facilities are accurate.