No NBN winner: Govt goes FTTH alone

No NBN winner: Govt goes FTTH alone

Summary: The Federal Government has terminated the National Broadband Network tender process with no winner, instead flagging plans to invest billions in building its own fibre-to-the-home network to 90 per cent of Australians over the next eight years.

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The Federal Government has terminated the National Broadband Network tender process with no winner, instead flagging plans to invest billions in building its own fibre-to-the-home network to 90 per cent of Australians over the next eight years.

Citing "deterioration of the economy" and flanked by Communications Minister Stephen Conroy and Treasurer Wayne Swan, Prime Minister Kevin Rudd said at a Canberra press conference this morning that the government had not found any of the NBN bids by players like Acacia, Optus, Axia Netmedia satisfactory.

Instead of accepting an NBN bid, Rudd said, the Federal Government would establish a company in partnership with the private sector to roll out its own network, based on fibre-to-the-home (FTTH) technology, that would reach 90 per cent of Australians with speeds of up to 100Mbps.

"This is the single largest nation-building infrastructure project in Australia's history," Rudd said, comparing the project to the Snowy Mountains Hydro scheme and the building of the Sydney Harbour Bridge.

The remaining 10 per cent of Australians would be served by a combination of ADSL broadband, wireless and satellite.

Conroy said the government had found merit in the Tasmanian Government's submission to the NBN process and would begin negotiating with the state's government in the next 24 hours as to how its portion of the NBN could begin construction.

"The Tasmanian roll-out can be commenced by the middle of the year, June, July," he said.

The NBN company, will be majority owned by the Federal Government, Rudd said, with private investment to be taken of up to 49 per cent of the company. The government's share will, subject to market conditions, be sold off by the Federal Government five years after the network is complete, Rudd said.

Rudd said that the company would invest up to $43 billion into the network, not all of which the government would provide. The government is putting in an initial investment of $4.7 billion.

The NBN company will only provide wholesale services, Rudd said, with open access being provided to retail providers.

Rudd said the network would create 7000 jobs and $37 billion in economic activity for the life of the project.

As part of the new NBN process, Conroy has released a discussion paper on telecommunications regulatory reform. It is available from the website of his Department of Communications, Broadband and the Digital Economy.

The Prime Minister added the creation of the company would solve "once and for all" the perceived conflict of interest in Telstra owning Australia's main telecommunications infrastructure and also providing retail services.

"Our critics might say: 'Just let broadband be sorted out by the markets'," Rudd said. "It hasn't occurred over the last decade ... it's time we bit the bullet on this."

Topics: NBN, Broadband, Government AU

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108 comments
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  • pie in the sky

    and the dream continues
    anonymous
  • NBN + Net Filtering? No thanks.

    So the same people that want to censor our internet have appointed themselves to become the sole wholesale provider of our internet?
    anonymous
  • They could call it "Telecom"

    Did the world slip back into the 1970s while I wasnt looking?
    anonymous
  • Telstra all over again

    "The government's share will, subject to market conditions, be sold off by the Federal Government five years after the network is complete"

    And I shall name thee Telecom wait Telstra.......wait Telstra Version 2
    anonymous
  • waste more money

    Rudd is very good at it, the so called economic conservative.
    anonymous
  • All your base...?

    GovCo says: "All your internets belong to us"

    Spot on there Tom. And so, mandated filtering will be easily accomodated by installing 'infrastructure' in 'THE' wholesaler for the entire country.

    I can see it now.
    * Fibre to the home!! Woohoo! 100Mbps,
    * Speed to the node, 10Mbps,
    * backhaul to the "wholesaler" ~ fraction of 1Mbps per user
    * Effective speed to user 2.4Kbps

    When I was but a youngster I built my first 1200/75 modem from a kit. At least I KNEW I was was an amateur trying to provide (myself) bandwidth.

