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Libs hit out at Labor 'broadband ram raid'

The Liberals have stepped up their campaign against Labor's proposed use of the Communications Fund to finance its fibre-to-the-node network, accusing the government of a "smash and grab raid" on the future of Australia's infrastructure.
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Written by Marcus Browne on

The Liberals have stepped up their campaign against Labor's proposed use of the Communications Fund to finance its fibre-to-the-node network, accusing the government of a "smash and grab raid" on the future of Australia's infrastructure.

Speaking in parliament on Wednesday, opposition communications spokesperson MP Bruce Billson accused the Federal Labor government of attempting to raid the AU$2 billion Communications Fund, established by the previous government to "futureproof" regional and rural telecommunications infrastructure.

Last year, the Howard government passed legislation to prevent the bulk of the fund being accessed, with government agencies only able to spend the interest to update regional telecoms.

Shadow Communications Minister, Bruce Billson

Credit: Australian Parliament

"This bill is an attempt at legalising a state-sanctioned smash and grab raid on resources set aside and quarantined for rural, regional and remote Australia to ensure they have future-proofing security of their telecommunications services," Billson told parliament.

He said the fund was intended for infrastructure upgrades such as broadband or backhaul fibre capabilities, or to subsidise access "where price was prohibitive for people living outside the metropolitan area ... so that the digital divide did not see people living outside our metropolitan cities left behind".

However, some industry watchers have questioned the Opposition's motives for attacking Labor.

"If you really take a look at the purpose of the [Communications Fund] -- for funding future communications infrastructure in an area of market failure -- then Labor's planned use of the fund for the national network is appropriate," said Paul Budde, CEO of telecommunications analyst group Buddecomm.

"You could only conclude that what Billson's trying to do here is score political points," he said, adding that the Liberal MP's stance is at odds with the majority of voters and business leaders.

He described the national network as one of Labor's "key promises" for the election, and potentially one of the deciding factors in its outcome.

"People voted on it, and if you ask the investment world you'll get exactly the same answer. Both from a political and financial management point of view this seems to be the right thing to do," he said.

Budde's comments come after David Cannon, senior analyst at research firm IDC, told ZDNet.com.au yesterday that the Federal Opposition was executing a rearguard action in trying to stymie Labor's use of the Communications Fund, in an attempt to defend its sell-off of Telstra.

"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," he said.

Billson's statement today that "the key guiding philosophy behind the establishment of the Communications Fund was to help ensure all Australians have access to affordable and reliable telecommunications services" has also drawn fire.

Telco analyst Budde said it was the previous government and Telstra's fault that the fund had to be established in the first place, as the privatisation of the national carrier had left many areas ill-equipped to withstand market forces and were subject to the possibility of inadequate services.

"There was a very clear opinion at the time that this was not something good for the country, and I think the public thinks differently about these issues than the previous government did," he said.

"Australia is not the only place in the world where this is happening either, over the last couple of years we've seen the trend of governments stepping back into telecommunications to build new networks where private enterprise was unable to. It's all about addressing this infrastructure problem," said Budde.

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