Big win for Chorus on UFB consents — but only if it gets through Parliament
More good news for Chorus [NZX: CNU] after its copper price win, and positive investor reaction to the return of its dividend: there is finally some movement on the consent issues that have contributed to appalling delays with “non-standard” UFB fibre installs.
A discussion paper released by Communications Minister Amy Adams last year proposed land access reforms. Central to those was “deemed consent” (so, if Chorus or a UFB company doesn’t hear from all owners around a right-of-way (ROW), or involved in a multi-tenant building, within a set amount of time, it can deem they agree with it, and push ahead with a fibre installation.
Today Ms Adams announced a compromise over ROWs. When will it kick in? "That depends on the legislative process," a spokesman for Amy Adams says. "The aim is to have the bill introduced this year." Eyes will be on the UnitedFuture leader Peter Dunne, who has been notably hostile to resource consent reform.
This morning, Mr Dunne told NBR, "Having not seen the detail of the legislation I cannot give an absolute guarantee at this stage but, all other things being equal, I would expect to support it to at least the select committee stage."
InternetNZ work programme director Andrew Cushon says he hopes Mr Dunne does put his swing vote behind the legislation. Mr Cushen says the changes announced today are a "good set of moves that will help more New Zealanders get fibre faster. The deemed-consent approach will probably allow those who have valid concerns to be heard but not allow miscommunications and vexatiousness to hold up installs."
He adds, "There are plenty of anecdotal examples of people with connections held up for months because their neighbours are on holiday. We're seeing a lot of good news today."
Telecommunications Users Association (Tuanz) chief executive Craig Young also strongly backs today's moves, saying "property access for installations is one of the most important issues facing the UFB rollout."
A second phase of reforms, still to be detailed, will deal with the pain points for multi-tenant dwellings.
Deemed consent will go into effect for non-standard UFB installs down right of ways under two new categories. As the government outlines them, they are:
Category One Installations:
Methods that have no lasting impacts on property, such as those that only disturb grass or other soft surfaces. For these installations a statutory right will be provided for a network operator to get on with the installation after providing five working days’ notice. This is estimated to cover about 37% of installations in shared driveways.
Category Two Installations:
Methods that have some lasting impact on property, such as drilling a cable underground and leaving small pot holes to access the network every 10 metres or so. For these installations neighbours will be provided with a high-level design and given 15 working days to object on a limited number of grounds. If they do not object, they will be deemed to have consented. Category two is estimated to cover off approximately 51% of installations in shared driveways rights of way.
The remaining 12% of installation methods that are more invasive than these new categories will continue to be subject the existing requirement whereby all parties need to provide their consent.
See example photos here.
Chorus has repeatedly blamed consent issues for delays, which it recently told NBR are:
- median time to connect a single dwelling is 22 days;
- median time to connect mixed dwelling unit is 99 days; and
- median time to connect a dwelling down a right-of-way is 104 days.
Bear in mind 104 days is the median, so half of the customers will be waiting longer. It’s no wonder you don’t have to go far on social media to find UFB installation grumbles.
How much will it help?
What will the impact on the backlog be? It's difficult to gauge, given Chorus has repeatedly failed to reply to NBR questions about what percentage of its installations are “non-standard” (down right-of-ways or in multi-tenanted buildings).
Communications Minister Amy Adams says, “About 13% of all UFB orders require some form of permission for access to private property shared between neighbours, and about a quarter of these orders are cancelled due to problems obtaining permission.” That is, surprisingly few given the persuasiveness of delays.
A second factor is that Chorus chief executive Mark Ratcliffe recently said UFB companies would, collectively, have to hire twice as many technicians to deal with an upsurge in requests for fibre installations. Mr Ratcliffe says his company has increased the number of its fibre crews by 80 to 380 in the six months and, along with the whole industry, is “flat foot to the floor” on recruiting more staff (or at least, its contractors are redoubling their recruiting efforts).
The question will be whether the uptick in demand overwhelms the benefits from Ms Adams red-tape cutting. Critics, including retail ISPs, have told NBR that Chorus mismanagement of workflow and poor forecasting have also contributed to the backlog.
Chorus has been pushing for deemed consent since at least 2011. It finally got some traction mid-way through last year as Ms Adams released a discussion paper on the topic.
This morning, Chorus spokesman Nathan Beaumont told NBR, "Today’s announcement is a big step forward, and overall, the changes should make consenting process in a right of way and shared driveway simpler and faster once the legislation is passed (I understand legislation is expected to be finalised at the end of this year). We’re also pleased with the way the industry has worked together to support the government to come up with workable changes.
"We are keen to see proposals covering MDUs continue to progress as these installations remain difficult due to the multiple owners involved."