Coonan bends on rural ISP subsidies

Coonan bends on rural ISP subsidies

Summary: update Communications Minister Senator Helen Coonan will allow regional Internet service providers left in the lurch by the sudden closure of a federal subsidy to claim funds under a replacement program.Several weeks ago, Coonan announced the AU$162.

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update Communications Minister Senator Helen Coonan will allow regional Internet service providers left in the lurch by the sudden closure of a federal subsidy to claim funds under a replacement program.

Several weeks ago, Coonan announced the AU$162.5 million Broadband Guarantee funding program. The initiative replaces the government's Broadband Connect Incentive Program, which was scheduled to run until 30 June, 2007, and is aimed at making sure all Australians will have access to broadband.

However, a number of ISPs had been using individual subscriber funding from Broadband Connect to fund infrastructure rollouts, and were left drifting when Coonan's department wrote them in the past couple of weeks, letting them know the Broadband Connect funds had run out.

Helen Coonan

"Registered broadband providers in regional areas who have recently installed new infrastructure as part of the Broadband Connect subsidy program, and who may not have had a reasonable opportunity to recoup a portion of the costs, will be entitled to claim subsidies for connecting new customers under the Australian Broadband Guarantee," Coonan said in a statement issued this afternoon.

The minister has also implemented three-month transitional arrangements for ISPs transferring to the Broadband Guarantee program (from 2 April), with further details available online from the Web site of the Department of Communications, Information Technology and the Arts from this Friday 23 March.

No new connections
Internode claimed Coonan's move did not address the full problem created by the transition to the new funding arrangements.

"Internode is not able to resume connecting new customers because the lower Australian Broadband Guarantee subsidies are inadequate," the ISP's strategic development manager John Lindsay said in a statement e-mailed to ZDNet Australia.

"The Broadband Connect subsidies were offered to encourage companies like Internode to build broadband infrastructure in areas where it's not commercially viable," he added. "Internode's business case to build this infrastructure was predicated on the subsidies offered under Broadband Connect/the Higher Bandwidth Incentive Scheme."

Lindsay concluded that these sorts of broadband networks were sustainble once customers were connected, but the Australian Broadband Guarantee model "did not justify the cost of connecting new customers".

Internode will continue to seek a resolution of the problems with DCITA and Coonan's office.

Topics: Broadband, Government AU, NBN

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  • Bureacratic chair warmers behavior !!

    If Coonan & her pen pushers were on top of this issue, it would not have happened.

    Typical behavior of a tired reactive government.

    How can any company which is trying to provide Broadband to rural & country subscribers, ever hope to recover their investment, when government departments cut of subsidies without warning & then try to patch up the mess they created ?
    anonymous