NBN will be tested in Tasmania

Rudd says access costs determined after Apple Isle build

Tasmania will be the guinea pig for determining cost and take-up of the $43 billion National Broadband Network (NBN).

The coalition has claimed NBN access prices will need to be as high as $200 for the joint state-private owned NBN Company to achieve a financial return within the slated eight year period. Some more moderate experts suggest access prices could be about $70 over a longer time frame or with greater take-up.

The government will retain its $4.7 billion investment, and will initially hold a 51 percent stake in the NBN Company, to be sold-down within five years after project competition, and funded through the Building Australia Fund and Aussie Infrastructure Bonds.

Prime Minister Kevin Rudd today told ABC Radio the Tasmanian fibre network will provide a better indication on NBN adoption, which will in turn determine access pricing.

The Tasmanian build is slated to commence in July, spearheaded by utilities Aurora Energy and Basslink.

Communications minister Stephen Conroy dismissed the $200 access prices as “wild claims” and said they will be structured proportionally to comparable services.

“NBN prices cannot be structured without having careful regard to the prices people pay today for comparable services,” Conroy said.

“The discipline of genuine competitive pressure in the market drives lower prices, innovation and greater choice of different services and price points.”

Conroy said the NBN will receive funds through new “revenue-generating services” provided by the high-speed network.

Shadow communications minister Nick Minchin accused the government of not subjecting the NBN to the same level of cost analysis as other smaller infrastucture projects.

Telstra has another opportunity to participate in the construction of the NBN after it was excluded from the initial tender will rounds.

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