Second Ponds Creek, the new suburb in Sydney's North West is set to be Australia's largest fibre-to the-premises (FTTP) estate if Telstra gains confidence government regulation won't stifle its return on investment.

With the potential for 3200 fibre-connected dwellings, Second Ponds Creek dwarfs Telstra's proposed FTTP for 1400 residences in South East Queensland, but standard ADSL over copper may end up the only option.

A joint venture between NSW government department Landcom and developer Australand, Second Ponds Creek was conceived as a new paradigm in environmentally sustainable living with upwards of 100Mbps symmetrical high-speed Internet access offering VoIP, IPTV and other services all over one fibre connection.

Stuart McCowan, Landcom development director for Sydney's North West sector, said negotiations with Telstra to get FTTP installed throughout Second Ponds Creek have begun but regulatory issues remain a stumbling block.

"We're trying to get Telstra to agree to put in fibre optic cabling so that, from a data to the home point of view, it's up there with the best in the world, but there are issues with Telstra rolling that out," McCowan said. "Our issues are if the communications are made available, we would like [Telstra] to carry all forms of data, including TV, and bundle that in."

McCowan said because of Telstra's competitive regulation, a cloud hangs over wholesale use of the cabling and the way BigPond, and other ISPs, will use the fibre, which is "still being discussed".

If negotiations with Telstra, or "possibly another" carrier, are successful, fibre will be deployed alongside copper to each of the premises and from there it is a matter for the residents to "light up the fibre from the curb".

The designs for the standard copper infrastructure are being drafted and, once completed, the cabling will be laid and most likely handed over to Telstra to manage because, according to McCowan, Landcom does not want to manage infrastructure and "when you look at companies that can own that it's fairly limited in Australia".

Hence, with the infrastructure in Telstra's hands, each of the premises may be required to pay standard line rental fees.

ADSL2+ will also be deployed at local exchanges for broadband over copper which will be available to other ISPs and not "locked" by Telstra. McCowan is expecting a decision to be made within six months.

A Telstra spokesperson said the company is discussing a range of options for technology solutions with property development companies across Australia through Telstra's Urban Development Group, an unit established specifically for this purpose.

"Any arrangements with developers will be on commercial terms," the spokesperson said, adding Telstra is not able to disclose details of any discussions with developers.