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Owners' corporation as Internet Service Provider?
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Malcolm
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03/06/2018 - 12:00 pm
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I’m in a block of 40 units in inner-city Sydney. Our SC has been looking into connecting the building to a high-speed wholesale internet connection (1Gbps fibre) and connecting up all units to share the connection using an internal (common-property) network. In principle we can get gigabit speed to each unit at a very good price.

However, the bulk of the costs are fixed, so the average cost per unit is attractive ($60/month) if all units use it, but it gets more expensive if the costs are divided among fewer people. Also, it seems unfair to pay the costs out of levies if some lots do not join in and gain the benefit.

As an alternative to funding from levies we could make a 143(2) by-law and sign up units to pay for the service separately. But as half the units are tenanted, getting owners on board could be a challenge. We would also have to set up a system for billing (although perhaps our strata managers could help here, I haven’t asked).

Does anyone have any advice, if not with shared internet, experience with shared utilities of any kind that are billed separately to levies?

Thanks in advance!

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tharra
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03/06/2018 - 2:36 pm
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I’m not sure of the legalities of what you want to do & I have no experience with utilities apart from common area services, but herding cats sounds easier than turning the OC into a retail service provider for communications. Locking people into/herding them towards a particular provider is going to be very challenging if that is what you are proposing.

If the gigabit internal building network is to be delivered via building copper I’d be asking for more details & real world examples. Network speeds tend to deteriorate when they leave the lab & marketing materials. 😉

I’d be researching the wholesaler & their performance very carefully & asking questions at a tech. based forum like Whirlpool: https://forums.whirlpool.net.au/

Another path – our OC went through the NBN technology choice area switch program & had NBN fibre pulled to each apartment. We now have a building of very happy residents, tenants & businesses who choose their own service providers. More details here: https://www2.nbnco.com.au/residential/learn/network-technology/technology-choice-program/area-switch.html

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Malcolm
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04/06/2018 - 7:22 am
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Thanks tharra! I didn’t know about nbn area switch, so I’ll check that out.

We have an in-house technical enthusiast so I’m mostly leaving that aspect aside.

The process we had in mind was something like:

  1. poll owners to make sure there is enough interest/support
  2. EGM to approve spend and/or by-law
  3. install to basement by wholesale provider
  4. install central hardware (OC; one off fixed cost of a few $K)
  5. install to apartments (managed by OC)
  6. retain commercial support contractor to do tech support

Payment models could be:

a) funded from levies OR

b) sign up per interested lot, and then fixed extra payment covering one equal share of monthly costs

OC would be locked into a contract with wholesale provider (24-48 months) so it would make sense to get lots to sign up for the same period.

This would not stop people going their own way for internet, but under option a) they wouldn’t be able to opt out of paying for the shared connection.

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tharra
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05/06/2018 - 8:40 am
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If I was in your strata plan I’d be voting strenuously against this proposal, particularly if it locks people into a provider or a narrow range of providers who purchase their wholesale service. Search for ‘fibre estate’ over at Whirlpool for some background.

Who is offering this service? There might be more info about them out there in tech land.

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Malcolm
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05/06/2018 - 5:25 pm
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Thanks for your reaction tharra! I’m interested to know more about what you object to.

The background to this is that a tech-savvy lot owner is interested in getting a faster internet connection than we have now (ADSL) or will be available via nbn. So he has got quotes from a number of different wholesale providers who can offer a fibre connection to the building. Sharing the connection and the costs across the scheme makes it affordable

As I said in the original post, rather than covering the costs via levies, we could set things up so that the OC charges only those lots who opt in. Either way, the building will be connected to nbn so residents will always have other options for their internet.

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05/06/2018 - 9:24 pm
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Hi Malcom, you may be able to achieve the same outcome by talking to a retailer instead? I know that for a while TPG was installing fibre in buildings? I’d say if there are any setup costs involved you could vote them at an AGM but then you have the benefits only for those who want the service and you don’t have to administer it. I would explain to the owners opposed to it that making fast internet possible definitely adds value, attractivity and therefore higher rents…

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Malcolm
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05/06/2018 - 9:52 pm
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Thanks. We’ve looked into several different wholesale and retail offerings including TPG. While it is definitely less of a headache for the OC, the retail option offers slower connection speeds and is possibly more expensive per lot.

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tharra
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06/06/2018 - 8:24 am
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Malcolm said
Thanks for your reaction tharra! I’m interested to know more about what you object to.

I am that tech savvy person in my building. 😉 We worked to get a communications solution which works much more like a utility such as water & power. i.e. individual lot owners can choose their retailer (or 4 – the beauty of NBN fibre is that you can have 4 data connections running simultaneously) & the Owner’s Corporation has no input/care factor into that decision. They can have medical alarms, faxes, security alarms, business grade services whatever they want by choosing an appropriate retail service provider. Or they can choose to not use any NBN service & just use their mobiles. There are no ongoing costs for the Owner’s Corporation associated with the NBN tech choice solution. No one on the strata committee has to be the IT geek for the whole building. The solution will outlast the current skillset of the committee & interest of the residents.

I think you need to do more homework. Be careful of installing a white elephant consuming human & $ resources which occupants may not want in 1-2 years time if there are other communications options.

I’m also not sure what happens if the Owner’s Corporation effectively becomes the marketing arm for one provider because they have a vested interest in keeping costs low. The conflict of interest would make me wary.

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imaynotbeperfect
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03/07/2018 - 1:39 pm
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If you are going to be reselling internet or phone services just be careful of your obligations under the Telecommunications legislation.  There are carriers (like NBN and Telstra and TPG) but if you’re taking a bulk service from one of them and reselling it you might find yourself falling under the definition of a Carriage Service Provider who have their own obligations. 

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Malcolm
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03/07/2018 - 9:15 pm
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Thanks imaynotbeperfect. My understanding of the arrangement is that the OC would be purchasing the service for the use of its collective owners, and this would not be reselling.

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