APRIL 7, 2009 By Stephen Hardy -- Apparently dissatisfied with the results of a request for proposals for the country's planned National Broadband Network (NBN), Australian Prime Minister Kevin Rudd has announced the Australian Government will take the matter into its own hands. Prime Minister Rudd surprised observers today when he announced his Government would set up a company to build and operate the NBN, a project expected to cost AUS$43 billion (approximately US$30 billion) over eight years. FTTP (search Lightwave for FTTP) is expected to play a major role in the project.
The Government will be the largest shareholder in the company, but "significant private sector investment in the company is anticipated," according to a press statement on the prime minister's website. The Building Australia Fund and the issuance of "Aussie Infrastructure Bonds" will provide the capital for the Government's initial investment, expected to be AUS$4.7 billion. The Government then plans to sell at least some of its interest within five years after the NBN's completion.
The NBN is expected to roll out in 2010 and will be founded on optical technology, supplemented by wireless and satellite links where necessary. Recommendations along these lines from an independent panel of experts established to assist the Government in the NBN process were seconded by the Australian Competition and Consumer Commission, which endorsed FTTP as a better choice than FTTN (search Lightwave for FTTN). The open-access network build will emphasize functional separation, in which ownership of the network and the services that ride over it are divorced. NBN goals include:
- connection of 90 percent of all Australian homes, schools, and workplaces with broadband services with speeds up to 100 Mbps
- connection of all other premises in Australia with wireless and satellite technologies to support broadband speeds of 12 Mbps
- directly support of up to 25,000 local jobs every year, on average, over the eight-year project span.
The decision to strike out on its own came after the panel of experts suggested that the NBN RFP process be terminated because "none of the national proposals offered value for money," according to the press statement. The RFP process proved controversial when incumbent carrier Telstra's submission was rejected for non-compliance to the RFP's requirements.
The plan drew immediate criticism from Rudd's opposition, according to the Associated Press. "The government has provided no evidence that there will be sufficient demand for this service at prices that enable the network to deliver a commercial return," the AP quoted opposition leader Malcolm Turnbull as saying. "Without a commercial return there is no prospect whatsoever of the private sector investing."