Government spends $43 billion to establish National Broadband Network

Tenders thrown out with Government going it alone through new company

The Federal Government will establish a new public company to build the next-generation National Broadband Network (NBN) across Australia.

In a press conference this morning, Prime Minister Kevin Rudd said it would spend $43 billion to create a new wholesale-only fibre optic network across Australia. The government-majority owned National Broadband Network Corporation will work in partnership with the private sector over the next 7-8 years to build the network across regional and capital cities.

The network will provide access of up to 100Mbps to end users and cover over 90 per cent of the nation.

Prime Minister Rudd said it then planned to sell-off its stake in the operations within five years of it being established. The decision represented a historic moment in Australia’s history, and was the largest infrastructure project ever laid out, he said.

“This injects a new player into the broadband market… a national, wholesale, open access broadband network,” he said. “It sets up a path for economic recovery and building a 21st century economy withy 21st century jobs.”

Rudd claimed the network would provide 25,000 jobs every year during the lifetime of the project, and up to 37,000 jobs during its peak. It will also add $37 billion to GDP, he said.

The decision follows month of negotiations with private consortiums under the NBN tender.

“We have tested the market but that has not produced an outcome which makes the best use of the taxpayers’ dollar,” Rudd said. “Right now we are dealing with a capital constrained world. We have acted on the advice of an expert panel... otherwise we wouldn’t be here.

“There were two options – sit back, or get on and do it. And we intend to [get on and] do that.”

The first step will see the Government outlay $250 million and build a fibre optic backbone in regional Australia, Senator Stephen Conroy said.

“The conditions are that it is open access and wholesale only,” he said. “We will have an implementation study over the next eight or nine months to work out the issues and challenges.”

The Government will also work with the Tasmanian Government on its proposal for high-speed services in that state and hoped to get things rolling by mid-year.

“We’re negotiating with the Tasmanian Government over the next 24 hours as to the rollout… we believe they are ready to go,” Conroy said.

Tags Senator Stephen ConroyKevin RuddbroadbandNBN

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4 Comments

Anonymous

1

Best decision for everybody

Well, nearly everybody. It won't be popular in one boardroom, but then they are not known for making good decisions in the public interest anyway.

Planning ahead and seed funding a national FTTP network is statesmanlike and very welcome.

Now if only Mr Rudd and Senator Conroy could achieve the same level of calm common sense and reality about the ridiculous Internet filter plan. . .

Anonymous

2

Build it but don't sell it

FTTP is exactly what Australia needs but why repeat the Telstra mistake and sell it off once it's built.

I agree the filter idea should be scrapped.

Big-T Little C

3

Government Admit Market has Failed

Creating a new company to wholesale a next generation broadband technology. Mmmm ... sounds like structural separation by stealth to me. And how likely is it that the new fraudband company will embrace the governments crazy content filter idea.

What a colossal waste of money. Save everybody the decades of debt and just get on with the structural separation of Telstra.

Peter Downey

4

It was a huge mistake to sell of Telstra in the first Place. If the Singaporean Government can run a successful Telecommunications company why cant we? But we must now face the reality and FTTH is the right decision.
The next hurdle is that we must not build this 21St century network using 18Th century technology by stringing it up in the air on power poles where it is open to the vagarities of the elements. It is no coincidence that the greatest area for failure is the last mile where overhead wires fail because of storm and tempest, bush fires, Vehicles colliding with poles, etc instead we should adopt the European experience and bury the cable where it will be safe and secure. A strategic piece of communications infrastructure such as this must be designed to take into account areas of weakness that could see the system fail at critical times such as were apparant in the Canberra and later the Victorian bush fires denying individuals and communities essential communications and the authorities information critical to the planning and execution of a response to the emergency.

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