Government locks down $2 billion Communications Fund

Labor refused access to fund proceeds for its own network

Labor's Fibre-to-the-Node (FttN) broadband plans have been jeopardized by a federal government move to lock down the $2 billion Communications Fund, which was set to be financial backbone of the opposition's network.

National ICT minister Helen Coonan said the Telecommunications Legislation Amendment (Protecting Services for Rural and Regional Australia into the Future) Bill is designed to preserve the funds for allocation to regional broadband initiatives.

The bill, which passed through the senate this week, will restrict a Labor government to spending only the interest earned from the fund's investments - up to $400 million every three years.

The Opposition's FttN network is based on Telstra's 2005 proposal, which has been fully costed at $8 billion of government and private funds and will be rolled out over five years.

The network will use $4.7 billion of public funding derived from the Communications Fund and the Future Fund's 17 percent stake in Telstra.

"Labor has committed to drain the entire $2 billion from the Communications Fund, rob the bush of its ongoing funding, and squander it on a commercially viable network in metropolitan areas which the industry has already publicly stated it can build without any taxpayer funds," Coonan said.

"Under the Australia Connected program, Australia will soon have multiple high speed broadband networks including, WiMAX, ADSL2+ and following the completion of the competitive assessment process, another high speed broadband network, likely to be fibre.

"Labor's proposed broadband network is estimated to only reach around 75 per cent of the population, leaving 25 per cent of Australians, all in rural and regional areas, stranded without access to high speed broadband and without the Communications Fund to provide for any future service upgrades."

In a twist, Shadow Minister for Communications and IT, Stephen Conroy, this week said an opposition government will jointly build and integrate the government-backed OPEL WiMAX network, with its own national Fibre-to-the-Node (FttN) network.

Conroy said a Labor government will "welcome any commercial interest" in linking the OPEL network with its proposed national FttN network, confirming the opposition's promise to honour the contract if it is signed before the election.

The Optus-Elders WiMAX network was officially approved this week by the Department of Communications, Information Technology and the Arts (DCITA) for construction across regional Australia by June 2009.

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