The Coalition has thrown a major spanner in the works of Labor's broadband strategy by locking down the AU$2 billion fund that Labour was going to use to finance its fibre-to-the-node network.
The Telecommunications Legislation Amendment (Protecting Services for Rural and Regional Australia into the Future) Bill is set to be passed by the Senate this week, and will prevent Labor from accessing the AU$2 billion Communications Fund.
Under the legislation, political parties will only be able to spend the interest on the fund -- estimated at around AU$400 million every three years. If the present government retains power, the sum will be used to implement responses to the government's telecoms review board.
Should the party be elected this year, it has committed to spending AU$4.7 billion on a fibre-to-the-node rollout, which it says will cover 98 percent of Australians.
Labor had initially hoped to fund the proposal using the Communications Fund and the Future Fund's 17 percent stake in Telstra.
According to shadow Communications Minister Stephen Conroy, the AU$4.7 billion network is Labor's most expensive election pledge.
Shadow Minister for Trade and Regional Development Simon Crean recently described the Howard government's decision to lock down the Communications Fund as "desperate" and "a cheap political stunt".
"The government's plan to use just the interest from the Fund will not secure fast, affordable broadband for regional Australia. The government's Bill will deny the full use of the Fund for the purpose it was intended. It will only hide their own incompetence in securing regional broadband," he said in a statement.