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Australia takes national broadband project public

Australians have plumped for public ownership of the flagship national broadband scheme, after the government found none of the private-sector bids was satisfactory
Written by Rupert Goodwins, Contributor and  Renai LeMay, Contributor

The Australian government has abandoned plans for the private sector to build the country's National Broadband Network, saying instead that it will run the project itself until well after completion.

The NBN is designed to provide 100Mbps broadband access to 90 percent of the Australian population, and will roll out over eight years.

The building of the NBN was a campaign promise made by then-opposition Labor Party leader Kevin Rudd in the November 1997 Australian federal election, and the bidding process took place after his election win. However, in a press conference yesterday, prime minister Rudd said the government had not found any of the NBN bids 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.

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

The remaining 10 percent of Australians would be served by a combination of ADSL broadband, wireless and satellite. The NBN company will be majority owned by the federal government, Rudd said, with up to 49 percent of the company going to private investment. The government's share will, subject to market conditions, be sold off by the federal government five years after the network is complete, he added.

The company will invest up to AU$43bn (£20bn) into the network, not all of which will be provided by the government. The government is putting in an initial investment of AU$4.7bn.

The NBN company will provide only wholesale services, Rudd said, with open access being provided to retail providers. The network would create 7,000 jobs and AU$37bn in economic activity for the life of the project.

In the UK, the government has yet to decide on a national broadband strategy, with its Digital Britain report due for final publication in May.

An Ofcom spokesperson told ZDNet UK: "For UK next-generation access, private and public investment may be required. We've seen investment by BT and Virgin Media, and smaller companies rolling out infrastructure, and also a number of community-based projects. We are expecting the government to say how far private investment can go when they publish the final Digital Britain report. The private sector will only invest when it thinks it can get a return. The government report may say whether there is a case for public investment when tackling [areas without] fibre."

The spokesperson added: "Australia is a very different kettle of fish [from the UK] in terms of land mass and population, but our international and strategy teams are looking at what's going on there quite closely."

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