Network
The decision stunned observers, who said the plan was far more ambitious in scope and capacity than had previously been signaled, and could reshape Australias telecommunications landscape.
Announcing the plan, Prime Minister Kevin Rudd said it would deliver broadband speeds of 100 megabits per second to 90 percent of Australian homes, schools and businesses within eight years through fiber-optic cables connected directly to buildings. The other 10 percent of people would get a wireless upgrade.
The new speeds are 100 times faster than most Australians currently get – enough to watch multiple high-quality downloads of movies or television shows at once from the same connection.
A handful of countries – South Korea, Japan, France and Germany among then – currently have comparable speeds.
“This new super fast national broadband network … is the most ambitious, far-reaching and long-term nation-building infrastructure project ever undertaken by an Australian government,” Rudd told a news conference the national capital, Canberra.
A yet-to-be named company would build the network, funded by government money with private companies invited to invest and provide technical expertise and resources. Private sector ownership would be capped at 49 percent.
The network will cost up to AU$43 billion ($30 billion) to build over eight years with the rollout slated to begin next year. The government will start with a AU$4.7 billion ($3.4 billion) initial investment, with the rest to come from private companies and the issuing of government bonds.
The government would sell its stake in the company in the five years after the network is completed if conditions allow, Rudd said.
Critics said the plan could fail if the desired level of private investment was not reached, leaving the public to pay the whole cost through higher prices for Internet access.
“The government has provided no evidence that there will be sufficient demand for this service at prices that enable the network to deliver a commercial return,” Opposition leader Malcolm Turnbull said. “Without a commercial return there is no prospect whatsoever of the private sector investing.”
Replacing Australias ad-hoc, technologically antiquated broadband services has proved a difficult task for successive governments, in part because of Australias geography – cities clustered on the coast and separated by vast distances of the sparsely populated Outback.
Rudd promised a comprehensive network as part of his successful 2007 election campaign, and subsequently invited companies to bid for the project.
All companies were invited to invest in the new company, he said.
Rudd said the network it was essential to boosting long-term economic growth in Australia and would increase the countrys productivity and competitiveness long-term.
Access to the fiber optic network would be offered wholesale to all service providers, a move welcomed Tuesday by smaller companies who complain that Telstra, the countrys largest telecommunications company, has a near monopoly over the existing copper wire network.
Telstra Chairman Donald McGuachie said the company welcomed the new plan and looked forward to “constructive discussions” with the government soon.
Senior Optus executive Maha Krishnapillai said the plan was a “highly attractive” investment opportunity.