Telstra will pull out its copper lines and replace them with fibre at 1500 homes in Point Cook near Melbourne, in an upgrade that will now act as a field trial for the brownfields deployment of the NBN.

NBN Co’s network engineers will gain access to data gleaned from the exercise as part of a negotiated ‘terms of engagement’ with Telstra announced today.

A spokesman for Telstra said the upgrade had been in the works but the information-sharing component of the project was new.

The area is a known broadband blackspot, according to several industry sources.

“Point Cook has experienced significant growth over the last decade or so,” the Telstra spokesman said.

“There’s extremely high demand for broadband there. There’s lots of pair gain systems but not enough access to ADSL so as we were exploring how to rectify that, providing fibre made the most sense.

“[NBN Co] can [now] take advantage of the lessons learned from that build.”

The spokesman said the fibre replacement project would start immediately and be completed in May next year.

“Once the deployment is completed, Telstra will trial an interim wholesale offering over the fibre, with the detail of both retail and wholesale offerings to be released closer to the build’s completion,” it said in a separate statement.

The project appears likely to act as a significant pilot for how the Government and NBN Co could upgrade Telstra’s copper network, including its ducts and pipes, to fibre should they be able to negotiate with Telstra to sell its assets into the up to $43 billion project.

Point Cook is already home to a greenfields fibre network in the Alamanda Estate. That network was built by Opticomm and launched by Communications Minister Stephen Conroy last week.

Opticomm itself is also involved in a brownfields fibre deployment of its own after all but winning a deal with Tasmania’s NBN Co subsidiary to connect homes in three Tasmanian communities to street fibre.

That deployment would also be keenly watched by NBN Co and other industry observers, iTnews reported.

Is Telstra agreement close?

The terms of engagement announced today set out a “preferred model for any agreement between the parties that would see a progressive transition from Telstra’s copper access to a fibre to the premises NBN.”

NBN Co expanded on this by saying it believed “that continuing to invest in maintaining older infrastructure when a new fibre network is available would not produce the best outcome for telecommunications retailers and consumers.”

NBN Co said it believed “the most sensible solution for the industry is to share passive infrastructure wherever possible (exchanges, inter-exchange backhaul, and ducts) to reduce duplication of infrastructure, provided the terms on which those assets are shared are fair and reasonable to both parties.”

All that remains, it appears, is for all parties to agree on some form of compensation.

“No commercial terms have yet been agreed,” NBN Co said.

Government still pursuing regulatory bill

Communications Minister Stephen Conroy said that the Government remained “determined” to debate and pass its telecommunications regulatory reform bill “as a matter of priority in the new year”.

This was despite an admission that if Telstra accepted the preferred model outlined in the terms of engagement, it would “deliver structural separation”.

Conroy said the Government remained concerned about delivering “improved competitive outcomes” during any transition period. It would “closely consult with the ACCC” on the issue, he said.