New NBN a 'policy failure': Minchin

Shadow Communications Minister Nick Minchin has slammed the government's decision this morning to form a company in partnership with the private sector to roll out its own fibre-to-the-home broadband network, while Terria chairman Michael Egan has praised it.

This represents a monumental policy failure

Spokesperson for Nick Minchin

"This represents a monumental policy failure in relation to the broadband tender," a spokesperson said. "18 months and $20 million later the whole process has imploded today."

The announcement was made as a face saving exercise, the spokesperson said, adding that the government's plan carried enormous risks for the Australian taxpayers.

It was purely another scoping exercise, the spokesperson said. Even if it all went well, it would be eight years until services were turned on.

The spokesperson also questioned where the money was going to come from. The government committed to an initial $4.7 billion investment, but all up $43 billion of public and private money could be injected into the network.

The government had talked about government guaranteed bonds, the spokesperson for Minchin said. "Will tax payers have to foot the guarantee of those bonds if it should turn pear shaped?"

Terria chairman Michael Egan, on the other hand, said that it was a "fantastic decision".

The government has come up trumps.

Michael Egan

Terria had been heading up the main rival bid before Optus decided to go it alone. It had five members: Optus, Macquarie Telecom, iiNet, Internode and Primus.

According to Egan, it would present Australia with broadband infrastructure which was second to none, but would also foster genuine competition.

It didn't matter who built the network, Egan said, the model mattered. The consortium will sell wholesale services only and will be open access. Egan believed the government had it right.

"The government has come up trumps," he told ZDNet.com.au.