Aussie govt. goes public-private on fiber to home

The Australian government has terminated the National Broadband Network tender process with no winner, instead flagging plans to invest billions of dollars in building its own fiber-to-the-home network to 90 percent of Australians over the next eight years.

Citing "deterioration of the economy," Communications Minister Stephen Conroy and Treasurer Wayne Swan, along with Prime Minister Kevin Rudd, said at a Canberra press conference on Tuesday morning that the government had not found any of the NBN bids, by players such as Acacia, Optus, Axia Netmedia, 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 fiber-to-the-home technology, that would reach 90 percent of Australians with speeds of up to 100Mbps.

"This is the single largest nation-building infrastructure project in Australia's history," Rudd said, comparing the project to the Snowy Mountains Hydro scheme and 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.

Conroy said the government had found merit in the Tasmanian Government's submission to the NBN process and would begin negotiating with the state's government in the next 24 hours as to how its portion of the NBN could begin construction. "The Tasmanian rollout can be commenced by the middle of the year, June, July," he said.

The NBN company will be majority-owned by the Australian federal government, Rudd said, with private investment to be taken of up to 49 percent of the company. The government's share will, subject to market conditions, be sold off by the federal government five years after the network is complete, Rudd said.

Rudd said the company would invest up to $43 billion into the network, not all of which the government would provide. The government is putting in an initial investment of $4.7 billion.

The NBN company will provide only wholesale services, Rudd said, with open access being provided to retail providers.

Rudd said the network would create 7,000 jobs and $37 billion in economic activity for the life of the project.

As part of the new NBN process, Conroy has released a discussion paper on telecommunications regulatory reform. It is available from the Web site of his Department of Broadband, Communications, and the Digital Economy.

The Prime Minister added that the creation of the company would solve "once and for all" the perceived conflict of interest in Telstra owning Australia's main telecommunications infrastructure and also providing retail services.

"Our critics might say: 'Just let broadband be sorted out by the markets,'" Rudd said. "It hasn't occurred over the last decade...it's time we bit the bullet on this."

Renai LeMai of ZDNet Australia reported from Sydney.

[JCPayne]

Capitalism is dead..... Countries around the world are fete-up with what the financial companies and wall street have done to the world economy and countries around the world are now returning to closed tighly regulated systems. This doesn't surprise me in the least.

[skillingssucks]

Apparently you have no understanding of "capitalism" whatsoever.

[sanenazok]

@JCPayne: which is exactly why the Australian government is guaranteeing to sell back its shares once the project is done. It's not capitalism that's dead, it's the notion that a private company will build out infrastructure only to have to share it with competitors. While AT&T had wired up the US for telephones, they would have never done it if they knew that sharing would be forced down their throats.

[zinthaq]

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However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property," referring to ownership rights of the land itself.[clarification needed]
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[jtjt145]

A former Union Boss (Stephen Conroy) in charge to decide where the money goes in Australia's national broadband - get ready for an involuntarily humorous, disaster-ridden fun ride, closely followed by financial bankruptcy of the Australian nation.
He (Stephen Conroy) is already 'excelling' in an other area as a true non-performer, with incompetence to this point being his greatest achievement, as he is actively pursuing the title of 'Censorship Minister' of the year.
... Following unconfirmed reports Mr Conroy has received offers for a multi-million dollar contract to head the communications department for Mr Kim Yong Il from North Korea.
:-)
I am serious about the concern for looming disaster, as the Australian Labor Party has always been known for being very astute in spending other people's money.

Arthur

[kksing]

So their answer to removing Telstra's ownership of National telecom network is to create a company to build another?

Right... In ten years time, this new NBN company (Telstra Mk 2) would be the new monopoly throwing its weight around...

[Press any key]

The critics of the past big projects in Australia are regulated to the dust bin of history ... Is that your fate, mate? Or are you going to embrace the inevitable future!


***** National Broadband Network (NBN) - Fibre-To-The-Premises

In 2009, $43 billion

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***** Snowy Hydro Scheme

In 2007, $800,000,000.00 from 1949 is worth:

$41 billion

$41,324,354,657.69 using the relative share of GDP

Nominal GDP:
GDP expressed in current market prices, which is GDP not corrected for inflation. This may also be called

"money GDP", "current-price GDP" or "GDP at current prices". Nominal GDP over time incorporates both

real-output change and price change (inflation).

------

***** Coolgardie pipe line

In 2007, $5,000,000.00 (£2.5 million) from 1896 is worth:

$4.45 billion

$4,456,034,521.12 using the relative share of GDP

------

***** Sydney Harbour Bridge

In 2007, $8,400,000.00 (£4.2 million) from 1924 is worth:

$1.35 billion

$1,357,898,681.73 using the relative share of GDP
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