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Labor kicks off FTTN funding feud in parliament

In preparation for its fibre-to-the-node (FTTN) rollout, the federal Labor government is resuming its campaign to change legislation to allow it to access the AU$2 billion regional and rural Communications Fund, which the government claims is needed to bankroll part of the network's construction.
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Written by Marcus Browne on

In preparation for its fibre-to-the-node (FTTN) rollout, the federal Labor government is resuming its campaign to change legislation to allow it to access the AU$2 billion regional and rural Communications Fund, which the government claims is needed to bankroll part of the network's construction.

Resumption of the debate on amendments to the Telecommunications Act which could permit the government to use money from the Communications Fund is scheduled for parliament today.

The Opposition has repeatedly accused Labor of compromising the future of broadband and other communications services in regional Australia. "Labor wants to use the fund, plus its interest, to pay for its vague fibre-to-the-node network, which will predominantly service people in and around our capital cities," Liberal broadband spokesperson, Victorian MP Bruce Billson, said in a statement.

The Communications Fund was "future proofed" by the previous government to prevent political parties spending anything other than the interest on the fund -- estimated at around AU$400 million every three years.

"The Opposition is naturally going to oppose any other source of funds other than those from private enterprise," said David Cannon, senior analyst at research firm IDC.

"The last government sold Telstra to Australia's mums and dads knowing full well that a significant investment was going to have to be made to the entire country's telecommunications infrastructure to bring it up to scratch."

Debate over the government's proposed use of the Communications Fund takes place in the shadow of work being conducted by the Regional Telecommunications Independent Review Committee (RTIRC), which is hosting a series of public meetings and undertaking a number of other initiatives to assess the adequacy of communications services across regional and rural Australia.

Dr Bill Glasson, RTIRC chair, told ZDNet.com.au today that the federal government has "reassured us that appropriate funding will be put aside for regional and rural development", reiterating the sentiment expressed by a number of rural ISPs last week that despite Bruce Billson's claims, Labor will not leave the bush without broadband.

"It really depends on how the government uses the money from the Communications Fund. In order for it to be a worthwhile exercise there would need to be a clear benefit for regional and rural Australia," said Shara Evans, CEO of telecommunications research group Market Clarity.

Today's report comes after the Labor government revealed its expert tender assessment panel for the national FTTN network, with Communications Minister Senator Stephen Conroy announcing yesterday that it intended on having "construction of the network underway by the end of 2008" -- pushing back the original June deadline several months.

"If the Liberal party turned around and agreed today that the Communications Fund was a good source of finance for the network they'd put themselves in a situation where they would be admitting to selling off Telstra at a time it needed to be revamped, so they're going to play the opposition card regardless," said IDC's Cannon.

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