    How it is GovCo thinks they can maintain 49% of the "company" yet inest not even 10% of the capital ($4.7B of projected $43B) ??
    anonymous
  • What about AusTel ?

    AusTel..AusTel..AusTel... oi, oi, oi !
    anonymous
  • Hah! Cost to Taxpayers!!

    Telstra's proposal woulsd have been up & running by now and done & dusted for less than half this cost to taxpyers.

    Sol's investments in mobile broadband are looking good now!!

    And now the KRUDD is going back into Telco land!! What a joke when the taxpayers have been down this path!!
    anonymous
  • No NBN Winner

    In many ways this is great news. It has always concerned me as a rural dweller that the government sold off our telecommunications infrastructure as well as the operations. Such services should be owned by all Australians and all Australians should have access to them.

    Providing the government can operate the installation on private sector attitudes with regard to outcomes, the entire country can benefit and this will be a great boost to decentralization.
    anonymous
  • Waste of time

    8 to 10 years before we can even use it by that stage wirless broad band will be faster Telstra already has plans to increase to 100Mbs next year. With the merge of VHA im sure they will also follow suite
    anonymous
  • OMG

    Talk about "Percieved" CONFLICT OF INTEREST!!!
    anonymous
  • Out come all the Telstra Campainers

    Congradulations, totally expected replys to what could be a great thing for all Australia.

    I can say one thing. Read it as you wish.

    Opportunityisnowhere !

    Sparks
    anonymous
  • For christ's sake

    This is a positive move guys .... had they come out and appointed one of teh bidders to build a FTTN network everyone would be on here crapping on about how we were wasting money building a network that will be out of date by the time it is finished.

    I have reservations about their ability to fund the scheme and get it done on time and on budget obviously, but big kudos for having the balls to try and go down the right path.
    anonymous
  • Well done!!

    A great decision Kev!! Fibre-to-the-home will ensure Australia's economic prosperity. Now if you can just claw back that $52billion spent on nothing!
    anonymous
  • 8-10 years?

    Just a small problem of the technology being outdated and surpassed before we even get to use it?
    anonymous
  • ...maybe

    Can't blame them. I live in Victoria and I only have to take one look at the Myki card scheme to see how potentially bad it can be.


    It's the right path however, as long as the Libs don't come along to privatize it again like they did with Telstra.
    anonymous
  • Over Regulated

    "Our critics might say: 'Just let broadband be sorted out by the markets'," Rudd said. "It hasn't occurred over the last decade ... it's time we bit the bullet on this."

    This is because the industry is over regulated and no private company in their right mind was going to build anything (incl Telstra) whilst there was any doubt of the Regulatory aspects. Because no assurances were given no company proceeded.

    If they had of invested and built a wonderful network and then the Regulatory body could have turned around and said you need to give open access to all Access Seekers at below cost pricing, just like they have done with ULL.
    anonymous
  • Avoiding the political minefield

    I suspect that the major reason for this sudden swerve sideways has little to do with choosing the right technology to provide the right level of service and everything to do with the path of least (political) resistance.

    Not awarding the contract to a third party avoids lawyerfest with Telstra. Running fibre to the home avoids using Telstra copper and making it a half-private venture makes it easier on the cheque book now and trivial to sell later.

    So, the sudden change in direction was inevitable - the alternative was to put on the blinkers and walk right into the minefield.
    anonymous
  • PPP?

    Why try yet another PPP for gods sake! How many times do PPPs need to fail before the govt takes notice? Keep it all govt owned and govt controlled - keep it at arms length from political interference and it will work.
    Selling it to private enterprise will ensure that it fails, just look at the financial crisis to guage the effectiveness of the free market.
    anonymous
  • Labour stated the ball rolling

    It was Labour that started the ball rolling to privatise Telstra with the ballot for Telstra customers to Optus. If Liberal did not get into power Labour would have done the selling to pay of the Govt credit card.

    Kind of sounds like the present. Labour racks up the credit card debt and ....
    anonymous