Budget 2011: NBN cleans up on funding

Budget 2011: NBN cleans up on funding

Summary: The Federal Government will invest a further $35.6 million in funding for programs around the roll-out of the National Broadband Network (NBN) as part of this year's Federal Budget, and has said that it believes it will spend $3.09 billion on the project in the next financial year off-budget.

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The Federal Government will invest a further $35.6 million in funding for programs around the roll-out of the National Broadband Network (NBN) as part of this year's Federal Budget, and has said that it believes it will spend $3.09 billion on the project in the next financial year off-budget.

Over five years, $34.4 million will go directly to the Department of Broadband, Communications and the Digital Economy (DBCDE). Part of that funding will go to support the finalisation of the $11 billion deal between Telstra and the government that will see Telstra lease its ducts and pipes to NBN Co, decommission its copper network and move customers onto the NBN.

The funding will also go to DBCDE to establish the new Universal Service Obligation company (USO Co), as well as the establishment of an information service for consumers and small businesses to inform them about the roll-out of the NBN and to support their migration to the new fibre network.

This portion of the funding will also cover the interim satellite service operations as part of the USO obligations, and will go to fund specialists who will determine whether a particular premise is adequately served by non-NBN fibre providers before NBN Co rolls out the network to that premise.

Meanwhile, $1.2 million over the next five years will go to the Department of Finance and Deregulation to oversee the new USO Co entity.

The Australian Communications and Media Authority (ACMA) will receive an additional $7.2 million over the next four years so that the authority can develop and implement network standards and codes for the NBN.

The Australian Competition and Consumer Commission (ACCC) will receive $5.6 million to ensure that there is adequate competition on the NBN, and to monitor the backhaul provided to the NBN Co points of interconnect by other wholesalers to ensure that prices remain the same across Australia.

The parliament will also require an additional $2.1 million in funding over the next four years to support the new Joint Committee on the National Broadband Network established after the 2010 Federal Election and chaired by Independent MP Rob Oakeshott. The committee's first meeting will be on Monday.

The Attorney-General's Department has also allocated $4 million over four years for legal aid commissions and community legal services organisations to utilise the NBN to provide legal assistance to people in regional and rural areas of Australia. The aim of the initiative is to reduce the amount of litigation by providing people with better access to legal services in order to resolve legal problems before they reach the courts.

The Department of Education, Employment and Workplace Relations has, however, canned the Vocational Education Broadband Network. The program was designed to provide vocational education and training institutions with high speed broadband services; however, the government has said that the NBN will provide this function instead. The government expects to save $78.4 million over three years by cancelling this project.

Funding for the construction and roll-out of the NBN itself is not included in the budget; however, the government expects to inject $3.09 billion into the project in the next financial year, and a total of $20.6 billion over the next four years. The government's total investment in the project has been put at $27.5 billion.

Spectrum auction funding

In preparation for the auction of the 700MHz and the 2.5GHz spectrum bands as a result of the digital dividend, the government will spend $8.3 million over the next three years in order to plan, value the spectrum, develop licensing framework and prepare for the auction itself.

See ZDNet Australia's complete coverage of the budget.

Topics: Government, Broadband, Government AU, NBN

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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10 comments
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  • This is excellent news. Hopefully now we will start to see some action and movement in this area instead of the retoric from both sides.
    Smithe-13f2c
    • As they say in parliament 'Hear Hear!'
      aforce
    • Yes this is good news however dont expect the rhetoric to end from the liberal party, in fact I'm guessing they will become even more angry now as any positive news regarding the NBN has that effect on them. Also they are notorious for running around like chickens with their heads cut off at the best of times. I dont expect this to change and will look forward to another ill-informed entry on Turnbulls blog sometime in the next week.
      Hubert Cumberdale
      • Indeed HC...

        All you have to do is refer below...LOL!
        Rizz-cd230
      • I'm never wrong:

        http://delimiter.com.au/2011/05/12/budget-2011-turnbull-warns-of-nbn-charade/

        lol
        Hubert Cumberdale
  • If the $11 billion dollar deal does go ahead with the Juggernaut, expected the TLS share price to go to around the $3.50 mark (which NBN Co at the mercy of Telstra and the politics of it all, will have to bend to their demands).

    The gain of this all will not be to the 'broadband enthusiast' who thinks they'll be getting services for cheaper or free (as you would then be truly against the NBN), but to the soon to be unstoppable Big T.

    If the change of guard comes in 2-3 years (which looks very likely at this stage), the debt to keep the NBN Co will not be viable, and with the Libs being the better economic managers of the 2 devils, look at offloading the 'money pit'.

    With Telstra being the only telco capable of reabsorbing NBN Co as a 'functional part' of their business (on their terms and conditions, return and buy price at a small fraction of what was paid), their content, cloud services and VAS will fit in nicely with the cash injection from the government.

    TLS should reach around $5.50+ mark, with the investors of it all picking up a 100% (double) return in around 5 years. Less CGT, or hold onto an investment, should be a great buy.

    The funny think is, the irony of it all, the set up of the NBN to stop the Juggernaut, only to feed the beast at the end of the day...
    Theguy-bbb4a
    • Agreed! (Don't know much about your share price costing, but for the sake of argument - accepted)

      NBN Co's only real hope is to get a lot more network down, and very very soon, and this doesn't look like it is actually happening on the ground. This whole project could go down the drain, and Telstra could end up picking up the pieces that they want, at bargain basement prices.

      Telstra knows very well that every little delay that NBN Co encounters is in the long run to their advantage.

      This is not an outcome that I would like to see, just an outcome that I see as likely.
      cantech-b58c4
  • The Government is pumping money into ancillary services to make sure they use the NBN and into even more Government bureaucracy to oversee the NBN.

    I hope they actually get the failed build tender sorted so it can actually START anytime soon, in the meantime the likes of Telstra, iiNet and TPG are increasing their ADSL2+ footprint, they know where the NBN is going, most of the money is being spent on the bureaucracy around the build, public servants must love the NBN.
    advocate-d95d7
  • OMG so we are funding ACMA to develop standards for a network that is already being built, excellent! Funding for the ACCC to ensure competition when NBN will be the sole player, great!and the Attorney Generals office to help people sue someone.
    LOL ha ha ha LOL Ho ho, what say you Fizzel?
    Blank Look
  • If that's the best you have doubt oops Visionary (please add RS/Rizz idiocy...now)... time to give the FUD up and stick to hoping those Telstra shares of your's keep going up...

    And that's Mr. Fizzel to you...!
    Rizz-cd230